Donald Trump Is Flying to Mexico Because He’s Losing

Donald Trump Is Flying to Mexico Because He’s Losing

Real estate businesses always operate with debt, and one thing that happens when your business is saddled with debt is that you might find yourself “underwater.” In other words, your company’s debts to the banks are larger in value than the price of the real estate assets your company owns.


This can happen if a sharp downturn in land prices or a sharp rise in interest rates unexpectedly shocks the foundations of your business. It can also happen just because you’re a poor manager who made bad decisions. But it happens. And it’s happened to Donald Trump several times in his career.

And when you’re underwater, something interesting happens to your decision-making calculus.

Suddenly something that would ordinarily be a smart business decision — a small shift in strategy that modestly increases profits — doesn’t actually make any sense. After all, with your business underwater, the bank really owns everything. A small increase in profits only increases what the bank can recover.

Conversely, something that would ordinarily be a bad business decision — a risky play that will probably result in utter ruin but stands a tiny chance of gaining you a windfall — makes a lot of sense. After all, you’re playing with the bank’s money. You are already ruined, so it doesn’t matter if the business gets worse. But the windfall would get you back above water. Underwater businesses make weird decisions whose expected returns are negative, because the fact of being underwater shifts the calculus. They are dangerous.

Donald Trump’s campaign is underwater. And that’s why Trump is flying to Mexico.

Donald Trump is probably going to lose

It’s not inconceivable that Donald Trump will win the election, but it probably won’t happen.

He is down in the polls, and nobody who has been down this much at this point has come from behind to win. He has less money than Hillary Clinton, so he can’t count on a last-minute ad barrage to save him. He has a much worse field operation than Clinton, so he can’t count on that saving him either. The Democratic Party as a whole is all in on Clinton and will do everything it possibly can to help her win, while Republicans openly speculate about whether cutting him loose could help them win Senate races in New Hampshire, Pennsylvania, and Nevada. Clinton has better surrogates than Trump, a more professional campaign team, better voter data, everything.

As we’ve seen repeatedly over the course of this campaign, Trump can do better and he can do worse.

He does worse when he gets into high-profile fights with Gold Star parents. He does worse when he openly muses about turning NATO into a protection racket.

He does better when he sticks to a least-common-denominator Republican Party message and says that Hillary Clinton is a bad person who used a secret email server to blow up the US consulate in Benghazi.

But doing better isn’t good enough. Doing better could help Trump narrow the poll gap from 5.3 points to 2 points and make sure he carries Arizona, Georgia, and North Carolina. But to win the election, he has to do a lot better — get ahead of Clinton in the polls. Indeed, given the field disparity, even a 1-point lead might not be good enough.

Something crazy might happen in Mexico

Mexican President Enrique Peña Nieto is plagued by gaffes and scandals and has a 23 percent approval rating in his home country. Mexico bestows a single six-year term on its presidents, so he has nothing left to run for.

A hastily arranged trip to Mexico does not seem likely to help Donald Trump win the election. But like many whimsical jaunts to Mexico, it’s certainly an unpredictable situation.

Maybe Peña Nieto will decide that the time is right to loudly demand the return of land the US stole from Mexico during the Polk administration, and it will give Trump the opportunity to loudly and proudly assert US sovereignty over Texas. Maybe Trump and Peña Nieto will announce a plan to share costs on the construction of a gargantuan border wall as a job-creating stimulus that will boost prosperity on both sides of the border. Who knows?

The point is that if Trump keeps plugging along, doing his best to be a normal candidate, he is going to lose the election. Running a sharper, more professional campaign that narrows the polling gap with Clinton would certainly be good news for Kelly Ayotte and Marco Rubio and Pat Toomey. But that’s the equivalent of making smart business decisions to help the bank recover more of its bad loans. Trump doesn’t want to help GOP Senate candidates. He doesn’t even like the GOP’s Senate candidates.

If he does something weird, something crazy might happen as a result — and if something crazy happens, maybe he’ll win.

This is fun, but dangerous

As an internet content professional, I am really glad that Trump recognizes the applicability of real estate concepts to political campaigns. The more bizarre stunts he pulls, the more interesting stories there will be to write.

That said, it’s worth noting that even an opposition candidate can do real damage to the world with reckless statements. So far, over the course of the 2016 campaign, Trump has already suggested defaulting on the national debt and refusing to live up to America’s NATO commitments.

The world seems to have largely shrugged off this stuff so far. But the fact that leading members of the Republican Party — from Paul Ryan and Mitch McConnell on down — are nominally committed to the idea that electing the default-and-no-NATO guy is a better idea than electing “Crooked Hillary” invites the misunderstanding that they are open to these ideas.

Sophisticated American political journalists, of course, are supposed to understand that Ryan and McConnell have kinda sorta signaled that they are aware these ideas are batty. But it’s certainly possible that some general in Russia thinks the Republican Party as a whole would resist the idea of coming to Estonia’s aide in the event of a war. And doubts about the sustainability of America’s commitment to the Baltics, unfortunately, meaningfully raise the chances of a global nuclear war.

The more Trump campaigns like an underwater candidate, the bigger the risk that he’ll say and do more things that, if implemented, would undermine the stability of the global financial and political order. And while lukewarm support for Trump is probably the smart political strategy for non-Trump Republicans, the ambiguity it creates around their support for Trump’s ideas means even a losing candidate’s policy pronouncements can affect the world.

It’s the last day of August, and the election isn’t until early November. With Trump underwater, September and October should be fun. And if we’re lucky, it won’t be toofun.

About Alexis Sostre

Entrepreneur, contributor, writer, and editor of Sostre News. With a powerful new bi-lingual speaking generation by his side, Sostre News is becoming the preferred site for the latest in Politics, Entertainment, Sports, Culture, Tech, Breaking and World News.

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