Trump and the Mad Negotiator Approach

Trump’s numerous character flaws, such as his grandiosity, his lack of interest in the truth, his impulsiveness, his habitual lashing out at critics, have elicited boatloads of disapproving commentary. It’s disturbing to see someone so emotional and undisciplined in charge of anything, let alone the United States.

Rather than offer yet more armchair analysis, it might be productive to ask a different question: why hasn’t Trump been an abject failure? There are plenty of rich heirs who blow their inheritance or run the family business into the ground pretty quickly and have to knuckle down to a much more modest lifestyle.

Trump’s lack of discipline has arguably cost him. The noise regularly made about his business bankruptcies is wildly exaggerated. Most of Trump’s bankruptcies were of casinos, and most of those took place in the nasty 1991-1992 recession. He was one of only two major New York City developers not to have to give meaningful equity in some of their properties in that downturn. He even managed to keep Mar-a-Lago and persuaded his lenders to let him keep enough cash to preserve a pretty flashy lifestyle because he was able to persuade them that preserving his brand name was key to the performance of Trump-branded assets.

The idea that Trump couldn’t borrow after his early 1990s casino bankruptcies is also false. As Francine McKenna pointed out in 2017 in Donald Trump has had no trouble getting big loans at competitive rates:

The MarketWatch analysis shows a variety of lenders, all big banks or listed specialized finance companies like Ladder Capital, that have provided lots of money to Trump over the years in the forms of short-, medium- and long-term loans and at competitive rates, whether fixed or variable.

“The Treasury yield that matches the term of the loan is the closest starting benchmark for Trump-sized commercial real estate loans,” said Robert Thesman, a certified public accountant in Washington state who specializes in real estate tax issues. The 10-year Treasury swap rate is also used and tracks the bonds closely, according to one expert.

Trump’s outstanding loans were granted at rates between 2 points over and under the matching Treasury-yield benchmark at inception. That’s despite the well-documented record of bankruptcy filings that dot Trump’s history of casino investment.

The flip side is that it’s not hard to make the case that Trump’s self-indulgent style has cost him in monetary terms. His contemporary Steve Ross of The Related Companies who started out in real estate as a tax lawyer putting together Section 8 housing deals, didn’t have a big stake like Trump did to start his empire. Ross did have industrialist and philanthropist Max Fisher as his uncle and role model, but there is no evidence that Fisher staked Ross beyond paying for his education. Ross has an estimated net worth of $7.6 billion versus Trump’s $3.1 billion.

Despite Trump’s heat-seeking-missile affinity for the limelight, we only get snippets of how he has managed his business, like his litigiousness and breaking of labor laws. Yet he’s kept his team together and is pretty underleveraged for a real estate owner.

The area where we have a better view of how Trump operates is via his negotiating, where is astonishingly transgressive. He goes out of his way to be inconsistent, unpredictable, and will even trash prior commitments, which is usually toxic, since it telegraphs bad faith. How does this make any sense?

One way to think of it is that Trump is effectively screening for weak negotiating counterparties. Think of his approach as analogous to the Nigerian scam letters and the many variants you get in your inbox. They are so patently fake that one wonders why the fraudsters bother sending them.

But investigators figured that mystery out. From the Atlantic in 2012:

Everyone knows that Nigerian scam e-mails, with their exaggerated stories of moneys tied up in foreign accounts and collapsed national economies, sound totally absurd, but according to research from Microsoft, that’s on purpose….

As a savvy Internet user you probably think you’d never fall for the obvious trickery, but that’s the point. Savvy users are not the scammers’ target audience, [Cormac] Herley notes. Rather, the creators of these e-mails are targeting people who would believe the sort of tales these scams involve….:

Our analysis suggests that is an advantage to the attacker, not a disadvantage. Since his attack has a low density of victims the Nigerian scammer has an over-riding need to reduce false positives. By sending an email that repels all but the most gullible the scammer gets the most promising marks to self-select, and tilts the true to false positive ratio in his favor.

Who would want to get in a business relationship with a guy who makes clear early on that he might pull the rug out from under you? Most people would steer clear. So Trump’s style, even if he adopted it out of deep-seated emotional needs, has the effect of pre-selecting for weak, desperate counterparties. It can also pull in people who think they can out-smart Trump and shysters who identify with him, as well as those who are prepared to deal with the headaches (for instance, the the business relationship is circumscribed and a decent contract will limit the downside).

Mind you, it is more common than you think for businesses to seek out needy business “partners”. For instance, back in the day when General Electric was a significant player in venture capital, it would draw out its investment commitment process. The point was to ascertain if the entrepreneurs had any other prospects; they wouldn’t tolerate GE’s leisurely process if they did. By the time GE was sure it was the only game in town, it would cram down the principals on price and other terms. There are many variants of this playbook, such as how Walmart treats suppliers.

Trump has become so habituated to this mode of operating that he often launches into negotiations determined to establish that he had the dominant position when that is far from clear, witness the ongoing China trade row. Trump did in theory hold a powerful weapon in his ability to impose tariffs on China. But they are a blunt weapon, with significant blowback to the US. Even though China had a glass jaw in terms of damage to its economy (there were signs of stress, such as companies greatly stretching out when they paid their bills), Trump could not tolerate much of a stock market downdraft, nor could he play a long-term game.

Another aspect of Trump’s erraticness is making sudden shifts, or what we have called gaslighting. He’ll suddenly and radically change his rhetoric, even praise someone he demonized. That if nothing else again is a power play, to try to maintain his position as driving the pacing and content of the negotiations, which again is meant to position his counterparty as in a weaker position, of having to react to his moves, even if that amounts to identifying them as noise. It is a watered-down form of a cult strategy called love bombing (remember that Trump has been described as often being very charming in first meetings, only to cut down the person he met in a matter of days).

Voters have seen another face of Trump’s imperative to find or create weakness: that of his uncanny ability to hit opponents’ weak spots in ways that get them off balance, such as the way he was able to rope a dope Warren over her Cherokee ancestry claims.

The foregoing isn’t to suggest that Trump’s approach is optimal. Far from it. But it does “work” in the sense of achieving certain results that are important to Trump, of having him appear to be in charge of the action, getting his business counterparts on the back foot. That means Trump is implicitly seeing these encounters primarily in win-lose terms, rather than win-win. No wonder he has little appetite for international organizations. You have to give in order to get.

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  1. PlutoniumKun

    I think this is pretty astute, thanks Yves. One reason I think Trump has been so successful for his limited range of skills is precisely that ‘smart’ people underestimate him so much. He knows one thing well – how power works. Sometimes that’s enough. I’ve known quite a few intellectually limited people who have built very successful careers based on a very simple set of principles (e.g. ‘never disagree with anyone more senior than me’).

    Anecdotally, I’ve often had the conversation with people about ‘taking Trump seriously’, as in, trying to assess what he really wants and how he has been so successful. In my experience, the ‘smarter’ and more educated the person I’m talking to is, the less willing they are to have that conversation. The random guy in the bar will be happy to talk and have insights. The high paid professional will just mutter about stupid people and racism.

    I would also add one more reason for his success – he does appear to be quite good at selecting staff, and knowing who to delegate to.

    1. timotheus

      There is another figure from recent history who displayed similar astuteness about power while manifesting generally low intelligence: Chile’s Pinochet. He had near failing grades in school but knew how to consolidate power, dominate the other members of the junta, and weed out the slightest hint of dissidence within the army.

    2. KLG

      “The high paid professional will just mutter about stupid people and racism.”

      Indeed. I am part of the PMC but not of it, thank goodness. Every one of my colleagues (not so highly paid) has a terminal case of Trump Derangement Syndrome.

    3. Off The Street

      To the average viewer, Trump’s branding extends to the negative brands that he assigns to opponents. Witness Lyin’ Ted, Pocahontas and similar sticky names that make their way into coverage. He induces free coverage from Fake News as if they can’t resist gawking at a car wreck, even when one of the vehicles is their own. Manipulation has worked quite a lot on people with different world views, especially when they don’t conceive of any different approaches.

      1. drumlin woodchuckles

        Scott Adams touted that as one of Trump’s hidden persuasionological weapons . . . that ability to craft a fine head-shot nickname for every opponent.

        If Sanders were to be nominated, I suppose Trump would keep saying Crazy Bernie. Sanders will just have to respond in his own true-to-himself way. Maybe he could risk saying something like . . .
        ” so Trashy Trump is Trashy. This isn’t new.” If certain key bunches of voters still have fond memories for Crazy Eddie, perhaps Sanders could have some operatives subtly remind people of that.

        Some images of Crazy Eddie, for those who wish to stumble up Nostalgia Alley . . .;_ylt=A0geKYkLVB5emoUAN6RXNyoA;_ylu=X3oDMTEyNm03Y25mBGNvbG8DYmYxBHBvcwMyBHZ0aWQDQTA2MTVfMQRzZWMDc2M-?p=crazy+eddie&fr=sfp

    4. curious euro

      I would disagree with the “selecting staff” part. I can’t really think of any of his appointees to any office while he is president that was a good pick. One worse than the other basically.

      Maybe in his private dealings he did better, but in public office it’s a continuous horror show.
      Examples like Pence, Haley, “Mad Dog”, Bolton, DeVos, his son in law, Pompeo. The list goes on.

      Another indication how bad his delegation skills are is how short his picks stay at their job before they are fired again. Is there any POTUS which had higher staff turnover?

      1. NotTimothyGeithner

        Its a horror show because you don’t agree with their values. After the last few Presidents, too much movement to the right would catastrophic, so there isn’t much to do. His farm bill is a disaster. The new NAFTA is window dressing. He slashed taxes. He’s found a way to make our brutal immigration system even more nefarious. His staff seems to be working out despite it not having many members of the Bush crime family.

        Even if these people were as beloved by the press as John McCain, they would still be monsters.

        1. curious euro

          It’s not their values that make them a horror show, it’s their plain inaptitude and incompetency. E.g. someone like that Exxon CEO is at least somewhat capable, which is why I didn’t mention him. Though he was quite ineffective as long as he lasted and probably quite corrupt. Pompeo in the same office on the other hand is simply a moron elevated way beyond his station. Words fail and the Peter principle cannot explain.

          The US can paper over this due to their heavy handed application of power for now, but every day he stays in office, friends are abhorred while trying not to show it, and foes rejoice at the utter stupidity of the US how it helps their schemes.

          For me as a foreigner who detests the forever wars and most of the US foreign policy, this is a good thing: the more heavy handed, the more brutal, the more cruel, the more stupid the US policy is, the less is the chance for our euro governments to follow the US in today’s war or other policy. So while I am sort of happy about the outcome, I don’t see the current monsters at the helm worse than the monsters 4 years ago under Obama. In fact I detested them much more since they had the power to drag my governments into their evil schemes.

          Evil and clearly despicable is always better than evil and sort of charismatic.

          1. tegnost

            For me as a foreigner who detests the forever wars and most of the US foreign policy, this is a good thing: the more heavy handed, the more brutal, the more cruel, the more stupid the US policy is, the less is the chance for our euro governments to follow the US in today’s war or other policy.

            Indeed, if you look at the trendline from the ’80’s to now, trump is, in some ways, the less effective evil.

          2. James O'Keefe

            They are not inept and incompetent at what they are trying to achieve. The GOP has long sought to privatize government to help the rich get richer and harm anyone who isn’t rich by cutting services and making them harder to get. Trumps picks are carrying out that agenda very well.

            That he still hasn’t filled 170 appointed positions is icing on the cake. See stats at:

          3. rosemerry

            I feel exactly the same. Trump is just a huge crude extension of the usual “exceptional” leaders, much more transparent by not pretending he is any sort of representative of democratic and cooperative values claimed by his predecessors.

      2. PlutoniumKun

        But what I think is noticeable is that his worst high profile staff picks, while horrible people, are generally those who are under his thumb and so he has control of. But in the behind the scenes activities, they’ve been very effective – as an obvious example, witness how he’s put so many conservative Republicans into the judiciary, in contrast with Obamas haplessness.

        1. curious euro

          That is not a Trump thing, getting more judges is a 100% rep party thing and only rep party thing. Sure, he is the one putting his rubber stamp on it, but the picking and everything else is a party thing. They stopped the placement for years under Obama before Trump was ever thought about, and now are filling it as fast as they can. Aren’t they having complicit democrats helping them or how can they get their picks beyond congress? Or am I getting something wrong and Obama could have picked his judges but didn’t?

          The people he chooses to run his administration however are all horrible. Not just horrible people but horrible picks as in incompetent buffoons without a clue. Can you show a evil, horrible or not but actually competent pick of his in his administration?

          The only one I can think of is maybe the new FAA chief Dickson. Who is a crisis manager, after the FAA is in its worst crisis ever right now. So right now someone competent must have this post. All the others seem to be chickenhawk blowhards with the IQ of a fruitfly but the bluster of a texan.

            1. curious euro

              Is she effective? What has she done to make her a spy mastermind?
              She is obviously a torturer, but is that a qualification in any way useful to be a intelligence agency boss?

              I have the suspicion Haspel was elevated to their office by threatening “I know where all the bodies are buried (literally) and if you don’t make me boss, I will tell”. Blackmail can helping a career lots if successful.

          1. Thuto

            The outcomes of incompetence and malicious intent are sometimes indistinguishable from one another. With the people Trump has surrounded himself with, horrible, nasty outcomes are par for the course because these guys are both incompetent and chock full of malicious intent. Instead of draining the swamp, he’s gone and filled it with psychotic sociopaths.

            1. drumlin woodchuckles

              Some time ago I heard Mulvaney answer the criticism about the Trump budget of the day cutting so much money from EPA that EPA would have to fire half of its relevant scientists. He replied that ” this is how we drain the swamp”.

              Citing “corruption” was misdirection. Trump let his supporters believe that the corruption was The Swamp. What the Trump Group ACTually means by “The Swamp” is all the career scientists and researchers and etc. who take seriously the analysing and restraining of Upper Class Looter misbehavior.

      3. Yves Smith Post author

        I limited the post to his negotiating approach. One would think someone so erratic would have trouble attracting people. However, Wall Street and a lot of private businesses are full of high maintenance prima donnas at the top. Some of those operations live with a lot of churn in the senior ranks. For others, one way to get them to stay is what amounts to a combat pay premium, they get paid more than they would in other jobs to put up with a difficult boss. I have no idea how much turnover there is in the Trump Organization or how good his key lieutenants are so I can’t opine either way on that part.

        Regarding his time as POTUS, Trump has a lot of things working against him on top of his difficult personality and his inability to pay civil servants a hardship premium:

        1. He got elected over the dead bodies of just about everyone who counts in the Republican Party. He pretty much did a hostile takeover of the GOP. So his ability to draw on seasoned hands was nil. And on top of that, he is temperamentally not the type to seek the counsel of perceived wise men in and hanging around the party. The people he has kept around are cronies like Wilbur Ross and Steve Mnuchin.

        The one notably competent person he has attracted and retained is Robert Lightizer, the US Trade Representative

        2. Another thing that undermines Trump’s effectiveness in running a big bureaucracy is his hatred for its structure. He likes very lean organizations with few layers. He can’t impose that on his administration. It’s trying to put a round peg in a square hole.

        1. cocomaan

          I have no idea how much turnover there is in the Trump Organization or how good his key lieutenants are so I can’t opine either way on that part.

          Is it just me or does nobody know? Does it seem to anyone else like there has been virtually no investigation of his organization or how it was run?

          Maybe it’s buried in the endless screeds against Trump, but any investigations of his organizations always seem colored by his presidency. I’d love to see one that’s strictly historical.

          1. Yves Smith Post author

            I am simply saying that I have not bothered investigating that issue. There was a NY Times Magazine piece on the Trump Organization before his election. That was where I recall the bit about him hating having a lot of people around him, he regards them as leeches. That piece probably had some info on how long his top people had worked for him.

        2. ObjectiveFunction

          Congratulations Yves, on another fine piece, one of your best. I might recommend you append this comment to it as an update, or else pen a sequel.

          While Trump has more in common stylistically with a Borgia prince out of Machiavelli, or a Roman Emperor (oderint, dum metuant) than with a Hitler or a Stalin, your note still puts me in mind of an insightful comment I pulled off a history board a while ago, regarding the reductionist essence of Führerprinzip, mass movement or no mass movement. It’s mostly out of Shirer:

          Hitler ran the Third Reich by a system of parallel competition among bureaucratic empire builders of all stripes. Anyone who showed servile loyalty and mouthed his yahoo ideology got all the resources they liked, for any purpose they proposed. But the moment he encountered any form of independence or pushback, he changed horses at once. He left the old group in place, but gave all their resources to a burgeoning new bureaucracy that did things his way. If a State body resisted his will, he had a Party body do it instead. He was continually reaching down 2-3 levels in the org charts, to find some ambitious firecracker willing to suck up to him, and leapfrog to the top.

          This left behind a complete chaos of rival, duplicated functions, under mainly unfit leaders. And fortunately for the world, how well any of these organizations actually did their jobs was an entirely secondary consideration. Loyalty was all.

          Hitler sat at the center of all the resource grabbers and played referee. This made everyone dependent on his nod and ensured his continued power. The message was: there are no superiors in the Reich. There is only der Führer, and his favor trumps everything.

          As you note, some of these tools (fortunately) aren’t available to Cheeto 45….

          I hope this particular invocation of Godwin’s avenger is trenchant, and not OT. Although Godwin himself blessed the #Trump=Hitler comparison some time ago, thereby shark-jumping his own meme.

      4. Tomonthebeach

        It might be as simple as birds of a feather (blackbirds of course) flocking together. Trump seems to have radar for corrupt cronies as we have seen his swamp draining into the federal prison system. The few over-confident generals he picked, except for Flynn, finally caved when they realized staying was an affront to the honor code they swore to back in OCS or their academy.

      5. lyman alpha blob

        The crooks in the Reagan administration were getting bounced seemingly every other day. Just found this from Brookings (blecchh) which if accurate says Trump has recently surpassed Reagan –

        I don’t know how they selected staff in the Reagan years, but lately the POTUS seems to appoint based on who the plutocrats want. As has been noted Bary O took his marching orders from Citigroup if I remember right. I doubt if Trump had even heard of most of the people he appointed prior to becoming president. So at least some of Trump’s turnover is due to him firing recommendations from others who didn’t turn out how he’d like. That’s one reason I didn’t get all that upset over the Bolton hiring – I didn’t think he’d last a year before Trump canned him.

        My recollection of the Reagan years was that he had a lot of staff who left to “spend more time with their families”; in other words they got caught being crooked and we’re told to go lest they besmirch the sterling reputation of St. Ronnie.

      6. drumlin woodchuckles

        He early-on adopted the concept of “dismantle the Administrative State”. Some of his appointees are designed to do that from within. He appoints termites to the Department of Lumber Integrity because he wants to leave the lumber all destroyed after he leaves the White House.

        His farm bill is only a disaster to those who support Good Farm Bill Governance. His mission is to destroy as much of the knowledge and programs within the USDA as possible. So his farm bill is designed to achieve the destruction he wants to achieve. If it works, it was a good farm bill from his viewpoint. For example.

    5. Ignacio

      I would say that Trump, not acting in an intelligent way is doing very clever things according to his interests. My opinion is that his actions/negotiations with foreign countries are 100% directed for domestic consumptiom. He does not care at all about international relationships, just his populist “make America great again” and he almost certainly play closest attention to the impact of his actions in US opinion. He calculates the risks and takes measures that show he is a strong man defending US interests (in a very symplistic and populist way) no matter if someone or many are offended, abused or even killed as we have recently seen. Then if it is appreciated that a limit has been reached, and the limit is not set by international reactions but perceived domestic reactions, he may do a setback showing how sensibly magnanimous can a strongman like him be. In the domestic front, IMO, he does not give a damn on centrists of all kinds. Particularly, smart centrists are strictly following Trumps playbook focusing on actions that by no means debilitate his positioning as strongman in foreign issues and divert attention from the real things that would worry Trump. The impeachment is exactly that. Trump must be 100% confident that he would win any contest with any “smart” centrist. Of course he also loves all the noises he generates with, for instance, the Soleimani killing or Huawei banning that distract from his giveaways to the oligarchs and further debilitation of remaining welfare programs and environmental programs. This measures don’t pass totally unnoticed but Hate Inc. and public opinions/debates are not paying the attention his domestic measures deserve. Trump’s populism feeds on oligarch support and despair and his policies are designed to keep and increase both. Polls on Democrats distract from the most important polls on public opinion about Trum “surprise” actions.

      Trump will go for a third term.

      1. Ignacio

        Talking about centrists following strictly Trump’s playbook, another good example is Warren’s take on Soleimani’s killing. If she believes that she has any chance of defeating Trump as a strong defender of the US against terrorism, she must be drinking some new kind of kool-aid. Fortunately, in this sense, Sanders is being much more clever than Warren. I see Sanders as the only and last opportunity to avoid the worst.

  2. Seamus Padraig

    Trump has the rare gift of being able to drive his enemies insane–just witness what’s become of the Democrats, a once proud American political party.

    1. Eureka Springs

      Democrats have long been (what, 50 plus yrs. – Phil Ochs – Love Me I’m A Liberal) exuding false pride of not appearing to be or sounding insane. Their place, being the concern troll of the duopoly. All are mad. If the Obama years didn’t prove it, the Dems during Bush Cheney certainly did.

      1. curious euro

        Yes, 50 years. Nixon played mad to get his Vietnam politics through, Reagan was certifiable
        “My fellow Americans, I’m pleased to tell you today that I’ve signed legislation that will outlaw Russia forever.” “We begin bombing in five minutes.” live on air.

  3. vlade

    I suspect only half of the post was posted? The last para seems to get cut in mid sentence.

    I’d add one more thing (which may be in the second half, assuming there’s one). Trump’s massively insane demands are a good anchoring strategy. Even semi-rational player will not make out-of-this-earth demands – they would be seen as either undermining their rationality, or clearly meant to only anchor so less effective (but surprisingly, even when we know it’s only an anchor it apparently works, at least a bit). With irrational Trump, one just doesn’t know.

    1. vlade

      Or maybe not (re half posted), now that I re-read it.. More likely it’s just me being sleep deprived today :)

  4. David

    I think Trump understands that one of the basic tactics of negotiation (though forgotten by the Left(tm)) is to set out a maximalist position before the negotiation starts, so that you have room to make compromises later. Sometimes this works better than others – I don’t know how far you can do it with the Chinese, for example. But then Trump may have inadvertently played, in that case, into the tradition of scripted public utterances combined with behind-the-scenes real negotiation that tends to characterize bargaining in Asia. But in domestic politics, there’s no doubt that publicly announcing extreme negotiating positions is a winning tactic. You force the media and other political actors to comment and make counter-proposals, thus dragging the argument more in your direction from the very start. Trump remembers something that his opponents have willfully forgotten: compromise is something you finish with not something you start from. In itself, any given compromise has no particular virtue or value.

    1. Michael Fiorillo

      Yes, Trump does seem to be very good at getting to people to “negotiate against themselves.”

  5. The Rev Kev

    There is actually two parts to a negotiation I should mention. There is negotiating a deal. And then there is carrying it out. Not only Trump but the US has shown itself incapable of upholding deals but they will break them when they see an advantage or an opportunity. Worse, one part of the government may be fighting another part of the government and will sabotage that deal in sometimes spectacular fashion.
    So what is the point of having all these weird and wonderful negotiating strategies if any partners that you have on the international stage have learned that Trump’s word is merely a negotiating tactic? And this includes after a deal is signed when he applies some more pressure to change something in an agreement that he just signed off on? If you can’t keep a deal, then ultimately negotiating a deal is useless.

    1. curious euro

      The incapability of the US to keep their treaties has been a founding principle of the country. Ask any Indian.

      Putin or the russian foreign ministry called the US treaty incapable a few years before Trump, and they were not wrong. Trump didn’t help being erratic as he is, but he didn’t cancel any treaty on his own: JCPOA, INF, etc. He had pretty broad support for all of these. Only maybe NAFTA was his own idea.

    2. Yves Smith Post author

      I would put it a bit differently. Trump’s erraticness is a strong signal he fits to a pattern the Russians have used to depict the US: “not agreement capable”. That’s what I meant by he selects for weak partners. His negotiating style signals that he is a bad faith actor. Who would put up with that unless you had to, or you could somehow build that into your price?

      1. barnaby33

        Considering I doubt the Russians have ever honored a single deal they made, that’s maybe not a good example!

        1. Yves Smith Post author

          I have no idea who your mythical Russians are. I know two people who did business in Russia before things got stupid and they never had problems with getting paid. Did you also miss that “Russians” have bought so much real estate in London that they mainly don’t live in that you could drop a neutron bomb in the better parts of Chelsea and South Kensington and not kill anyone? Pray tell, how could they acquire high end property if they are such cheats?

        2. Boomka

          somebody was eating too much US propaganda? how about this for starters:

          “It is politically important: Russia has paid off the USSR’s debt to a country that no longer exists,” said Mr Yuri Yudenkov, a professor at the Russian University of Economics and Public Administration. “This is very important in terms of reputation: the ability to repay on time, the responsibility,” he told AFP.

          It would have been very easy for Russia to say it cannot be held responsible for USSR’s debts, especially in this case where debt is to a non-existent entity.

    3. drumlin woodchuckles

      In Syria, the Department of Defense was supporting one group of pet jihadis. The CIA was supporting a different group of pet jihadis.

      At times the two groups of pet jihadis were actively fighting eachother. I am not sure how the DoD and CIA felt about their respective pet jihadis fighting eachother. However they felt, they kept right on arming and supporting their respective groups of pet jihadis to keep fighting eachother.

  6. timbers

    I’m just not impressed by Trump in any way.

    He owes the fact he’s President not to any skill he has, but to Democrats being so bad. Many non establishment types could have beaten Hillary.

    And Trump owes the fact that he’s not DOA in 2020 re-election again because Democrats are so bad. There are a handful of extremely popular social programs Democrats could champion that would win over millions of voters and doom Trump’s re-election. But instead, they double down on issues that energize Trump’s base, are not off-limits to there donors while ignoring what the broad non corporate/rich majority support. For example impeaching him for being the first recent President not to start a major new war for profit and killing millions and then saying it’s really because something he did in Ukraine that 95% of Americans couldn’t care less about and won’t even bother to understand even if they could.

    That leaves the fact he is rather rich and must have done something to become that. I don’t know enough about him to evaluate that. But I would never what to know him or have a friend that acts like him. I’ve avoided people like that in my life.

    1. Yves Smith Post author

      Did you read the post as positive? Please read again. Saying that Trump’s strategy works only to the extent that he winds up selecting for weak partners is not praise. First, it is clinical, and second, it says his strategy has considerable costs.

      1. MyLessThanPrimeBeef

        I agree.

        Understanding how it works is the first step in dealing with (or countering) it.

        Someone above mentions Pinochet as being similar. I can’t, just now, think of anyone* from history working the way he does. Can anyone name some?

        *Except Shakespeare’s Hamlet, or some Kung Fu masters, like Jackie Chan in his 1978 “Drunken Master,” or earlier, the not as well-known 1966 film, Come Drink With Me, which was produced by the legendary Run Run Shaw (who lived to be 107, or maybe it was his brother), starring Cheng Pei Pei. The master becomes the master when, or only when, drunk. It reminds of the saying, ‘method to the madness.’

        And often what we perceive to be chaotic – in weather, nature, space or human affairs – is only so because we don’t truly comprehend it. This is not to say it can not be in fact chaotic.

      2. rd

        I find it interesting that the primary foreign entity who has played Trump like a violin is Kim in North Korea. He has gotten everything he wanted,except sanctions relief over the past couple of years.

        However, Trump’s style of negotiating with Iran has made it clear to Kim that North Korea would be idiots to give up their nuclear weapons and missiles. Meanwhile, Iran has watched Trump’s attitude towards Kim since Kim blew up his first bomb and Trump is forcing them to develop nuclear weapons to be able to negotiate with Trump and the West.

        1. ObjectiveFunction

          But other than the minor matter of US 8th Army (cadre) sitting in the line of fire, the bulk of any risks posed by Li’l Kim are borne by South Korea, Japan and China. So for Trump, it’s still down the list a ways, until the Norks can nuke tip a missile and hit Honolulu. So what coup has Kim achieved at Trump’s expense, again?

    2. drumlin woodchuckles

      Today’s Democrats want to destroy those social programs you cite. They have wanted to destroy those social programs ever since President Clinton wanted to conspire with “Prime Minister” Gingrich to privatize Social Security. Luckily Monica Lewinsky saved us from that fate.

      A nominee Sanders would run on keeping Social Security, Medicare, Medicaid in existence. And he would mean it. A nominee Biden might pretend to say it. But he would conspire with the Republicans to destroy them all.

      The ClintoBama Pelosicrats have no standing on which to pretend to support some very popular social programs and hope to be believed any longer. Maybe that is why they feel there is no point in even pretending any more.

  7. Carolinian

    Thanks for the shrewd analysis. The problem is that Trump appears to be morphing from the mad negotiator into someone who really is mad. I think he knows he screwed up with Soleimani and there’s no taking it back, only doubling down. You can’t talk your way out of some mistakes. Trump is shrewd, but not very smart and like most bullies he’s also weak. He gets by being such an obvious bluffer and blowhard but when you start assassinating people and expect to be praised for it it’s no longer a game.

    1. False Solace

      If I were Iran I’d think really hard about scheduling something embarrassing to happen just before the election. Jimmy Carter was seriously damaged by hostages, why not Trump?

    2. MyLessThanPrimeBeef

      If you note and believe he tends to start out at the furthest position, the question then becomes, is this his most forceful action.

      Is it the general plus collateral damage, and no more/no worse?

      Or maybe he doesn’t always start out at the far end. Then, people need to respond differently, if the aim is to play the man in this chess game.

      1. Carolinian

        I’d say the solution is to give Trump the heave ho this November and not play his game of me me me. Indeed the Iranians seem to be biding their time to see what happens.

        Trump was always only tolerable as long as he spent his time shooting off his mouth rather than playing the imperial chess master. This reality show has gone on long enough.

        1. MyLessThanPrimeBeef

          And to give Trump the heave-ho, we have to know how to play the man. (Then, Iran doesn’t have to.)

          But if we don’t fully know – if he is unpredictable in how he starts out at the beginning – it makes the venture harder (but not impossible).

        2. drumlin woodchuckles

          Bearing in mind the fact that the DemParty would prefer a Trump re-election over a Sanders election, I don’t think anyone will be giving Trump any heave ho. The only potential nominee to even have a chance to defeat Trump would be Sanders. And if Sanders doesn’t win on ballot number one, Sanders will not be permitted the nomination by an evil Trumpogenic DemParty elite.

          Even if Sanders wins the nomination, the evil Trumpogenic Demparty leadership and the millions of Jonestown Clintobamas in the field will conspire against Sanders every way they feel they can get away with. The Clintobamas would prefer Trump Term Two over Sanders Term One. They know it, and the rest of us need to admit it.

          If Sanders is nominated, he will begin the election campaign with a permanent deficit of 10-30 million Clintobama voters who will Never! Ever! vote for Sanders. Sanders will have to attract enough New Voters to drown out and wash away the 10-30 million Never Bernie clintobamas.

        3. OpenThePodBayDoorsHAL

          Not sure he “screwed up” with Suleimani. He now has something to point to when Adelson and the Israel Firsters ring up. He has red meat for his base (“look what a tough guy I am”). He can tell the Saudis they now owe him one. He added slightly to the fund of hatred for America in the hearts of Sunnis but that fund is already pretty full. If they respond with a terror attack Trump wins because people will rally around the national leader and partisan differences will be put aside. Notice how fast de-escalation happened, certainly feels alot like pre-orchestrated kayfabe.

    3. Yves Smith Post author

      Mind you, there’s no reason to think that this negotiation approach wasn’t an adaptation to Trump’s emotional volatility, as in finding a way to make what should have been a weakness a plus. And that he’s less able to make that adaptation work well as he’s over his head, has less control than as a private businessman, and generally under way more pressure.

  8. marym

    If someone doesn’t care who/what they harm or destroy; or if the harm or destruction is the actual goal, it gives them freedom and power not available to someone with even a crumb-dropping neoliberal sense (or façade) of obligation toward anyone else or to anything constructive.

    With Democrats being unwilling to scrutinize, it’s not clear how much Trump and family are winning as far as personal fortune. In his public capacity he has little to show for his winnings that isn’t some form of dismantling, destruction, or harm with no constructive replacement and no material benefits outside the donor class.

    1. xkeyscored

      Trying to see things from Trump’s perspective, while I don’t know how his personal fortune is faring, his lifestyle doesn’t seem to have suffered too much of a downturn. He still spends much of his time playing golf and hanging out at Mar-a-Lago. In addition, his name is known around the entire world, to a far greater extent than when he was a mere real estate crook or reality TV phenomenon. Which may be of greater importance to him than the precise extent of his wealth, let alone the fate of his country or the planet.

  9. Wondering

    Nice analysis, Yves. A welcome break from the typical centrist hand wringing “What norms has he broken this week?”
    Next question: Given that our system allows for bloviating bullies to succeed, is that the kind of system we want to live under?

  10. HH

    I recall reading that Trump’s empire would have collapsed during the casino fiasco were it not for lending from his father when credit was not available elsewhere. NYT investigative reporters have turned up evidence of massive financial support from Trump father to son to the tune of hundreds of millions throughout the son’s career. So much for the great businessman argument.

  11. carbpow

    Trump is nothing more or less than a reflection of the mind set of the US people.The left wing resorts to the same tactics that Trump uses to gain their ends. Rational thought and reasonable discussion seems to be absent. Everyone is looking for a cause for the country’s failing infrastructure, declining life expectancy, and loss of opportunity for their children to have a better life than they were able to achieve They each blame the other side. But there are more than two sides to most folks experience. If ever the USA citizens abolish or just gets fed up with the two party system maybe things will change. In reality most people know there is little difference between the two parties so why even vote?

  12. Thuto

    While it might work in domestic politics, this mad man negotiating tactic erodes trust in international affairs and it will take decades for the US to recover from the harm done by Trump’s school yard bully approach. Even the docile Europeans are beginning to tire of this and once they get their balls stitched back on after being castrated for so long, America will have its work cut out crossing the chasm from unreliable and untrustworthy partner to being seen as dependable and worthy of entering into agreements with.

  13. Yves Smith Post author

    I am perplexed by your argument. The point is simple: Trump find weak counterparties or tries to create weakness by being so erratic. That tends to deter people who have any other choice from dealing with him, as in it creates negative selection.

    I don’t see how Trump “depends” on Putin or Xi. The US is so integrated with China that experts for many years have called it “Chimerica”. That relationship has bupkis to do with Trump or Xi personally. And separately, Trump and Xi deal directly with each other so infrequently that it’s hard to see any personal dependence.

    With Putin, the US economic relationship with Russia is limited (little in the way of trade flows and even fewer due to sanctions) and Putin has not done anything for Trump (the notion that “Russia” influenced the 2020 election has been debunked repeatedly by experts).

  14. Jeremy Grimm

    This analysis of Trump reminded me of a story I heard from the founders of a small rural radio station. Both had been in broadcasting for years at a large station in a major market, one as a program director and the other in sales. They competed for a broadcasting license that became available and they won. With the license in-hand they needed to obtain investments to get the station on-air within a year or they would lose the license. Even with their combined savings and as much money as they could obtain from other members of their families and from friends — they were short what they needed by several hundred thousand dollars. Their collateral was tapped out and banks wouldn’t loan on the broadcast license alone without further backing. They had to find private investors. They located and presented to several but their project could find no backers. In many cases prospects told them their project was too small — needed too little money — to be of interest. As the deadline for going on-air loomed they were put in touch with a wealthy local farmer.

    After a long evening presenting their business case to this farmer in ever greater detail, he sat back and told them he would give them the money they needed to get their station on-air — but he wanted a larger interest in the business than what they offered him. He wanted a 51% interest — a controlling interest — or he would not give them the money, and they both had to agree to work for the new radio station for a year after it went on-air. The two holders of the soon to be lost broadcast license looked at each other and told the farmer he could keep his money and left. The next day the farmer called on the phone and gave them the names and contact information for a few investors, any one of whom should be able and interested in investing the amounts they needed on their terms. He also told them that had they accepted his offer he would have driven them out of the new station before the end of the year it went on-air. He said he wanted to see whether they were ‘serious’ before putting them in touch with serious investors.

  15. juliania

    Sorry, assassination doesn’t fit into this scenario. That is a bridge too far. Trump has lost his effectiveness by boasting about this. It isn’t just unpredictability. It is dangerous unpredictability.

    1. Yves Smith Post author

      I never once said that Trump was studied in how he operates, in fact, I repeatedly pointed out that he’s highly emotional and undisciplined. I’m simply describing some implications.

  16. meadows

    If our corrupt Congress had not ceded their “co-equal” branch of gov’t authority over the last 40 years thereby gradually creating the Imperial Presidency that we have now, we might comfortably mitigate much of the mad king antics.

    Didn’t the Founding Fathers try desperately to escape the terrible wars of Europe brought on by the whims and grievances of inbred kings, generation after generation? Now on a whim w/out so much as a peep to Congress, presidential murder is committed and the CongressCritters bleat fruitlessly for crumbs of info about it.

    I see no signs of this top-heavy imperialism diminishing. Every decision will vanish into a black hole marked “classified.”

    I am profoundly discouraged at 68 who at 18 years old became a conscientious objector, that the same undeclared BS wars and BS lies are used to justify continuous conflct…almost nonstop these last 50 years… as if engaging in such violence can ever be sucessful in achieving peaceful ends? Unless the maintenance of fear, chaos and blowback are the actual desired result.

    Trump’s negotiating style is chaos-inducing deliberately, then eventually a “Big Daddy” Trump can fix the mess, spin the mess and those of us still in the thrall of big-daddyism can feel assuaged. It’s the relief of the famiy abuser who after the emotional violence establishes a temporary calm and family members briefly experience respite, yet remain wary and afraid.

  17. Edward

    In some ways Trump has a very Japanese style; everything is about saving face even if you are saying complete nonsense. You have to divine what his actual agenda is. However his approach to negotiation actually works in the business world, it is a disaster as diplomacy.

    In trying to make sense of his foreign policy, though, there are hidden factors; some how deep state interests are able to maneuver presidents into following the same policies. What is happening behind the scenes? This manipulation may be contaminating his negotiations.

  18. ian

    I saw an interview with someone (can’t remember who) who had a great analogy for the relationship between Trump and the press: think of the press as a herd of puppies and Trump is the guy with the tennis ball. He tosses outrageous things out there, they all chase it. One brings it back, he tosses it again.
    Why would he do this? My own take is that he invites chaos – he has a fluid style, changing his mind often, dumping people and the like which thrives in a chaotic environment. He likes to shake things up and look for openings.
    It also helps him do some things quietly in the background, along with key allies. While everyone was foaming at the mouth over Russian collusion, he and Mitch McConnell were busy getting appellate judges confirmed.
    I think it is a mistake to underestimate him – he is an unusual person, but far from stupid.

    1. xkeyscored

      It also helps him do some things quietly in the background
      I think you’ve hit the nail on the head there.

  19. drumlin woodchuckles

    There is a silver lining to that. If another term of Trump inspires the Europeans to abrogate NATO and put an end to that alliance and create their own NEATO ( North East Atlantic Treaty Organization) withOUT America and withOUT Canada and maybe withOUT some of those no-great-bargain East European countries; then NEATO Europe could reach its own Separate Peace with Russia and lower that tension point.

    And America could bring its hundred thousand hostages ( “soldiers”) back home from not-NATO-anymore Europe.

  20. KFritz

    Kim Jong Un uses similar tactics, strategy, perhaps even style. Clinically and intellectually, it’s interesting to watch their interaction. Emotionally, given their weaponry, it’s terrifying.

  21. Jason

    Great post! The part about selecting for desperate business partners is very insightful, it makes his cozying up to dictators and pariah states much more understandable. He probably thinks/feels that these leaders are so desperate for approval from a country like the US that, when he needs something from them, he will have more leverage and be able to impose what he wants.

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