On the opening day of Trump Plaza in Atlantic City
in 1984, Donald Trump stood in a dark topcoat on the casino floor celebrating
his new investment as the “finest building
in the city and possibly the nation.”
Thirty years later, the Trump
Plaza folded, leaving some 1,000 employees without jobs. Trump, meanwhile, was
on Twitter claiming he had “nothing to do with Atlantic City,” and praising
himself for his “great timing” in getting out of the investment.
As I show in my new book, “Saving Capitalism: For the Many, Not the Few,” people with lots of money can easily
avoid the consequences of bad bets and big losses by cashing out at the first sign
of trouble. Bankruptcy laws protect them. But workers who move to a place like
Atlantic City for a job, invest in a home there, and build their skills have no
such protection. Jobs vanish, skills are suddenly irrelevant and home values
plummet. They’re stuck with the mess.
Bankruptcy was designed so people could start over.
But these days, the only ones starting over are big corporations, wealthy
moguls and Wall Street bankers, who have had enough political clout to shape
bankruptcy laws (like many other laws) to their needs.
One of the most basic of all economic issues is
what to do when someone can’t pay what they owe. The U.S. Constitution (Article
I, Section 8, Clause 4) authorizes Congress to enact “uniform Laws on the
subject of Bankruptcies throughout the United States,” and Congress has done so
In the last few decades, these changes have
reflected the demands of giant corporations, Wall Street banks, big developers
and major credit card companies who wanted to make it harder for average people
to declare bankruptcy but easier for themselves to do the same.
The granddaddy of all failures to repay
Originally appeared at: http://robertreich.org/post/130158250735