On the morning of November 9, 2016, the president-elect of the United States walked into the Oval Office to meet with the man he was about to replace. By most accounts, Barack Obama had prepared himself for an awkward conversation. He had stayed up late the night before, watching the returns come in with a mixture of disbelief and resignation, and had instructed his staff to ensure a smooth transition. What he had not prepared for was the man who sat across from him.
The Wall Street Journal and the New York Times reported that Donald Trump, the reality television star and real estate developer who had just defeated the most experienced politician of his generation, did not ask about nuclear codes or transition protocols or the arcana of executive power. He asked about the White House’s sound system. He wanted to know who handled the audio for presidential addresses. He had, he explained, been watching Obama’s speeches for years, and the production values were exceptional. The sound was always perfect. How did that work?
It was a moment so perfectly Trump that it might have been scripted. Here was a man who had spent his entire career learning one set of skills—how to project an image, how to control a narrative, how to emerge from disaster with his brand intact—meeting the man who had spent eight years managing the most complex institution on earth. And the only thing he wanted to know was how to make the audio sound good.
The story, which circulated among White House staff in the early days of the transition, was dismissed by some as apocryphal. But it had the ring of truth. For Trump had spent his business career mastering a very particular art: the art of the bankruptcy. Not the technical process of corporate insolvency, but something more profound—a way of moving through the world in which obligations are optional, rules are for other people, and the measure of success is not whether you pay your debts but whether you can convince everyone that you never owed them in the first place.
He brought that art to the presidency. And in doing so, he transformed the American state into something it had never quite been before: a bankrupt entity, operating on the logic of the debtor who refuses to accept the reality of his own insolvency, pushing obligations into the future, declaring victory while defaulting, and treating the rule of law as a series of procedural delays to be exploited rather than constraints to be respected.
The Education of a Bankruptcy Artist
The Trump of popular mythology is the self-made billionaire, the master builder, the man who put his name on towers of gold glass. The real Trump is something more interesting and, for the purposes of understanding his presidency, more instructive. He is not a builder but a liquidator. His genius, such as it is, lies not in creating value but in extracting it from structures that others built, and in walking away from the wreckage with his reputation—his brand, his most carefully managed asset—intact.
Consider the casinos. Between 1989 and 2009, Trump’s casino businesses in Atlantic City filed for bankruptcy protection no fewer than six times. The Trump Taj Mahal, which opened in 1990 with great fanfare and a $675 million price tag, was bankrupt within a year. Trump himself had personally guaranteed some of the debt, but he negotiated his way out of those guarantees, leaving bondholders and contractors holding the bag while he retained his name on the buildings and his ownership stake in the reorganized entities.
What was striking about these bankruptcies was not their frequency—Atlantic City was a graveyard of failed ambitions—but the way Trump conducted himself throughout. He did not treat bankruptcy as a failure. He treated it as a strategy. He borrowed at extraordinary leverage, extracted management fees from the operating entities, and when the debts came due, he used the bankruptcy courts not to liquidate but to restructure on terms that favored him. The lenders took losses. The contractors who had built his glittering towers received pennies on the dollar. Trump walked away, sometimes with a reduced ownership stake, always with his name still on the building, and emerged to tell the world that he was a genius who knew how to use the system.
In 1990, he explained his philosophy to a reporter from Spy magazine, which had been tracking his financial decline with undisguised glee. “I’ve used the laws of this country to pare debt,” he said. “We’ll have the company. We’ll throw it into a chapter. We’ll throw it into bankruptcy. We’ll negotiate with the banks. They’ll be in a position where they have to take certain things. It’s like a football team. You have to have a strategy.”
The football metaphor is revealing. For Trump, bankruptcy was not a last resort but a play in the playbook—a way to reset the game when the score was not going his way. And the rules of the game, in his telling, were not moral constraints but tactical obstacles to be navigated. The banks, he understood, would almost always take a restructuring over a liquidation. They would accept pennies on the dollar rather than spend years in litigation with a man who had unlimited resources for delay. They would let him keep his name on the building because the building was worth less without it. And when it was over, he would emerge, slightly diminished perhaps, but still standing, still talking, still Trump.
The Sovereign Debtor
This is the template that Trump brought to the presidency. And the American state, as it turned out, was remarkably vulnerable to it.
The federal government is, in one sense, the ultimate debtor. It borrows trillions of dollars, issues bonds backed by the full faith and credit of the United States, and promises to pay its bills on time. It is also, unlike a casino in Atlantic City, subject to constitutional and statutory constraints that are supposed to prevent it from defaulting on its obligations. The debt ceiling, for all its absurdity, is a real constraint; the separation of powers is a real constraint; the Antideficiency Act, which prohibits the government from spending money that Congress has not appropriated, is a real constraint.
Trump treated these constraints as his Atlantic City creditors had treated his casino debt: as obstacles to be navigated, not limits to be respected. When Congress refused to fund his border wall in 2018, he shut down the government for 35 days—the longest shutdown in American history—not because he had a plausible path to victory but because he believed that the pain of the shutdown would force his opponents to capitulate. It did not. He eventually signed a funding bill without the wall, declaring victory anyway. The shutdown had cost the economy an estimated $11 billion, much of it unrecoverable. But Trump had learned something: the federal government, like a bankrupt casino, could be used as a bargaining chip, its functioning held hostage to the demands of the man who nominally ran it.
The pattern repeated. When he wanted to divert military construction funds to the wall after Congress refused to appropriate them, he declared a national emergency—a legal maneuver so tenuous that even his own administration’s lawyers struggled to defend it. The courts eventually struck down parts of the effort, but by then the money had been moved, the wall had been built in symbolic patches, and Trump had once again demonstrated that he would treat legal constraints as suggestions.
This was not, as some of his defenders argued, a muscular assertion of executive power in the tradition of Lincoln or FDR. It was something different. Lincoln and FDR used emergency powers to meet genuine national crises; they sought, and largely received, congressional and judicial backing for their actions. Trump used emergency powers to circumvent a congressional rejection that was itself the product of democratic deliberation. He was not governing. He was restructuring—treating the constitutional order as a set of creditors to be negotiated with, pushed against, and ultimately forced to accept terms more favorable to him.
The Art of the Pardon
Nowhere was the bankruptcy logic clearer than in Trump’s use of the pardon power. The Constitution grants the president the authority to pardon federal crimes, and presidents have historically used this power with circumspection—for mercy, for reconciliation, for the occasional political favor. Trump used it as a debtor uses a discharge in bankruptcy: to wipe away obligations that had become inconvenient.
His first pardon, in August 2017, went to Joe Arpaio, the former sheriff of Maricopa County, Arizona, who had been convicted of criminal contempt for defying a court order to stop racially profiling Latinos. Arpaio was a Trump ally, a fixture on the anti-immigration circuit, and a man whose conviction had become a cause célèbre on the right. The pardon was not about justice. It was about signaling: I can wipe away the consequences for those who are loyal to me.
Over the next four years, Trump issued pardons to an extraordinary rogues’ gallery of allies, cronies, and figures who embodied his contempt for the rule of law. He pardoned his former campaign adviser Roger Stone, who had been convicted of lying to Congress and witness tampering. He pardoned his former national security adviser Michael Flynn, who had pleaded guilty to lying to the FBI. He pardoned the father-in-law of his son-in-law, Charles Kushner, who had been convicted of tax evasion and witness retaliation—a case that Trump had reportedly considered for a pardon for years. He commuted the sentence of his longtime friend and political operative Roger Stone, who had been convicted of obstruction and witness tampering. He pardoned four former Blackwater contractors who had been convicted of killing unarmed Iraqi civilians, a case that had been a cause célèbre on the right for years.
What linked these pardons was not a consistent theory of mercy or justice. It was the logic of the debtor who discharges his own obligations by declaring that the obligations never really counted. The rule of law, in this framework, is a set of debts that the sovereign can choose to forgive—for himself, for his friends, for anyone whose loyalty he wishes to purchase. The pardon power, originally conceived as a tool for mercy and reconciliation, became instead a tool for the privatizationPrivatization Full Description:The transfer of ownership, property, or business from the government to the private sector. It involves selling off public assets—such as water, rail, energy, and housing—turning shared public goods into commodities for profit. Privatization is based on the neoliberal assumption that the private sector is inherently more efficient than the public sector. Governments sell off state-owned enterprises to private investors, often at discounted rates, arguing that the profit motive will drive better service and lower costs.
Critical Perspective:Critics view privatization as the “enclosure of the commons.” It frequently leads to higher prices for essential services, as private companies prioritize shareholder returns over public access. It also hollows out the state, stripping it of its capacity to act and leaving citizens at the mercy of private monopolies for their basic needs (like water or electricity).
Read more of justice: the president could decide, on his own authority, who would be held accountable for crimes and who would not.
This was not merely corrupt. It was a kind of political bankruptcy: a declaration that the state’s claims on its citizens—the web of obligations that constitutes the rule of law—were negotiable, contingent, subject to the whims of the man at the top.
The Litigation Presidency
The bankruptcy logic extended beyond the pardon power to Trump’s approach to legal accountability itself. Throughout his presidency, Trump was the defendant in a staggering array of civil and criminal investigations: the Mueller investigation into Russian interference, the Southern District of New York’s investigation into his hush-money payments to Stormy Daniels, the New York attorney general’s investigation into his business practices, multiple congressional investigations into his conduct in office. His response to each was identical to his response to the casino creditors: delay, deny, litigate, and above all, never accept that the rules apply to you.
The Mueller investigation is the paradigmatic case. Trump spent two years attacking the investigation as a “witch hunt,” a “hoax,” and a “deep state conspiracy.” He dangled pardons to potential witnesses. He attempted to fire Mueller multiple times, and was only prevented from doing so by White House counsel Don McGahn’s threat to resign. He refused to sit for an interview with Mueller’s team, submitting only written answers that were evasive and incomplete. And when Mueller’s report was released—documenting extensive Russian interference, ten episodes of potential obstruction of justiceObstruction of Justice Full Description:A criminal act involving the interference with the due administration of justice. In this context, it referred to the administration’s systematic efforts to stop the FBI investigation into the break-in, including destroying evidence and authorizing hush money payments. Obstruction of Justice was the “smoking gun” of the scandal. While the initial crime (the burglary) was serious, the cover-up was the fatal blow to the administration. It involved the President utilizing the CIA to block the FBI, effectively turning the nation’s intelligence agencies into a personal protection racket for the incumbent party.
Critical Perspective:This charge highlights the abuse of institutional power. It was not merely about lying, but about the corruption of the state’s neutral machinery. It demonstrated how the vast powers accumulated by the executive branch during the Cold War could be turned inward against domestic political opponents and the rule of law itself.
Read more, and a pattern of conduct that Mueller explicitly declined to exonerate—Trump declared victory and moved on.
The legal strategy was the same one he had used in Atlantic City: run out the clock. The bankruptcy process is designed to give debtors breathing room; the debtor who can delay long enough, litigate hard enough, and make the process painful enough for his creditors will almost always get better terms. Trump applied this logic to the presidency itself. He did not need to win on the merits; he only needed to ensure that any judgment against him came too late to matter.
In Atlantic City, the creditors eventually gave up. In Washington, the same thing happened. The Mueller investigation concluded without a clear resolution. The congressional investigations ran into the 2020 election and then into the Trump-aligned Supreme Court’s expansive view of executive privilegeExecutive Privilege Full Description:The power claimed by the President to resist subpoenas and withhold information from other branches of government and the public. It is based on the argument that the executive needs confidential advice to function effectively. Executive Privilege became the central legal battlefield of the scandal. The President attempted to use this doctrine to refuse to hand over the “White House Tapes” (recordings of conversations in the Oval Office). The administration argued that the separation of powers gave the President an absolute right to secrecy that could not be breached by the courts.
Critical Perspective:Critically, this doctrine was weaponized to transform the presidency into a quasi-monarchy. By claiming that the President’s conversations were immune from judicial review, the administration essentially argued that the President was not a citizen subject to the law, but a sovereign ruler. The eventual Supreme Court ruling limited this power, establishing that privilege cannot be used to hide evidence of a crime.
Read more. The Southern District of New York’s investigation into the hush-money payments was delayed by litigation, then by the pandemic, then by the transition. Trump left office with most of his legal exposure unresolved, having run out the clock on accountability the same way he had run out the clock on his debts.
The Debt That Cannot Be Discharged
The bankruptcy of the Atlantic City casinos was, in the end, a financial event. The bankruptcy of the American presidency, if that is what we are witnessing, is something else entirely. It is not about money. It is about the erosion of the norms, expectations, and institutional constraints that made the presidency a functional office.
Trump did not create this erosion single-handedly. The imperial presidencyImperial Presidency
Full Description:A term coined by historian Arthur Schlesinger Jr. to describe a presidency that has exceeded its constitutional limits. It refers to the gradual accumulation of unchecked power by the executive branch, particularly in foreign policy and war-making, culminating in the abuses of the Nixon era. The Imperial Presidency argues that the Cold War fundamentally unbalanced the American constitution. The constant state of crisis allowed Presidents to bypass Congress, wage undeclared wars, and cloak their actions in secrecy. Nixon was not an anomaly but the logical endpoint of this trend, believing the President’s powers were virtually unlimited.
Critical Perspective:Watergate was the crash of the Imperial Presidency. The post-Watergate reforms (War Powers Act, FISA courts) were attempts to dismantle this structure. However, critics argue these reforms failed in the long run, and that the modern presidency has regained, and even surpassed, the “imperial” powers that Nixon claimed, often using the same “national security” justifications.
Read more, the expansion of executive power, the weakening of congressional oversight, the rise of the unitary executive theory—these were trends that long predated him. But Trump did something that his predecessors, even the most ambitious among them, had not done: he treated the presidency as a personally owned asset, not an institution to be stewarded.
Consider the contrast with Richard Nixon, the president to whom Trump is most often compared. Nixon, too, believed that the rules did not apply to him. Nixon, too, abused the powers of his office to punish his enemies and protect his allies. But when the walls closed in, Nixon understood that he had violated the norms of his office in a way that was not sustainable. He resigned. Trump, faced with the same calculus, refused. He told his staff that Nixon made a mistake by resigning. He believed—and his belief was not entirely irrational—that he could weather any storm, survive any investigation, evade any accountability, simply by refusing to accept the legitimacy of the process.
This is the bankruptcy logic taken to its ultimate conclusion. The debtor who cannot pay his debts can, in the end, be forced into liquidation. But the sovereign who treats the state as his personal property has no such constraint. There is no bankruptcy court for the presidency. There is no receiver who can take control of the Oval Office and force it to pay its obligations. The only constraints are political and cultural: the norms that presidents will respect the rule of law, that they will accept the results of elections, that they will treat the office as something larger than themselves.
Trump tested those norms to destruction. He refused to concede the 2020 election. He attempted to pressure state officials to “find” votes that would overturn the results. He summoned a mob to Washington on January 6, 2021, and watched on television as they attacked the Capitol, refusing for hours to call them off. He left office not as a president who had accepted defeat but as a debtor who had simply refused to pay, declaring that the obligations were illegitimate and walking away.
The Unfinished Bankruptcy
When Trump left the White House in January 2021, he took with him the boxes of documents that would later become the subject of a criminal investigation. He decamped to Mar-a-Lago, his Florida club, where he continued to operate as if the presidency were a business he still controlled. He held rallies. He endorsed candidates. He demanded loyalty. And he continued to insist that the debts he had incurred—the impeachments, the investigations, the judgment of history—were not his to pay.
In the years since, the legal system has attempted to do what the political system could not: hold him accountable. He has been indicted four times, convicted of 34 felonies in Manhattan, found liable for sexual abuse and defamation in federal court, and ordered to pay hundreds of millions of dollars in civil penalties. And through it all, he has deployed the same strategy he used in Atlantic City: delay, deny, litigate, and above all, treat the process as a game to be won, not a constraint to be respected.
The bankruptcy of the Trump Organization was a financial matter. The bankruptcy of Trump’s presidency, if it is to be avoided, will require something that the American political system has not yet demonstrated it can provide: a recognition that some obligations cannot be discharged, that some debts must be paid, that the rule of law applies to those who hold power as much as to those who do not.
The man who asked Barack Obama about the White House sound system understood something that his predecessors did not. He understood that the presidency, like the casino, is a stage. And he understood that on a stage, the most important thing is not the structure of the building or the solvency of the enterprise or the welfare of the workers who build it. The most important thing is the performance—the projection of power, the control of the narrative, the ability to emerge from disaster with your name still on the building and your audience still believing that you are the one in charge.
The casinos eventually failed. The creditors took their losses. The buildings still stand, some of them, with Trump’s name still on them, monuments to a man who understood how to extract value from structures he did not build. The question for the American republic is whether the presidency—the institution, the office, the idea—will fare any better. Or whether it, too, will be stripped of its value, its obligations repudiated, its constraints ignored, until all that remains is the name on the building and the memory of a man who knew how to walk away.
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