In Fear City, a recently published book about this little-understood chapter in America’s past, historian Kim Phillips-Fein meticulously documents how the remaking of New York City in the seventies was a prelude to what would become a global tidal wave, one that has left the world sharply divided between the one percent and the rest—and nowhere more so than in the city Donald Trump calls home. It’s also a story in which Trump plays a starring, if unflattering, role.
In 1975, with no help forthcoming from President Gerald Ford, it looked so likely that the United States’ largest and most storied city would actually go bankrupt that the New York Daily News ran a banner headline that said simply: FORD TO CITY: DROP DEAD. At the time, Trump was just twenty-nine years old and still working in the shadow of his wealthy father, who had made his fortune building distinctly unflashy middle-class homes in New York’s outer boroughs—and who was notorious as a landlord practicing systemic discrimination against African Americans.
Trump had always dreamed of making his mark in Manhattan, and with the debt crisis he saw his big chance. The opening came in 1976, when the famed Commodore Hotel, a historic midtown landmark, announced that it was losing so much money that it might have to close down. The city government was panicked at the prospect of this iconic building sitting empty, broadcasting a message of urban decay and depriving the city of tax revenue. They needed a buyer, quick, and the mood was sufficiently desperate that, as one local television broadcast put it, “beggars can’t be choosers.”
Enter Trump, proto–disaster capitalist. Partnering with the Hyatt Corporation, Trump had a plan to replace the Commodore’s classic brick facade with “a new skin” of reflective glass, and to reopen it as the Grand Hyatt Hotel (this was in the brief window before the future US president began insisting that all his developments bear his name). He extracted extraordinary terms from a city in crisis. As Phillips-Fein explains:
Trump would be allowed to purchase the property from the railroad for $9.5 million. Then he would sell it for a dollar to the Urban Development Corporation….Finally, the UDC would lease the property back to Trump and the Hyatt Corporation for ninety-nine years, allowing the developers to pay taxes far below the normal rate for four decades—a windfall worth hundreds of millions of dollars. (As of 2016, Trump’s tax break has cost New York City $360 million in uncollected taxes.)
Yes, that’s right: for $9.5 million down, Trump extracted a tax-break windfall for the property worth $360 million (and counting) from the city. The new hotel was a blight—what one architectural critic described as “an out-of-towner’s vision of city life.” In other words, it was vintage Trump, a man who would go on to sell the world on a Russian oligarch’s vision of the United States as filtered through bootleg VHS copies of the eighties soap operas Dynasty and Dallas. In Phillips-Fein’s words:
Donald Trump and the developers who exploited the city’s desperation to build their towers had little interest in the rest of New York. The fact that millions of dollars went to subsidize building projects instead of restoring public services or promoting recovery in the poor and working-class neighborhoods of the city never registered as a moral concern.
What is striking about this story is not simply that a young Trump seized on New York’s economic catastrophe to boost his own fortune, extracting predatory terms from a government in crisis. It’s also that this was not just any deal—it was the one that let Trump emerge from his father’s shadow and decisively turned him into a player in his own right. Trump’s career was forged in shock, shaped by the unique opportunities for profit presented by moments of crisis. Right from his breakout moment, his attitude toward the public sphere was that it was there to be pillaged, to enrich himself.
It’s an attitude that has stayed with him ever since. It’s worth remembering that on September 11, 2001, shortly after the Twin Towers came down, Trump gave an interview to a radio station during which he could not help observing that, with the Towers gone, he now had the tallest building in downtown Manhattan. Dead bodies were in the street, lower Manhattan looked like a war zone, and yet, with only a little encouragement from the radio hosts, Trump was thinking about his brand advantage.
When I asked Phillips-Fein what lessons she drew from studying Trump’s actions during New York’s debt crisis, her reply was all about fear. There was, she said, “this deep level of fear about bankruptcy, fear of the future. And it’s that kind of fear that really makes possible the cutbacks of the time, and also the sense that the city needs a savior in the first place.” Since the 2016 election, she has been thinking about this a lot. “The way that fear can make things that seem politically impossible suddenly feel as though they’re the only alternative. And so I think that is one of the things that we need to fight at this moment, and to find ways to resist that sense of overwhelming fear and chaos, and to find forms of solidarity that can counter it.”
It’s good advice. Especially since Trump has assembled around him an all-star cast of crisis opportunists.
Meet the Disaster Capitalism Cabinet
Senior members of Trump’s team have been at the heart of some of the most egregious examples of the shock doctrine in recent memory. What follows is a brief overview of their exploits (which, by nature of just how many Goldman Sachs executives Trump has appointed, is by no means exhaustive).
Profiting from Climate Change and War
Rex Tillerson, US secretary of state, has built his career in large part around taking advantage of the profitability of war and instability. ExxonMobil profited more than any oil major from the increase in the price of oil that was the result of the 2003 invasion of Iraq. It also directly exploited the Iraq War to defy State Department advice and make an exploration deal in Iraqi Kurdistan, a move that, because it sidelined Iraq’s central government, could well have sparked a full-blown civil war, and certainly did contribute to internal conflict.
As CEO of ExxonMobil, Tillerson profited from disaster in other ways as well. As we have already seen, as an executive at the fossil fuel giant, he spent his career working for a company that, despite its own scientists’ research into the reality of human-caused climate change, decided to fund and spread misinformation and junk climate science. All the while, according to an LA Times investigation, ExxonMobil (both before and after those two companies merged) worked diligently to figure out how to further profit from and protect itself against the very crisis on which it was casting doubt. It did so by exploring drilling in the Arctic (which was melting, thanks to climate change), redesigning a natural gas pipeline in the North Sea to accommodate rising sea levels and supercharged storms, and doing the same for a new rig off the coast of Nova Scotia.