The Political Scene | The New Yorker
Episode: Scoundrel Time
Date: October 6, 2016
Host: Dorothy Wickenden
Guests: John Cassidy (New Yorker staff writer), Sheila Kolhatkar (New Yorker staff writer)
Overview
In this episode, Dorothy Wickenden and her guests, John Cassidy and Sheila Kolhatkar, dissect the prevailing voter frustration with business tycoons, big banks, and politicians against the backdrop of the 2016 presidential race. The conversation centers around the explosive revelations of Donald Trump’s nearly $1 billion tax loss in 1995 (exposed by The New York Times) and the Wells Fargo scandal involving fake accounts. The discussion ties these stories to larger questions of accountability, populist anger, the rigged economic system, and the political calculus of both presidential candidates as Election Day nears.
Key Discussion Points & Insights
1. Trump’s $916 Million Loss and Tax Avoidance
- Background: Trump reported a massive business loss in 1995, allowing him to potentially avoid paying federal income taxes for up to 18 years [01:16].
- Reinvention Post-Bankruptcy: Trump emerged from near financial ruin by selling his brand and via television, rebranding himself as a "success" while not acknowledging past failures.
- "Genius" Spin: Republican surrogates like Rudy Giuliani and Chris Christie publicly called Trump “a genius” for using tax loopholes [01:16].
“Most observers of the tax code have never seen any loss like that for a personal tax filing. A billion dollars.”
— John Cassidy [03:14]
- Bank Bailout: Banks kept Trump afloat with salary and restructuring rather than forcing personal bankruptcy, betting on a better chance of recouping their loans.
- Contractors and Employees: Not paying small businesses and contractors was a pattern for Trump.
“That was his default setting. He always refuses to pay. And everything’s a sort of negotiation then.”
— John Cassidy [05:02]
- Tax Code Loophole: The U.S. tax code allows business losses to offset future income — which is legal but "never been seen... on the scale Trump did" [05:55].
2. Wells Fargo Scandal and Bank Accountability
- Scandal Details: Over 5,300 employees created 2 million fake accounts to hit aggressive sales quotas [06:34].
- Populist Outrage: Senator Elizabeth Warren grilled CEO John Stumpf in a viral Senate hearing, demanding his resignation and criminal investigation:
“If one of your tellers took a handful of $20 bills out of the cash drawer, they’d probably be looking at criminal charges for theft.... you kept your job, you kept your multimillion dollar bonuses, and you went on television to blame thousands of $12 an hour employees... This is about accountability. You should resign.”
— Elizabeth Warren [06:58]
- Easy-to-grasp Outrage: Ordinary workers were pressured and punished, while leadership profited.
- Clawback Explained: Leadership agreed to forgo future stock bonuses (“clawback”), but real accountability remains questionable [09:33].
“It’s sort of like he’s promising to give back something that he had been promised to get in the future. It’s not clear that he’s really giving anything up.”
— Sheila Kolhatkar [09:33]
3. Campaign Responses & Political Fallout
- Clinton’s Wall Street Complications: Hillary Clinton’s Wall Street ties—especially her unreleased Goldman Sachs speech transcripts—complicate her ability to respond forcefully to financial scandals. She has proposed extending Dodd-Frank reforms and curbing high-frequency trading [11:28].
- Trump’s Populist Shift: Although Trump started the campaign talking tough on banks, he’s since softened, possibly due to an increased reliance on fundraising from corporate interests [11:28].
- Scandal’s Impact on Election: Despite public rage, neither candidate is seen as a true “crusader” against the rigged system. The guests agree the Wells Fargo scandal is unlikely to significantly shift votes [13:38].
“I don’t think the Wells Fargo scandal has had that much of an impact on the campaign. I think most people already think that Wall Street is completely crooked.”
— John Cassidy [13:38]
4. Polling and Candidate Weaknesses
- Poll Trends: Since the first presidential debate, there has been a swing towards Clinton, especially in battleground states like North Carolina and Pennsylvania [15:43].
- Elizabeth Warren’s Role: Bringing Warren into a Clinton administration might help address Clinton's Wall Street credibility gap but would terrify many in the financial sector [14:23].
“She literally causes heart palpitations among bank CEOs. I mean, they just think she wants to come in and break their companies up into little tiny community banks.”
— Sheila Kolhatkar [14:23]
5. Populist Sentiments and the “Rigged System”
- Trump as Product of the System: The irony of Trump running as an anti-establishment candidate is discussed, given he benefited from the system he criticizes [16:41].
- Voter Economic Anxiety: Despite controversies, Trump’s simple jobs-focused rhetoric ("Jobs, jobs, jobs") resonates with economically strained voters, even if built on a mythologized self-image [17:34].
“He’s obviously a product of that system. He was born into wealth.... Now we know he’s enriched himself by not paying taxes... So there’s a real irony to that.”
— Sheila Kolhatkar [16:49]
- Electoral Consequences: While core Trump supporters aren't bothered by the tax revelations, persuading swing voters may be harder given the perception of gaming the system [18:23].
Notable Quotes & Memorable Moments
On Trump’s Losses and Reinvention:
"Trump was then bussed, and slowly but surely, he did dig himself out of the hole... became a reality television star and emerges 20 years later saying, look, I'm the great. A great success. And, of course, it never mentions the fact he lost a billion dollars."
— John Cassidy [03:14]
On Populist Outrage Over Wells Fargo:
“This is about accountability. You should resign. You should give back the money that you took while this scam was going on. And you should be criminally investigated.”
— Elizabeth Warren [06:58]
On Clinton and Wall Street:
"Bringing Elizabeth Warren into her Cabinet somehow would really help address this issue, because Elizabeth Warren is immensely popular with the sort of left side, the critics of Wall Street. At the same time, I think it would cause a heart attack in the financial world."
— Sheila Kolhatkar [14:23]
On Voters and the "Rigged System":
“Trump has been very adept at really speaking to people’s economic insecurity... In a lot of parts of the country, that is what people want to hear. They want a simple message.”
— Sheila Kolhatkar [17:34]
On Electoral Impact of Scandals:
“You have to win over the sort of center ground and the soccer moms in the suburbs, et cetera, people who are not following this closely and may be undecided... it seems to me that the side of a man who has lost a billion dollars and then not paid any federal income tax for... at least 20 years, I just think that is going to damage him with the sort of casual voter, swing voter, et cetera.”
— John Cassidy [18:23]
Important Timestamps for Segments
- [01:16] – Episode introduction and summary of Trump’s tax loss and the “rigged system”
- [03:14] – John Cassidy explains the scale of Trump’s business losses and recovery
- [05:02] – History of Trump’s pattern with contractors and tax precedent
- [06:34] – Discussion shifts to the Wells Fargo scandal and fraudulent accounts
- [06:58] – Elizabeth Warren’s Senate hearing grilling of Wells Fargo CEO
- [09:33] – Sheila Kolhatkar explains “clawback” and bank accountability
- [11:28] – Clinton’s response to Wall Street issues and campaign implications
- [13:38] – Do scandals affect polls/campaigns? Guest perspectives
- [14:23] – Potential impact of Elizabeth Warren in a Clinton administration
- [15:43] – Poll updates in swing states since the first debate
- [16:41] – The irony of Trump’s anti-establishment positioning
- [17:34] – Trump’s appeal to economic insecurity and jobs
- [18:23] – Electoral consequences of scandals for swing voters
Summary
The episode paints a portrait of an election season shaped by widespread distrust in economic and political institutions, and candidates who are both seen as emblematic of those broken systems. Through deep dives into the Trump tax story and Wells Fargo scandal, the hosts link elite impunity and populist outrage to broader themes defining 2016—while casting a skeptical eye on whether real change is forthcoming, regardless of who wins.