Donald Trump's big vulnerability has surfaced

He might not flame out the way establishment pundits predict, but Donald Trump isn’t invulnerable either—and his weaknesses are beginning to appear.

Trump has obviously surprised everybody (but himself) by surging to the head of the polls despite jarring statements about Mexican rapists, our stupid political leaders and Carly Fiorina’s face. Trump’s undoing, however, might be hiding in plain sight—the four corporate bankruptcies his companies have declared.

Trump says these Chapter 11 filings are nothing more than a shrewd businessman using “the laws of this country” to his advantage. It’s true that bankruptcy is considered a legitimate way to restructure a troubled company and give it a second chance, instead of just liquidating it. But it’s also a last-resort option when all else has failed, and it is hardly a mark of success.

More importantly, there’s not really a Chapter 11 equivalent when it comes to government, especially the federal government. While a few municipalities and one metropolis—Detroit—have declared bankruptcy, it has hardly been a benign fresh start. Those bankruptcies have generally come at the end of a brutal process of cutting services, salaries and pensions, and raising fees and taxes, that often sends residents fleeing elsewhere. Detroit might be showing signs of life, but its population has plummeted and it’s a shell of the city it used to be.

Trump constantly touts his business experience as his greatest strength. “I want to put whatever that talent is to work for this country,” he said in the recent CNN debate, “so we have great trade deals, we make our country rich again, we make it great again.”

Two of his rivals, Scott Walker and Carly Fiorina, pointed out that part of Trump's talent is expert use of the bankruptcy code. “You took four major projects into bankruptcy,” Walker said to Trump. “You can't take America into bankruptcy.” That sound bite may have taken Walker and his staff weeks to come up with, but it neatly summarizes the problem many business leaders face when they try to enter politics: What works in business doesn’t always work in government.

Here’s the basic story on Trump’s four bankruptcies: All four were corporate bankruptcies involving properties in Atlantic City, the East Coast gambling hub that dwindled as many nearby states legalized gambling, eliminating the city’s monopoly. All four of those bankruptcies allowed the casino in question to shed debt and stay in business, instead of folding. Trump’s lenders and investors lost a lot of money, yet Trump was still able to keep raising money in the financial markets, a sign of his allure as a business partner and his ability to sell himself.

Trump has never declared personal bankruptcy, as he frequently points out. But his first corporate Chapter 11 filing, involving the Trump Taj Mahal in 1991, put Trump in a tight spot and forced him to sell his Trump Princess yacht, his Trump Shuttle airline and other prized assets. Plus, it cost him a lot of pride. So Trump has certainly felt the sting of losing, even if he didn’t go as far as a personal bankruptcy filing.

Has any of this prepared Trump for the challenges of the presidency? It’s hard to tell, but he didn’t  declare bankruptcy once and vow never to go through that again, as many recovered bankruptistas  seared by the experience have done. His bankruptcies occurred in 1991, 1992, 2004 and 2009—an 18-year span. As Forbes points out, Trump’s personal stake in the business declined each time, as he learned to put other people’s money behind his own name and spread the pain around, if it came.

It’s hard to see how this tactic might work in government, and it may generate the type of hubris (Trump? Hubris?) that leads smart people to think they can conquer the laws of nature and fly where others have crashed. The federal government can’t declare bankruptcy or anything like it without sending the world economy into a disastrous tailspin. Congressional Republicans tried a mini version of that by threatening a default on U.S. debt in 2011, and it backfired so badly that the stock market tanked for 6 months and their worst foe, President Obama, tap-danced to reelection.

Other than a brief flutter by Scott Walker, none of Trump’s other Republican rivals have hit him hard about being a serial bankruptcy declarer. If they’re tired of waiting for Trump to self-destruct, then bankruptcy is Trump’s Achilles heel. He considers it a routine and even prudent aspect of operating a business. It’s not, and it has ugly ramifications even under favorable circumstances.

Die-hard Trumpers will stick with their man no matter what. But Trump’s bombast will wear thin amid Republicans on the fence as they learn more about his bailouts and question whether that’s a model for government. Trump is such a good salesman that he’s made bankruptcy—the art of the fail—seem like a sound business strategy. He’s turning out to be a gifted politician, after all.

Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.