< Go Back

Who’s Afraid of Donald Trump?

Who’s Afraid of Donald Trump?

    For new readers:

    I have already disavowed Donald Trump for being scary. And by that I mean he scares my fellow citizens, which I find unacceptable. 

    My policy views don’t line up with any of the candidates’ positions, including Trump’s. I don’t vote and I am not a member of a political party. I try to avoid identifying with any political label because doing so would make me biased and less credible.

    My interest in Trump is his persuasion skills. I have never seen better.

    — start —

    A Donald Trump presidency might offer a once-in-a-lifetime chance to fire the government of the United States. 

    Whatever that means. 

    If you support Trump, you probably think it means he will remove the influence of big money and make common-sense decisions based on good advice. That sounds like a good thing. 

    If you are anti-Trump, you probably fear he will acquire too much control and become a crazy racist dictator who declares war on China. For the record, I think that would be a bad thing.

    So how would you assess the risk/reward of a Trump presidency? I’ll help you put the question in context, then you decide.

    Sizing the Risk

    As President of the United States, Trump would be both powerful and unpredictable. Trump often says he is intentionally unpredictable because it gives him an advantage in negotiating. The combination of power and unpredictability should scare you. And apparently it does scare a lot of people. As risks go, it doesn’t get much bigger.

    But as I learned in school, you can’t compare something to nothing. You need to compare the risk of a Trump presidency to the alternatives. And that alternative is probably a Clinton presidency that is not too different from the current presidency.

    So how risky would “more of the same” be?

    Budget-wise, we are probably on the road to ruin. The more-of-the-same president is unlikely to stop the special interests and big money players from bloating the budget to the point of crushing debt.

    Nor would we have any reason to expect the economy to have any extra zip under a more-of-the-same scenario. So no matter how bad you think Trump might be for the economy, the more-of-the-same alternative is probably a pathway to crushing debts and financial doom.

    And once the economy dies, we all die. So as risks go, “more of the same” might be the highest risk of all. The only way we would escape economic doom under the more-of-the-same scenario is for some unpredictable future event to change our direction in a positive way. Is that likely?

    Trump, on the other hand, is an unpredictable future event that can change just about anything, as we have already learned. So in terms of economic risk, Clinton is a path to probable budget doom whereas Trump can go either way. 

    As far as I can tell, homeland security seems effective under President Obama, at least in terms of preventing Belgium-sized attacks. But we have a growing risk from terrorists disguised as immigrants from the middle east. There’s no way to assess that risk because we don’t know how well the vetting process in this country works. But if we assume the people doing the vetting are no more competent than your coworkers, reach your own conclusions about that risk.

    Trump adds risk to the world by suggesting a temporary end to Muslim immigration. That rubs a billion people the wrong way. It might spark violence and it might worsen the country’s reputation. The tradeoff for that risk is (Trump hopes) a lower risk of terrorists reaching our soil. 

    How do you balance those risks?

    If you think Trump is a racist, his proposal of a Muslim immigration ban looks like the beginning of something terrible. But if you believe Trump is totally transparent about sacrificing “political correctness” for national security, it just looks like aggressive risk management. 

    Your Psychic Abilities

    If you are sure you know how a Trump presidency would play out, ask yourself how often you have been right about this sort of thing in the past. Humans are notoriously terrible at predicting the future. Consider the fact that almost no human can pick stocks that will outperform the index no matter how much information is available. That should give you some humility.

    Some of you are not aware that financial advice is mostly a scam. Experts can’t pick winning stocks any better than a monkey with a dart board. I learned that fact when I got my B.A. in economics. I learned it a second time when I got my MBA at the Haas School of Business at Berkeley. And I learned it a third time when I ignored everything I learned in school and tried to pick stocks.

    But now I’m fairly sure I can’t pick stocks.

    If you can pick winning stocks year after year, then you might have some unusual ability to see the future. If I ever meet you, I will take seriously your predictions about a Trump presidency. And I also want some stock tips.

    Okay, okay. I realize stocks and humans are different. But ask yourself how often you thought a relationship would go one way and it went the other. And look around at your fellow citizens who are divorced or unhappy in their relationships. How good are we at predicting the future of other people?

    Have you ever been involved in hiring? I have. I’ve hired lots of people for lots of things over the years. I have also partnered with lots of folks for lots of things. And I can assure you I was surprised most of those times. No matter how much information I think I have, people still surprise me. 

    Now look around at your idiot coworkers and ask yourself how well your boss makes hiring decisions.

    If you get a chance, ask the smartest venture capitalist or angel investor how they spot a winning startup. The answer is that they are all guessing. No one knows what the future holds.

    Humans are terrible at predicting the future. We are also terrible at knowing we can’t do it. Ask yourself if you are the rare exception.

    Rising Racial Tensions

    A Trump presidency might raise racial tensions and increase the odds of violence. I think most observers would agree that Trump is gaming the primary process by doing the dog-whistle racism strategy. He is transparent about being flexible in how he wins, so long as he wins. Here Trump appears to be making a conscious decision to increase the risks of racial tensions in order to protect the homeland, both economically and physically.

    Is that moral? Definitely not. Is it a good tradeoff in terms of risk? We don’t know. Ask Belgium.

    Bad Role Model

    Some say Trump is a bad role model for our children, with his rude language, his insults, his political incorrectness, and his inability to admit wrong. 

    Other people say that if your kid is using Trump as a role model, you have failed as a parent. 

    Trump isn’t running as a role model for your kids. He hasn’t even tried to make that case. Apparently that is a low priority for him. He’s more about national security and the economy. So while it is fair to ding Trump for the role model problem, you have to ask yourself where “role model for my kid” lands on your list of national priorities.

    Trump Talks Crazy so He Must be Crazy

    Trump talks crazy. He says water is dry and up is down except when it is up. His budget is nonsense and his policies seem to shift on a daily basis.

    That sounds unstable.

    But Trump also has nearly seventy years of track record that says he isn’t crazy or unstable in any way. The man has never had a drug or a drink. He has been appropriately hesitant to go to war and he has never stabbed anyone in the belt buckle.

    How many people change their character when they get to seventy? None, unless they have mental problems. The smart money says Trump is whatever he has always been.

    And what he has always been is a guy who wrote a book on how to be unpredictable to win negotiations. He’s doing just that, and completely transparent about it. He says he is stirring up controversy to get free television time. And we observe that to be true.

    Trump might have suddenly turned crazy at the same time that acting crazy was exactly the right strategy to win the Republican primary. But you have to ask yourself how big of a coincidence that would be.

    And Trump has already shown he can pretend to be presidential on command. That tells you he presents whatever vision of himself gets the best result.

    Trump is a Con Artist and a Narcissist

    What you call a con artist, Trump calls negotiating. I call it persuasion. And we all call it politics. It’s all the same thing. Trump just does it better than his opponents.

    And that’s exactly the skill he is offering to the country. The president’s job is to persuade people. He needs to persuade Congress, voters, and the rest of the world about all sorts of things. He needs to negotiate, cajole, and lead.

    You can call persuasion manipulation. You can call negotiating conning. But don’t lose sight of the fact we ask our president to do exactly those things.

    But what about Trump’s narcissism? Is that a risk?

    Maybe. But I have trouble seeing how he could feed his ego without doing a good job as president. Trump is proposing we staple his reputation to the reputation of the country. I can’t see a scenario in which he screws the country and thinks it will work out well for him personally. That would be more crazy than narcissistic. 

    Those Business Failures

    Trump had a number of bankruptcies and failed businesses. By way of context, I have over thirty business failures on my record. Far more if you count Dilbert licensees. A typical startup has about a 10% chance of making it. Trump is entrepreneurial by nature, so you should expect a high number of failures. The number of failures don’t tell you anything.

    To judge Trump’s business skill, look for how he managed his personal risk. And apparently he did that well. The bankruptcies protected his personal assets, and his license deals probably pay him a guaranteed advance no matter how well the licensee does. In other words, he made good deals that gave him a big upside but not much downside. 

    You might have seen estimates from experts saying Trump would be richer if he had simply put his inheritance millions into a stock index fund. But I believe those calculations ignore what he spends, gives to ex-wives, etc. I wouldn’t trust them.

    When to Accept Higher Risk

    Generally speaking, you want to avoid risks (such as Trump) when things are going well, and you want to invite the right kind of risk when things are not. For example, if you think the budget of the United States will reverse course and balance itself before we are broke, you probably don’t want the extra risk of a Trump presidency. Likewise, if you think there is no real risk from having porous borders, you don’t want the risks of a Trump presidency.

    But if you think the government is broken, and you want to send a wrecking ball to Washington D.C., Trump offers that possibility. We just don’t know what else he offers because we can’t see the future.

    If this blog post seems too long, you would hate my book. It is even longer than this.

More Episodes