A lot of problems that the establishment has been ignoring for decades, e.g., illegal immigration, out of control PC policing, pensions for government employees crowding out other spending, are starting to become critical and the seasoned politicians don’t know how to address these problems. In fact they probably can’t be addressed without upsetting established interests to whom the seasoned politicians are beholden to.
I don’t think it makes sense to call Trump a ‘windbag millionaire’. Trump is a billionaire because he’s good at dealmaking which is a relevant skill for political campaigning.
Offensively attacking Fox news and then having Fox news fold is an example of a political move that’s likely calculated and no other Republican candidate could have pulled of the same way.
Trump and other politicians of this session show that the model of political electioneering that is about polling and then saying whatever polls best isn’t the only one that works.
Through calling for the US to bomb Daesh’s oil industry Trump already achieved concrete policy changes of US policy. Trump isn’t stupid or uncalculated even when his public persona gives the impression that he’s uncalculated.
Trump is a billionaire because he’s good at dealmaking
It’s not clear that that’s true. E.g., earlier this year someone asked the question: If Trump had just taken all his money in 1987 and put it in index funds rather than trying to grow it himself, what would have happened? The answer, apparently, is that he’d be about 3x richer than he is now.
The reason for picking 1987 is less than fully convincing, though, so it’s possible that there’s some misleading cherry-picking going on. This article, as well as quoting the other one, says that if he’d put his money in index funds in 1978 instead of 1987 he’d now be about twice as rich as he actually is. Trump apparently disputes both the “before” and “after” figures, but if instead we use his own figures for 1976 (why 1976? because that’s when we have figures from) he still ends up having underperformed the market.
So, I dunno, maybe he’s good at dealmaking, but it seems like the main reason he’s rich is that he inherited a fortune from his family. Everything he’s done since to grow his wealth could have been done at least about as well (and maybe much better) by just putting the money into the stock market.
If Trump had just taken all his money in 1987 and put it in index funds rather than trying to grow it himself, what would have happened? The answer, apparently, is that he’d be about 3x richer than he is now.
That’s not a good comparison. There are many more people who inherited as much money and who haven’t increased their wealth.
But apart from pure numbers, if I observe Trump style of interaction with journalists who interview his looks to me a lot like Carl Icahn’s style. In both cases there an extreme amount of frame control that comes across as pretty rude.
That’s the kind of stuff that get’s Scotts Adams write gushing articles about Trump.
I think that Scott Adams predictions are widely overconfident but I see what Scott Adams means when he speaks about Trumps language usage. Then I have had hypnosis training just as Scott Adams, so it can be that the patterns are otherwise hard to spot.
That’s not a good comparison. There are many more people who inherited as much money and who haven’t increased their wealth.
It suggests that Trump has been less successful, in terms of turning money into more money, than the average business in one of those index funds. The fact that individual investors often do even worse than that by investing badly is neither here nor there.
than the average business in one of those index funds.
Most businesses do worse than the average business in one of those index funds. Individuals don’t maxmize for wealth. Trump has brought a big yacht. He doesn’t live the frugal life. Comparing apples to oranges makes no sense. You would have to compare Trump to similar people.
Trump has brought a big yacht. He doesn’t live the frugal life.
This is true, and a good point. But your original point was:
Trump is a billionaire because he’s good at dealmaking which is a relevant skill for political campaigning.
Based on this discussion, it looks like Trump is not a billionaire because he is a good at dealmaking. He had multiple ways to become a billionaire (investing in index funds, investing in gold, dealmaking, inventing Facebook).
And as you now point out, he completely failed in utilizing the money; Trump is a billionaire because he was inefficient in finding good ways of exchanging his money for utility. Another area in which I would have outperformed him :-)
Based on this discussion, it looks like Trump is not a billionaire because he is a good at dealmaking. He had multiple ways to become a billionaire (investing in index funds, investing in gold, dealmaking, inventing Facebook).
Given the way he has chosen he wouldn’t be a billionaire if he was bad at dealmaking. It’s a relevant skill for winning political fights.
If you think that Trump just blabbers around what’s on his mind, you are massively misreading the situation.
It doesn’t follow that because he did worse than the optimal strategy his strategy wasn’t equally as optimal. It could be that the strategy he followed is as optimal as the other one, but is subject to chance and he got unlucky.
You can’t say “strategy A produced a better result than strategy B, therefore strategy A is a better strategy” based on a single example of someone using strategy A.
The real point, for me, is not so much “Trump could have done better by investing in index funds”, it’s “Trump’s business underperformed the market”.
And, yes, underperforming the market over 30 years or so isn’t proof of anything much; he could just have been unlucky. But for the exact same reasons, the fact that Trump’s a billionaire isn’t proof of anything much; he could just have been lucky. (He was: he inherited a lot.)
The only point I’m making is this: the fact that Trump is rich is not very good evidence that he’s a great deal-maker. He’s rich mostly because he inherited a fortune; someone who had inherited the same fortune and just put it into the stock market would now be richer than he is; what (admittedly limited) evidence we have of his business skill is that he’s done worse than the market over the last few decades.
He might still be a great deal-maker. Or he might be a pretty terrible one. All I’m saying is that I don’t see evidence that he’s particularly good.
You can’t say “strategy A produced a better result than strategy B, therefore strategy A is a better strategy” based on a single example of someone using strategy A.
You have your example backwards.
We have a case of many many people using strategy A (index funds), and a single example of strategy B (Trump). And you can say that the strategy that worked lots of times is a better bet than the one that failed once. Strategy A is better in the limited sense that given our current information, it looks safer.
I am assuming that investment in index funds is scalable and was therefore including in my sample all long term investors in index funds. If this strategy is not scalable, I withdraw my analysis.
The issue isn’t whether investment in index funds is scalable but whether investing in index funds is scalable.
I can’t imagine someone who has 1 billion dollars to simply put it into an index fund and do nothing with it and live life as if he wouldn’t have any money.
If you look at lottery winners most of them as relatively soon broken and without any money.
If a lottery winner has the same amount of money ten years later that shows good financial skills relative to other lottery winners.
There aren’t many billionaires, full stop. (A little under 2000.) And if someone (say) inherited $500M or earned it by building and selling a very successful business, and then put the money into index funds and waited for it to grow to $1B … I don’t think we’d say they became billionaires through index funds, we’d say they became billionaires by inheritance or by growing a business.
Trump became a billionaire by inheriting a fortune. The fortune he inherited was less than $1B, and it happens that the path he took from <$1B to >$1B involved running a business, but he could have invested his money conventionally and done just as well.
I would expect that few billionaires have their wealth invested conventionally, though. To get really rich you generally either need to do something exceptionally lucrative or inherit from someone who did. In the first case, (1) the chances are that you have a drive to keep doing exceptionally lucrative things and (2) you’re likely to think—with some justification—that having done so well for yourself you can do better by carrying on than by just investing and relying on other people’s success.
In the second case, the chances are that a lot of that inheritance is in the business that made your family rich. Again, if it’s been so successful you’re likely to think it better to keep most of your wealth in that.
That’s the same question you asked 5 comments upthread from this one. Apparently you found my answer unsatisfactory since you just asked (what I now understand to be) the exact same question again, but unless you care to indicate what was unsatisfactory about it I’m not sure what to say that I haven’t already.
Trump is a new problem. It can take time to figure out how to solve a new problem.
How were you expecting them to handle him?
You’re actually asking why they couldn’t handle him quickly. He may end up handled in the sense of not getting the nomination. It also seems as though it took Trump’s proposal to not let Muslims enter the US to really motivate the Republican heavyweights.
I don’t know how to reply to this thread as a whole, so I defaulted to this.
Like the Veiled Statue at Sais, I’m thinking this drama is revealing some truth about the US society and the US government. Some people recoil and want the veil restored, some want to see more and some don’t know what to do, but no one is neutral.
What does Game Theory suggest in this situation? Is a tie the best that can be done? I don’t think the “have you no decency?” retort will work here.
Also see DSM-IV, Narcissistic Personality Disorder, the first choice for any world leader according to Jerrold Post.
Game Theory assumes a defined set of players. In politics there are many different players each with different incentives and agenda’s.
I’m thinking this drama is revealing some truth about the US society and the US government.
It reveal that the US government is weak. Both the Republican side and the Democratic side with Berny Sanders.
We had three presidents from Yale in a row. Then in 2004 two people from the same Yale fraternity running against each other. In 2008 Obama from the university of Chicaco was elected president.
With Hilary the presidency might go back to Yale but otherwise there are many people with really different backgrounds.
People seem to be fessed up with politics as usual.
Yeah, I imagine having to choose between two former classmates, who are probably long-term buddies, can be demotivating. Even worse than the usual knowledge that most American presidents actually come from only a few “royal” families.
Voting for Trump or Sanders is another way to express “I want someone who does not belong to the old aristocracy”. The way the system is designed, if you don’t vote, it doesn’t matter; if you vote for a third party, unless you succeed to coordinate half of the population (rather difficult, if the media will push in the opposite direction), it still doesn’t matter… so the only way you are realistically allowed to rebel is to vote for the most eccentric candidate in the primaries.
Of recent presidents, only the Bushes were an established political family. Before the Bushes the most recent time a scion of a political family was in the White House was Kennedy.
Why can’t seasoned politicians handle a windbag millionaire?
Is it because he is a caricature of them?
A lot of problems that the establishment has been ignoring for decades, e.g., illegal immigration, out of control PC policing, pensions for government employees crowding out other spending, are starting to become critical and the seasoned politicians don’t know how to address these problems. In fact they probably can’t be addressed without upsetting established interests to whom the seasoned politicians are beholden to.
So we are locked into a stable, nowhere-near-optimum equilibrium. :(
It’s not stable. The problems I mentioned are getting worse.
Good point.
I don’t think it makes sense to call Trump a ‘windbag millionaire’. Trump is a billionaire because he’s good at dealmaking which is a relevant skill for political campaigning.
Offensively attacking Fox news and then having Fox news fold is an example of a political move that’s likely calculated and no other Republican candidate could have pulled of the same way.
Trump and other politicians of this session show that the model of political electioneering that is about polling and then saying whatever polls best isn’t the only one that works.
Through calling for the US to bomb Daesh’s oil industry Trump already achieved concrete policy changes of US policy. Trump isn’t stupid or uncalculated even when his public persona gives the impression that he’s uncalculated.
It’s not clear that that’s true. E.g., earlier this year someone asked the question: If Trump had just taken all his money in 1987 and put it in index funds rather than trying to grow it himself, what would have happened? The answer, apparently, is that he’d be about 3x richer than he is now.
The reason for picking 1987 is less than fully convincing, though, so it’s possible that there’s some misleading cherry-picking going on. This article, as well as quoting the other one, says that if he’d put his money in index funds in 1978 instead of 1987 he’d now be about twice as rich as he actually is. Trump apparently disputes both the “before” and “after” figures, but if instead we use his own figures for 1976 (why 1976? because that’s when we have figures from) he still ends up having underperformed the market.
So, I dunno, maybe he’s good at dealmaking, but it seems like the main reason he’s rich is that he inherited a fortune from his family. Everything he’s done since to grow his wealth could have been done at least about as well (and maybe much better) by just putting the money into the stock market.
That’s not a good comparison. There are many more people who inherited as much money and who haven’t increased their wealth.
But apart from pure numbers, if I observe Trump style of interaction with journalists who interview his looks to me a lot like Carl Icahn’s style. In both cases there an extreme amount of frame control that comes across as pretty rude.
That’s the kind of stuff that get’s Scotts Adams write gushing articles about Trump. I think that Scott Adams predictions are widely overconfident but I see what Scott Adams means when he speaks about Trumps language usage. Then I have had hypnosis training just as Scott Adams, so it can be that the patterns are otherwise hard to spot.
It suggests that Trump has been less successful, in terms of turning money into more money, than the average business in one of those index funds. The fact that individual investors often do even worse than that by investing badly is neither here nor there.
Most businesses do worse than the average business in one of those index funds. Individuals don’t maxmize for wealth. Trump has brought a big yacht. He doesn’t live the frugal life. Comparing apples to oranges makes no sense. You would have to compare Trump to similar people.
This is true, and a good point. But your original point was:
Based on this discussion, it looks like Trump is not a billionaire because he is a good at dealmaking. He had multiple ways to become a billionaire (investing in index funds, investing in gold, dealmaking, inventing Facebook).
And as you now point out, he completely failed in utilizing the money; Trump is a billionaire because he was inefficient in finding good ways of exchanging his money for utility. Another area in which I would have outperformed him :-)
Given the way he has chosen he wouldn’t be a billionaire if he was bad at dealmaking. It’s a relevant skill for winning political fights.
If you think that Trump just blabbers around what’s on his mind, you are massively misreading the situation.
It doesn’t follow that because he did worse than the optimal strategy his strategy wasn’t equally as optimal. It could be that the strategy he followed is as optimal as the other one, but is subject to chance and he got unlucky.
You can’t say “strategy A produced a better result than strategy B, therefore strategy A is a better strategy” based on a single example of someone using strategy A.
The real point, for me, is not so much “Trump could have done better by investing in index funds”, it’s “Trump’s business underperformed the market”.
And, yes, underperforming the market over 30 years or so isn’t proof of anything much; he could just have been unlucky. But for the exact same reasons, the fact that Trump’s a billionaire isn’t proof of anything much; he could just have been lucky. (He was: he inherited a lot.)
The only point I’m making is this: the fact that Trump is rich is not very good evidence that he’s a great deal-maker. He’s rich mostly because he inherited a fortune; someone who had inherited the same fortune and just put it into the stock market would now be richer than he is; what (admittedly limited) evidence we have of his business skill is that he’s done worse than the market over the last few decades.
He might still be a great deal-maker. Or he might be a pretty terrible one. All I’m saying is that I don’t see evidence that he’s particularly good.
You have your example backwards.
We have a case of many many people using strategy A (index funds), and a single example of strategy B (Trump). And you can say that the strategy that worked lots of times is a better bet than the one that failed once. Strategy A is better in the limited sense that given our current information, it looks safer.
Is that true? Are there many billionaires who became billionaires through having most of their money in index funds?
I am assuming that investment in index funds is scalable and was therefore including in my sample all long term investors in index funds. If this strategy is not scalable, I withdraw my analysis.
The issue isn’t whether investment in index funds is scalable but whether investing in index funds is scalable.
I can’t imagine someone who has 1 billion dollars to simply put it into an index fund and do nothing with it and live life as if he wouldn’t have any money.
If you look at lottery winners most of them as relatively soon broken and without any money. If a lottery winner has the same amount of money ten years later that shows good financial skills relative to other lottery winners.
There aren’t many billionaires, full stop. (A little under 2000.) And if someone (say) inherited $500M or earned it by building and selling a very successful business, and then put the money into index funds and waited for it to grow to $1B … I don’t think we’d say they became billionaires through index funds, we’d say they became billionaires by inheritance or by growing a business.
Trump became a billionaire by inheriting a fortune. The fortune he inherited was less than $1B, and it happens that the path he took from <$1B to >$1B involved running a business, but he could have invested his money conventionally and done just as well.
I would expect that few billionaires have their wealth invested conventionally, though. To get really rich you generally either need to do something exceptionally lucrative or inherit from someone who did. In the first case, (1) the chances are that you have a drive to keep doing exceptionally lucrative things and (2) you’re likely to think—with some justification—that having done so well for yourself you can do better by carrying on than by just investing and relying on other people’s success.
In the second case, the chances are that a lot of that inheritance is in the business that made your family rich. Again, if it’s been so successful you’re likely to think it better to keep most of your wealth in that.
For how many billionaire’s does that happen to be true?
If that’s true for nobody than comparing Trump to nobody doesn’t make much sense.
For how many billionaires does what happen to be true?
Became billioniares through having most of their assets in index funds.
That’s the same question you asked 5 comments upthread from this one. Apparently you found my answer unsatisfactory since you just asked (what I now understand to be) the exact same question again, but unless you care to indicate what was unsatisfactory about it I’m not sure what to say that I haven’t already.
Because a lot of people are tired of and disillusioned with seasoned politicians who they see as windbags on their way to becoming millionaires.
The usual explanation for Trump is that it’s a Rage Against the Machine thing.
Trump is a new problem. It can take time to figure out how to solve a new problem.
How were you expecting them to handle him?
You’re actually asking why they couldn’t handle him quickly. He may end up handled in the sense of not getting the nomination. It also seems as though it took Trump’s proposal to not let Muslims enter the US to really motivate the Republican heavyweights.
I don’t know how to reply to this thread as a whole, so I defaulted to this.
Like the Veiled Statue at Sais, I’m thinking this drama is revealing some truth about the US society and the US government. Some people recoil and want the veil restored, some want to see more and some don’t know what to do, but no one is neutral.
What does Game Theory suggest in this situation? Is a tie the best that can be done? I don’t think the “have you no decency?” retort will work here.
Also see DSM-IV, Narcissistic Personality Disorder, the first choice for any world leader according to Jerrold Post.
It’s a rerun.
Game Theory assumes a defined set of players. In politics there are many different players each with different incentives and agenda’s.
It reveal that the US government is weak. Both the Republican side and the Democratic side with Berny Sanders.
We had three presidents from Yale in a row. Then in 2004 two people from the same Yale fraternity running against each other. In 2008 Obama from the university of Chicaco was elected president. With Hilary the presidency might go back to Yale but otherwise there are many people with really different backgrounds.
People seem to be fessed up with politics as usual.
Yeah, I imagine having to choose between two former classmates, who are probably long-term buddies, can be demotivating. Even worse than the usual knowledge that most American presidents actually come from only a few “royal” families.
Voting for Trump or Sanders is another way to express “I want someone who does not belong to the old aristocracy”. The way the system is designed, if you don’t vote, it doesn’t matter; if you vote for a third party, unless you succeed to coordinate half of the population (rather difficult, if the media will push in the opposite direction), it still doesn’t matter… so the only way you are realistically allowed to rebel is to vote for the most eccentric candidate in the primaries.
Of recent presidents, only the Bushes were an established political family. Before the Bushes the most recent time a scion of a political family was in the White House was Kennedy.