You Don't Have to Love Donald Trump to Hate the Experts
"If you are good, 49 percent of your decisions will be wrong. Even if you are great, something just short of a majority will be losers." Those are the words of Nick Kokonas. Though he's best known modernly for his wildly successful business partnership with Chef extraordinaire Grant Achatz (Alinea, Next, The Aviary), Kokonas was referring to his earlier career as a trader at the Chicago Merc. Even the best traders are wrong nearly as often as they're right.
Interesting about Kokonas's recollection is that the world's top venture capitalists would give anything to have the batting average of great traders. Their failure rate is quite a bit higher than 49 percent. As Peter Thiel noted in his 2014 book Zero to One, "most venture-backed companies don't IPO or get acquired; most fail, usually soon after they start."
The observations of Kokonas and Thiel rate extensive thought in light of a recent op-ed by Catherine Rampell in the Washington Post. As Rampell somewhat condescendingly put it, a subset of Americans has "had enough of experts, facts, math data." According to the expert-reverent Rampell, "This rising cynicism, sown recklessly by opportunistic politicians, will not only make it increasingly difficult for policymakers to make good choices and govern peacefully; it could also become a significant economic challenge."
What might this challenge be? Rampell believes that dismissal of experts and their economic data could beget what she terms a "self-fulfilling," and quite negative economic result. As the economic commentator in Rampell presumes, "If enough people and businesses believe the economy is secretly terrible, they will behave in ways that make it terrible - by curbing their own spending and hiring, for example." There Rampell reveals her own confusion about how economies work, while also exposing why many are so skeptical about the musings of the so-called policy experts and their enablers in Rampell.
Indeed, missed by the columnist is that saving in no way subtracts from consumption. Not only does saving redound to the economic health of the very individuals who make up any economy, it's also true that unless savers are quite literally stuffing their money under mattresses, their savings are being accessed by others with near-term consumptive needs. Banks don't pay for deposits only to stare at the money. They lend it out. Immediately. Importantly, the story doesn't end there, and the fact that it doesn't explains why economic slowdowns, when left alone, are self-correcting.
Similarly missed by Rampell is that the cars, tractors, computers, mobile phones, WiFi connects and all manner of other desirable goods that have exponentially boosted our productivity (and by extension, our consumptive power) were all the fruits of savings. Without savings we'd be living in caves. Consumption is the easy part. What's most crucial to economic growth is what people don't consume. There are quite simply no entrepreneurs, no companies, and no jobs without savings first. Applied to the skepticism about government statistics that Rampell deems economically harmful, if it's true that it drives thrift on the part of Donald Trump worshipers (Rampell notes that Trump supporters are disproportionately skeptical of government data), the overall economy benefits.
Speaking of Trump. Rampell plainly has a problem with him. So do I. It's merely a speculation, but in a competition with Rampell to express all the fork-in-the-eye, economy-sapping foolishness of Trump's policy ideas on trade and immigration, it's says here the writer whom you're reading now would win in a walk. But it's not just a Trump problem. For a mildly sentient being to hear the economic ideas of his opponent in Hillary Clinton is to similarly be more than a bit horrified. And that's the point. One needn't venerate either one of these deplorables to have a healthy dislike of the so-called experts eager to create policy that we all must live under. Notable here is Trump shuns experts and has bad ideas, while Clinton embraces them but similarly has bad ideas. Of course, this is what Rampell misses in her rage about the rage against the experts.
Many Americans don't despise experts as much as they're revolting against expert errors authored by the federal government, and that the U.S. must suffer in total. "Experts" in the Kennedy and Johnson administrations decided that the doings in Vietnam were crucial to the safety of Americans thousands of miles away. 59,000 American soldiers paid with their lives for this mistake made by the alleged "best and brightest." Fast forward to the 2000s, similarly wise members of the Bush administration decided that democratization of a dysfunctional Middle East was once again essential to the wellbeing of the American people. To err is human, but when governments do their mistakes tragically involve body counts at times.
And despite the historical truth that business failure has been a sign of capitalistic health and evolution (nearly 2,000 carmakers died in the early 20th century, exponentially more internet companies died when the 21st century dawned), supposed economic experts in the Bush administration pursued bailouts of errant banks and carmakers on the way to an economic "crisis" that had little to do with finance, and lots to do with government meddling in what was healthy. George W. Bush's successor in Barack Obama, having learned all the wrong lessons from Bush's errors, decided that his experts could centrally plan an all new healthcare market. How's that one working out?
Back to the private sector, it's pregnant with experts failing with great regularity. Google is a grand success, but less known are the countless would-be Googles that died in start-up mode. Amazon's Jeff Bezos yearns for successes so that his company can fund exponentially more ideas that will mostly fail. The late Steve Jobs is remembered for his brilliant successes, but anyone with passable knowledge of Jobs' career is well aware of the many failures (Lisa anyone?) that he launched on the way to commerce-changing success. Yet as all three examples remind us, private sector errors are contained within the companies from which they emerge. When Amazon errs, its mistakes aren't felt in Akron, OH.
And there lies the problem with the self-proclaimed policy experts whom Rampell urges the American people to admire in the way that she does. Sorry, but it's not happening. While private sector mistakes are limited in the collateral damage sense, policy errors are increasingly national, and realistically, international. True disdain for experts (or just government in general) is rooted in the proper fear that Trump's horrid trade-policy ideas would greatly weaken the global economy, and potentially cause wars of the shooting variety. This expert and/or government disdain extends to Clinton given her view that we'll all be better off if billions more are siphoned from the rich. With those funds, Clinton's policy experts will proceed to design the inevitable national policy mistakes that will be felt far and wide. Rampell might occasionally consider the unseen. She might contemplate how much better off we'll all be if those billions are instead directed to entrepreneurs and businesses on the way to information-producing failure that will eventually lead to commercial advances that will employ us alongside massive surges in our overall life quality.
In short, Rampell misses the point. The revolt inside the electorate isn't anti-expert as much as it's anti those awful expert policy decisions that we all invariably suffer. Failure is a given in the world in which we live. More and more Americans would quite simply prefer to leave the majority of those failures to the private sector where mistakes are contained, as opposed to them being nationalized by the policymakers whom Rampell oddly venerates.
