Trump and the Scammer’s Economy

“Now look at them yo-yo’s that’s the way you do it/You play the guitar on the MTV/That ain’t workin’ that’s the way you do it/Money for nothin’ and chicks for free/Now that ain’t workin’ that’s the way you do it/Lemme tell ya them guys ain’t dumb/Maybe get a blister on your little finger/Maybe get a blister on your thumb”-Dire Straits “Money for Nothing”

Burt Likko had a go about how Donald Trump appears to a certain demographic. Dr. Saunders launched into a critique of Trump as well. Now it is time for me to launch into Trump. I think Trump represents everything that is bad about American capitalism and American business. Or maybe Capitalism and business in general. Whenever I think of Donald Trump, I get the strong sense that the American economy is filled with a never-ending amount of fraudsters, scammers, and confidence people trying to defraud each people out of money in the name of profit.

Donald Trump is not a good business man but he has done a remarkably good job of convincing large swaths of the American public that he is a titan of industry and development. As Burt noted, he is an unrepentant blowhard and this appeals to a certain part of the American ID. I don’t know why but there is something about Trump that makes lots of people think “This is how a titan of business should act, like an unrepentant asshole with flash and panache.”

The problem is that Trump’s assholeness has caused him a lot of problems in losing business. His recent tirades against Mexicans do not seem to have helped his businesses. He has also filed for corporate bankruptcy four times and still appears in the public eye as a business genius.

Yet people still think Trump is a business genius as the lawsuits of Trump University reveal. Trump University seemed to work a lot like Scientology. People were given an initial free seminar but told that the real secrets came at the next level with required paying money. This was repeated until students paid 35,000 for the Trump Elite Package. The whole thing was a massive fraud though. Vox writes: “Schneiderman’s investigation found that most of the curriculum came from an unnamed “third-party company that creates and develops materials for an array of motivational speakers and seminar and timeshare rental companies.” Students didn’t meet Trump, but they did get the opportunity to take a photo with a life-size cardboard cutout of him.” Schneiderman is the New York Attorney General.

There are lots of rich and successful people who are probably more ruthless than their outward public appearances. Warren Buffet appeals to people as an unpretentious and unshowy Midwesterner but Berkshire Hathaway owns companies with shady business practices. Bill Gates was probably ruthless in selling Microsoft even though he appears as a loveable and unassuming nerd in public. Steve Jobs was no one’s idea of a nice person.

What Trump seems to appeal to is the idea that the best way to get rich in the United States is by scamming people and he seems to be damned good at it. My anti-libertarianism is not so much out of anti-Capitalist stances. I believe in the profit incentive but more because I worry that in an unregulated economy, you will just see more and more examples of fraud and scamming file into the economy without any means of redress. I suspect that a more unregulated economy will produce more stories like this or this.

I’ve mentioned before that I am not a Caveat Emptor kind of guy. I like the idea of a society and economy where the buyer knows what they are getting without fear of fraud or malfunction. I also think that there is a role for government from protecting people who can’t do the research from being duped. Trump seems to be the living embodiment of scamming and frauding. I suppose there is some cosmic justice in people falling for the Trump University scheme because they were potentially hoping for a way to get rich quick.

Now I admit that there is a problem that someone’s idea of a fraud can be very subjective. I find that most 100 percent commission jobs are suspect but there are also people who can really thrive and be successful in those positions. I am an unrepentant believer in plaintiff’s law but others would call me am ambulance chaser and fraudster. I am also suspicious of Multi-Tiered Marketing Schemes but others seem to think that they are a good deal (last link is audio). So it can be very tricky to impossible to tell what a business is a fraud and when we should let people take the risk.

What is it about the American economy (or maybe economy) in general that seems to create so many get rich quick schemes? I might be snobby against places like Olive Garden or sometimes critical of businesses like Uber for their labor practices but I don’t think they are trying to defraud anyone. They are offering a valid business service in exchange for cash whether it is standardized food across the nation or transportation at the click of an app.

One theory I have is that it is about access and income/wealth inequality. There is a small sliver of the American public that seems to get access to jobs with great salaries right away. They tend to already be upper-middle class or above and they are educated at schools that are the elite of the elite. The path seems to be go to Harvard, Yale, Princeton, or Stanford, get a job on Wall Street or for a Consulting company at 22 for 120K or so. Then you go to business school, work on Wall Street or in Consulting again and then slink into middle management for 250K or so by the time you are in your early 30s. There are minor variants for law or medicine or tech but these positions also tend to go to the best of the best.

The rest of us generally need to work much harder to get to those levels. There is nothing wrong with this but the United States is very good at filling the media with the brass ring stories. We are not so good at filling the media and public awareness with stories of someone who started at 30 or 40 K but was making a six-figure salary by their 40s or 50s. This variant of success is far more common but my anecdotal experience makes me feel like people feel it is becoming more and more rare to be successful this way. I see and read and hear a lot of people despairing that the American economy is going into two paths. One where people are successful right away and always climb up and one where you are always on the bottom rung and struggling to pay back loans while constantly being underpaid and overworked.

So maybe Trump appeals to people who always worry about being bottom rung. Maybe it is better to try and fail really big than make a slow and steady climb especially if you think that a slow and steady climb is impossible.

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34 thoughts on “Trump and the Scammer’s Economy

  1. Here is a NH focus group that digs the heck out of His Trumpness.

    http://www.bloomberg.com/politics/articles/2015-07-30/new-hampshire-voters-explain-the-appeal-of-donald-trump

    Lots of interesting things. Some of it is mostly pedantic in that they think they tend to conflate “The Truth” with their opinion. The lady who said she wants to feel proud of America again….why do you hate the us lady????

    But most pertinent to this post are the people who think he is self made man or a business genius. I’m guessing they don’t know about his bankruptcies or inability to run casinos, which are pretty close to licenses to print money, successfully. And a lot of it is just style. They like a brash loudmouth. He attacks, he is aggresive.

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      • Yeah. I for one am glad to have many thoughts i don’t express until i’ve thought about them for a while and even then many go straight into the mental bin. No mental filter is much more of a handicap then a boon, but thats just me.

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        • It used to be that some people could get away with not having a filter between their thoughts and their words. Now they resent the fact that they have to have one on pain of suffering fairly severe social consequences. In some way, Trump’s “daring” utterances make them feel like at least someone is saying things that needed to be said but which everyone was too polite to.

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          • Except all the things Trumpy is saying are things other pols and media have been saying. He didn’t invent saying nasty things about mexican immigrants. Hell Steve King has said worse and he is in congress. Nothing he is saying is particularly new although it is on the harsher side. He isn’t breaking any ground.

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            • The way I understand it, Trump is being far more explicit. People used to tiptoe around these sentiments by using dog-whistles, innuendo etc to say some mildly racist thing which everyone “knew” referred to an extremely racist thing. People nevertheless resented the fact that they had to have some kind of plausible (ok not really that plausible) deniability. Trump just out and out calls them rapists.

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            • He’s breaking ground in the sense that nobody running for President of These Here United States *with* ‘frontrunner’ status has used this rhetoric. Yeah, Steve King, but any moron can get elected to Congress, and most do.

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    • The one thing I will say is that there seems to be a lot of stuff in left rhetoric that can theoretically make a person feel like all decisions are losing decisions.

      “White flight” and the suburbs were considered bad for decades but now gentrification is bad because it is pricing minorities out their neighborhoods. So what are people supposed to do? Stay in the suburbs, move to the city, both, neither?

      But a lot of conservatives do feel hyper-sensitive at even the slightest notion that the United States is history is less than perfect.

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      • , a lot of leftist rhetoric in it’s social justice form seems remarkably similar to Christians talking about the original sin. From what I understand of Christian theology, eating the fruit of the tree of knowledge of good and evil put an an inherent mark on all human souls that is passed down from generation to generation. All by accepting Jesus Christ as your lord and savior can you remove this mark from your soul and be less evil if not entirely good.

        Social justice rhetoric has a similar feeling. From the American context, the original sin is racism and is a mark on the soul of all White Americans, especially if your man. The only way to repent is to accept the full teaching of the social justice movement and be less evil but you can never, ever truly be good. A lot of people are naturally going to through their hands at this and say why bother. Making people feel naturally bad about things they can’t control does not seem like a winning strategy.

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      • First off, false dichotomy.

        Second off, “gentrification” can take many forms and isn’t always inherently bad.

        Third, well-to-do white folks living in the city doesn’t necessarily contribute to gentrification (though I suppose now I’m just diving deeper into my first point above).

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  2. My anti-libertarianism is not so much out of anti-Capitalist stances. I believe in the profit incentive but more because I worry that in an unregulated economy, you will just see more and more examples of fraud and scamming file into the economy without any means of redress. I suspect that a more unregulated economy will produce more stories like this or this.

    There is the makings of a meme here: Criticizes the “unregulated economy…” chooses examples from two of the most regulated sectors of the economy.

    Saul, you not anti-libertarian. You’re anti what the folks at Slate and LGM and etc. tell you that libertarianism is. For all you attempts to criticize libertarianism, I’ve never seen you legitimately wrestle with what libertarians are actually saying. If you really want to deal with some particular point of view, go to the primary sources.

    And there is nothing remotely ideological about Donald Trump (I suspect that is part of his populist appeal). He was a Democrat who palled around with the Clintons when it suited him. And now that some segment of the GOP base is enjoying his clown show, he’s happy to call himself a Republican.

    Also,

    The path seems to be go to Harvard, Yale, Princeton, or Stanford, get a job on Wall Street or for a Consulting company at 22 for 120K or so. Then you go to business school, work on Wall Street or in Consulting again and then slink into middle management for 250K or so by the time you are in your early 30s.

    You’re pulling these numbers out of your backside. It took me two minutes on Google to narrow down a range for starting salaries at Goldman Sachs and McKinsey, around $70k, with the potential for more in bonus. That’s a lot of money, but it ain’t $120k and when you do the hourly wage, it starts to look a lot like what the median college grad from a good school makes.

    More importantly, what does any of this have to do with Donald Trump? What’s the connection?

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    • even you have to admit that stealing from extreme libertarians is just as much fun as stealing from drug dealers…
      I mean, really, what are they going to do? Complain?

      More normal Libertarians have a good perspective on things, but they fail to apply it where it counts. By missing the mud for the trees, they lose a lot of the power of their approach.

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      • (Of course, drug dealers, like many or perhaps eventually all criminals, when given to provide justifications for what they do, will rest on “extreme libertarian” justifications. “Extreme libertarianism” and “extreme anarchism” are nearly synonymous, and tend to converge with “brute anarchy,” “dog eat dog,” “state of nature,” and “sociopathy” – if in the last instance paradoxically, since, among other things, the extreme or perfectly self-consistent libertarian might view individualism to the point of sociopathy, or the rejection of moral responsibility to others, as the highest form of moral responsibility to others. To be fully for you, I must be fully for your freedom. To be fully for your, I must not interfere with your free self-development. To be fully for you, I must ignore you, etc. I emphasize extreme, but the consideration of the extreme may reveal contradictions that work to undermine the credibility of the more moderate form.)

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        • The consideration of the extreme version of any view works to undermine the more moderate form only if the moderate version limits itself to moderateness only by appealing to either some ad-hoc considerations (i.e. it is unsystematic), or to principles that would undermine even the moderate version as well (incoherent). On a more coherent and systematic theory, the extreme version need not be a logical consequence of the foundational principles. The mere fact that it bears some resemblance to the moderate version is no reason to reject the moderate version.

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    • I’m not sure if those numbers include bonuses and commissions, and I’d also wager they vary based on location. But $120,000 in total compensation out of college for a job with Goldman, et al in Manhattan is fairly typicall from what I’ve been told – the bonuses are an abnormally large portion of salary on Wall Street and they aren’t reflected in base salary numbers. Here’s some further evidence: http://www.glassdoor.com/Salary/Goldman-Sachs-Analyst-New-York-City-Salaries-EJI_IE2800.0,13_KO14,21_IL.22,35_IM615.htm

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      • That is average analyst salary, meaning that it includes more than just entry level salaries. So, yes, someone can get an ibanking job at Goldman and be making $120k, including bonus, within three years, but there is nothing typical about that. Those are the very top performers out of an already very narrow sliver of the financial services labor market.

        But the real point remains, what the heck does this have to do with Donald Trump or libertarianism or the so-called scam economy. The scams that Trump perpetrates are of an entirely different sort than the scams that banks carry out.

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  3. Trump is an example of what many people in the US despise about the “meritocracy” of our culture. Start on third base, trip over your shoelaces on the way to home and still end up getting a ticker-tape parade. The problem with the elite and the children of the elite is that they can never fail in the way an average person will, falling into real financial hardship and strife. At their worst they dead-end in their 50’s in a middle-upper management sinecure making 10-20x what a hard-working Joe makes and retire to the rubber chicken circuit to do charity work or golf into oblivion. CEOs burn companies down and get offered millions to leave and millions more to do it to another company. And then they run for office.

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  4. Trump is good at branding, and he has worked his way into his own brand.
    So has Snoop Dogg, but Snoop is a lot less bs.

    The way I call it, I would a lot rather have Snoop Dogg as the front-runner for the GOP.
    But that’s just me.

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  5. As Burt noted, he is an unrepentant blowhard and this appeals to a certain part of the American ID.

    Well, I don’t know about the Freudian part, but I DO think that lots of people are drawn to guys like Trump for a very simple reason: what they secretly wish for, more than anything else, is enough power and money to not only get away with treating people like shit doing and saying whatever the eff they want, but to be revered by others for having power and money enough to get away with treating people like shit doing and saying whatever the eff they want.

    It’s a weird calculus, no doubt. Strange, but not uncommon.

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  6. Saul,
    Where you write of capitalism, you need to put it in quotes, cause we ain’t got that here in the states. Not for a long time. What we’ve got is corporatism. That, in part, is why everything is so f’ed up.

    “Donald Trump is not a good business man but he has done a remarkably good job of convincing large swaths of the American public that he is a titan of industry and development. ” I’d say, Trump has been very good at convincing INVESTORS to loan him money for his ventures. In that he’s been smart, because when one of them crumbles, he declares bankruptcy and walks away. Convincing multiple groups of investors to repeatedly loan him money speaks volumes, about him and the investors. Frankly, given his track record, investors should be leery of him. That’s not scamming. If I convince you to buy a car out of your financial means, I’m not scamming you, I’m selling you. If you’re foolish enough to do it, well, you can’t fix stupid.

    God love Trump. He’s interjected the most fun into a presidential campaign I’ve seen in decades.

    “We are not so good at filling the media and public awareness with stories of someone who started at 30 or 40 K but was making a six-figure salary by their 40s or 50s. ” That’s because that tale isn’t “sexy”. Same as the “if it bleeds, it leads” stick….because it’s true. No one gives a damn about a story like that.

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    • I think that Saul was talking about in terms of starting salary, benefits, and extra options. Many lawyers, investment bankers, and doctors might work very long hours but they can start with a high starting salary and investment options. More than a few of them might also have trust funds and pre-job trainings or at least graduate with little or no debt. if your starting with a high salary, low debt, and at least some savings gotten from older relatives than it is easier to get rich than if you start with a low salary, high debt, and no savings.

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      • What percentage of the population fits that criteria? How many lawyers or doctors finish their degrees with zero debt?

        How many 22-year-olds have six-figure starting salaries (including bonuses)?

        Do these people exist? Sure. But they are so rare that to draw any conclusion from their existence is pretty silly.

        Will some people have an easier time striking it rich? Undeniably. Will some of these people be so situated because of factors entirely out of their control? Absolutely. There is a real conversation that should be had around privilege and the extent to which one’s success is attributable to the person in question and how much of it resides elsewhere. Unfortunately, I do not see Saul attempting to engage in that conversation. Instead it seems that he sees people more successful than he and wants to rail against that under the guise of addressing a Real Social Issue. And what is particularly sad is that Saul is far more like those people in terms of the factors that are out of their control than he is different from them.

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