Trump vs. a Japanese whale

The story of Akio Kashiwagi, drawn from Trump’s memoirs and news accounts from the day, offers a revealing window into Trump’s instincts. It shows that Trump isn’t just a one-time casino owner—he’s also a gambler, prone to impulsive, even reckless action. In The Art of the Comeback, published in 1997, Trump explains that until he met Kashiwagi, he saw himself as an investor who dealt only in facts and reason. But his duel with the great whale in action made him realize “that I had become a gambler, something I never thought I was.”
Perhaps just as important, when gambling failed him, Trump didn't quit: He doubled down. But he did it shrewdly, summoning a RAND Corporation mathematician to devise a plan that would maximize his chance of fleecing his Japanese guest.
And it worked. Kind of. In Trump’s recollection, which he shared for this story, his showdown with Kashiwagi was another one of his many great wins. Just don’t look too hard at the ledger.

A bizarre and nutty tale of the time Donald Trump hired a RAND Corp mathematician to try to win back money a Japanese gambler took from one of his hotels in a hot night of Baccarat.

Before reading the piece, I thought perhaps they had changed the rules of the game somehow to raise the house edge. But no, they just changed the terms under which Kahiwagi to play, counting on the house edge to manifest over the long run.

Behind the trademark bluster, however, Trump grew more calculated. Having looked in the mirror and seen a gambler, he reverted to careful strategy. Trump consulted Jess Marcum, a mathematical probabilities expert who co-founded the Rand Corporation—a government-affiliated think tank then better known for modeling nuclear war with the Soviet Union—on how to maximize his odds in a second showdown with Kashiwagi. Marcum knew the only way to compensate for the house’s very slight baccarat advantage, of just over one percent, was to keep the game going for as long as possible. Time was on Trump’s side.
So Marcum and an Atlantic City casino insider named Al Glasgow prepared a report for Trump proposing a “freeze out” agreement. Under the deal, Kashiwagi would bring $12 million to the table and play until he had either doubled it—or lost everything. Even with huge bets, that would take a long time. Marcum simulated the match in detailed hand written notes. Kashiwagi might surge ahead early, he estimated, but after 75 hours at the table – far longer than he had stayed the first time - his chances of winning would fall to 15 percent. The key was to prevent a repeat of Kashiwagi’s first visit, when he had walked out while ahead.
Kashiwagi, presumably fuzzier on the probabilities, agreed to the terms. There was no legal way to hold him to such a deal but Trump felt the men were honor-bound. “Gamblers are honorable, in their own way—at least about gambling,” he later wrote.

The peculiar thing about Trump is that, as offended as I am but so many of the things he says, I'm not convinced he actually believes half the things he spews with such gusto. Yes, he's a politician, and they're always churning out rhetoric for reasons of positioning, but Trump exceeds even other politicians in his commitment to artifice.

Because of that, when he says something I disagree with, I'm more offended by the casual way he tosses around such damaging ideas than the ideas themselves, and when he says something I agree with—which is, admittedly, rare—I don't give him much credit.

He needs no exaggeration to be rendered a caricature, because he has done it himself, both figuratively and literally, like one of those figures in Pinocchio who becomes the physical embodiment of its own hubris. If you were a cartoonist on assignment to lampoon him, you could just snap a photo and collect a full day's pay.

The false dichotomy of U.S. politics

The Trumpists are our equivalent of Britain’s U.K. Independence Party (UKIP) and France’s National Front, both anti-immigrant, nationalist parties. For the past five years, Trumpists have clocked in at about 20 percent of the electorate, if one tracks numbers of committed “Obama is a Muslim-ists.” This makes them even more powerful than Britain’s UKIP, which won 12.6 percent of the vote in May’s parliamentary election. These numbers put the Trumpists on par with the National Front in France, which in March elections took 25 percent of the vote to the 32 percent that went to the center-right party of Nicholas Sarkozy.

The critical difference between our nationalist faction and the European ones is that their parliamentary systems register them as “parties,” whereas our two-party model makes it harder to see that what we’re confronting truly is the rise of a new party. Provided, that is, the Republicans don’t sell their souls.

If the Republicans can hang on to the convictions that make them the party of Lincoln, we ought to see the party split. For the good of the country, we should hope for it.

Good piece on how the U.S. two-party political system masks the underlying fragmentation of our nation's political beliefs. The incumbent two-party system has been around so long that it has a massive fund-raising advantage over any third party, and that's just one element of inertia working in its favor.

From a voter perspective, a two-party system vastly restricts the granularity of your vote and what it communicates to politicians. It's as if you and a dozen of your work colleagues had to decide where to eat for lunch each day, but despite having dozens of restaurants in the area, could only go to one of two restaurants because there were only two cars available to drive.

The true preference of the group might be split among many more restaurants. It's even possible every person might want to go to a different restaurant that day. But instead you end up with one group at Chipotle, and the other at some salad bar, and tough luck if you're in the mood for Chinese or sushi or something else.

For a variety of historical reasons, and it's a fascinating tale, we've evolved to be a two party nation. And at this point, the structural inertia is significant and not likely to be easily overturned.

But the ability to map preferences at a more granular level is something technology can enable at a scale not possible in days past, and I suspect it will be technology that changes American politics in a deep way over the next two to three elections.

First we'll see an election where technology swings a few key races in a very public way. My guess is that the same social networks that enable many more people to become internet famous will allow those same people to sway a lot more voters by allowing them to endorse at scale. Second, some simple mobile app will solve the voter laziness and voter information asymmetry problems and allow them to more efficiently discover which candidates most closely represent their views.

It's amazing how hard it remains to research how to vote optimally based on your personal preferences. It's easier to find a hotel to stay at when visiting a new city, or the best Mexican restaurant in your neighborhood. Google is of surprisingly little help when it comes to researching your ballot, and so many of us end up in a dark voter stall, staring at a long list of names we've never heard of, trying to choose some local area judge or reading some long pro or con position on a local proposition. Frankly, the heuristics I've turned to when faced with choices like that are embarrassing.

Organizing large sets of information, offering customized searching and browsing of that information using algorithms, user preferences, and social network context, and bundling all of that in good user experience on a smartphone has been the technology industry's hammer of Thor in industry after industry for the past decade. Restaurants, retail, news, music, and travel are just a few examples to have felt the blow.

For a variety of reasons, industries like finance, health care, automobiles, and government have remained somewhat immune. But that's about to change, and I believe politics is going to be one of the most visible to succumb. The killer election mobile app is coming, and the only question is who will build it and whether it will come in time for the 2016 U.S. elections.

Fundamental to that shift is making public what has long been private. I'm referring to not just party preferences but people's thoughts on individual issues and races. What do people you admire think about the issues on the ballot in front of you, and why? If much of this is made public ahead of election day, then suddenly we have a new, more efficient way to debate the issues and understand how and why different voters are going with particular candidates. Making messaging public was the greatest innovation of Twitter, turning the conversations and soliloquies of people into public theater. Making voting intentions public would have as great a social impact.

We already live in a generation where people feel comfortable making their views on everything under the sun public online, so I can't imagine it's a stretch to do so on political issues. The only thing stopping us from aggregating and organizing this information efficiently has been a focused, directed service.

Money has long been a proxy for political influence, but let's say someone Internet famous carries their millions of followers from social media over into the political arena. For example, let's say Marc Andreessen makes his ballot for the upcoming election public, along with a list of his views on all the issues and where he agrees and disagrees with each candidate. Or imagine popular economist Tyler Cowen gives his views on all the random propositions on a ballot, explaining why he thinks they make sense or not. And so on down the line.

On some mobile app, you import all these people you follow on other social networks and have a ready-made ballot based on the collective views of all the people you trust. As the typical lazy American voter, you already feel more informed. If you want, you can tune your ballot by hand or take some simple survey on a variety of hot button issues to tweak your ballot. Now, ahead of the election, you publish that ballot to the app for anyone else, and more importantly the network itself, to see. People who follow you on other networks automatically follow you here, so now you can see whose votes you're influencing. You are, as on other social networks, both consumer and publisher.

Remember, this information is all made public ahead of the election, so the ripples actually begin long before election day. You're a candidate running for office, and you can go look at a list of the people with the most followers in your district. Suddenly, you realize that someone influencing a sizable bloc of voters in your district is choosing against you because of your view on some issue or proposition. The app offers a quick calculation of how many voters you might gain by changing your view to the other side. It could sway the election. You publicly change your view, and the app sends a notification to all the people who were going to vote against you, informing them of your policy shift.

That may sound a bit too precise, and perhaps that level of granularity isn't possible the first go round because the math isn't so clean. At the very least, though, you can imagine looking through the app to see the top influencers in your district and inviting them to a meeting or one of those fundraising dinners. Usually, a ticket to such an event comes at the cost of a sizable donation, but remember, fundraising and money have long been an indirect way of transacting in votes, but an app like this allows you to do so more directly.

Someone smarter than me can compute how dense a network like this needs to be in a region to be predictive, but if political polls based on random samples can be reasonably predictive, we may already be over the tipping point in many parts of the U.S.

Let's come full circle. This began as a discussion of the restrictive nature of a two-party system. A network like this could unlock the potential for a more granular set of options. A service like this might indicate that a candidate coming in with some mix of views from the left and right could capture a sizable voting bloc. That fabled third party could find a more efficient path to reaching that bloc through a set of influencers on the network who share a certain set of common views. But perhaps it's not just one additional party but multiple ones that find a path to relevance.

This is all jumping far ahead down the road, but it's not unreasonable to imagine how quickly change like this can come to a particular space in public life when you compare how we used to shop, search and browse information, find people to date, or navigate from one place to another just a decade or two ago.

We already probably have many more than two political parties in the U.S. Circling back to the piece I quoted at the beginning of this post, the author believes the Republican Party should split because it really consists of two distinct parties.

If we look to Europe, again, we can see the effects of these tools, not only on the right but also on the left. Progressive Internet activists in Germany, for instance, coalesced into the Pirate Party, which has been able to win seats in four state parliaments as well as the European parliament.

In other words, in this country, too, we would by now have Trumpists, libertarians and netizens in government, if we had a parliamentary system. But because we don’t, we have a very weird, historically important presidential campaign. The weirdness comes from the fact that it is unfolding inside the structure of our creaky, 19th-century two-party framework.

The real story, then, is not about this or that candidate but about precisely how the realignment of U.S. public opinion away from the two major political parties will shake out and about who or what the major parties will sell down the river while trying to save themselves as the “big tents” they need to be to win elections. And the burning question inside this story is whether our two-party system can survive the digital era. Or, perhaps better, how to ensure that it doesn’t so that we can save our center-right party, the Republicans, for the center.

Stock and flow of civil wars

In 2004, James D. Fearon, a political scientist at Stanford, published a study, “Why Do Some Civil Wars Last So Much Longer Than Others?,” in which he and a colleague analyzed scores of civil wars fought between 1945 and 1999. Some of the findings were intuitive: civil wars end quickly when one side has a decisive military advantage over the other; poor countries with natural resources to export often have long internal wars, because whoever controls the resources also controls the national treasury. Other findings were novel, such as the fact that wars following coups d’état tend to be short. In another study, “Ethnicity, Insurgency, and Civil War,” Fearon and the political scientist David D. Laitin discovered that even though in nations with exceptional ethnic pluralism, like Syria and Iraq, lines of conflict may be defined by ethnic identity, pluralism itself is not a notable predictor of civil war; poverty is a much more significant factor.
Rereading these works in light of the infuriating problem of the Islamic State, two discouraging findings stand out. In 1945, many civil wars were concluded after about two years. By 1999, they lasted, on average, about sixteen years. And conflicts in which a guerrilla group could finance itself—by selling contraband drug crops, or by smuggling oil—might go on for thirty or forty years. The Revolutionary Armed Forces of Colombia, or FARC, has been around since 1964, sustained in no small part by American cocaine consumption.

Steve Coll looks at the history of civil wars to try and shed light on how the war with ISIS might unfold. The last point in the passage is an easy one to forget when it comes to wars. At a very basic level, wars require some stock or resources from which to fund the flow of war. We speak of burn rates in technology, but in the context of war it has a much more serious meaning.

Asymmetry works in both directions here. On one hand, the industrialized nations of the world have asymmetric military power to deploy against entities like ISIS. On the other hand, ISIS and its equivalents have an asymmetric investment in the battle in that region. No industrialized nation has the appetite to stay in that region in the long run, and that only erodes with time.

From the American intervention in Somalia, in 1992, through the French intervention in Mali, in 2013, industrialized countries have been able to deploy ground forces to take guerrilla-held territory in about sixty days or less. The problem is that if they don’t then leave, to be replaced by more locally credible yet militarily able forces, they invite frustration, and risk unsustainable casualties and political if not military defeat. This has been true even when the guerrilla forces were weak: the Taliban possesses neither planes nor significant anti-aircraft missiles, yet it has fought the United States to a stalemate, and the advantage is now shifting in its favor.
If President Obama ordered the Marines into urgent action, they could be waving flags of liberation in Raqqa by New Year’s. But, after taking the region, killing scores of ISIS commanders as well as Syrian civilians, and flushing surviving fighters and international recruits into the broken, ungoverned cities of Syria and Iraq’s Sunni heartland, then what? Without political coöperation from Bashar al-Assad, Russia, Iran, Hezbollah, Iraqi Shiite militias, Turkey, the Al Qaeda ally Al Nusra, Saudi Arabia, the Gulf States, and others, the Marines (and the French or NATO allies that might assist them) would soon become targets for a mind-bogglingly diverse array of opponents.

"Show me a hero, and I'll write you a tragedy"

Eric Posner believes American fear of Syrian refugees can be explained by factors other than bigotry and nativism.

Psychologists who have studied these reactions have identified a number of factors that predict when people place excessive weight on a low risk. All of these factors point, with remarkable clarity, to the reaction to the Syrian refugee crisis.
People underestimate risks that are familiar, under their personal control, voluntarily incurred, ignored by the media, and well-understood. Driving an automobile is the best example. Everyone is accustomed to driving, feels in control of the car, and drives by choice. The extraordinarily high risk of an accident becomes background noise that no one pays attention to. By contrast, the opposite qualities are true for the risks that people fear the most, like meltdowns of nuclear reactors, airplane crashes, and cancer-causing food additives—and even more so for terrorism. The Syrian refugees are strangers from an unfamiliar and terrifying part of the world, and they will be placed in neighborhoods where people did not necessarily invite them in. The media has made much of them, particularly after the Paris attacks, and most Americans don’t understand the circumstances that drove them from their country.
People also overreact to risks that may produce especially dreaded or gruesome outcomes. While a car accident can produce mangled bodies, a terrorist attack is an especially gruesome event, often involving hostage-taking and terrifying helplessness. Terrorist attacks victimize children as well as adults, and there is no practical way to avoid them. People are more likely to tolerate risks when the accompanying benefits are clear—that’s why, in the end, people fly. But any benefits from refugee resettlement are remote, intangible, and indirect. People also fear risks of human origin (vaccines) more than risks of natural origin (the flu), and terrorism is very much the fruit of human ingenuity.

Until we have a way to bypass human emotion and augment our statistical reasoning, fighting irrational fears of the public will continue to feel like so much noble thrashing.

I just finished David Simon and Bill Zorzi's Show Me a Hero, a look at the attempt to desegregate Yonkers, and it felt like a mini season of The Wire, on a different subject. That should sound like high praise because it is.

The miniseries illuminates how racism is not merely a subset of what Posner identifies as irrational fear. Having experienced various forms of racism in my youth, I've encountered many a strain that seems to arise not from fear but a desire for dominance. It isn't a creature lashing out in defense or fear but but a monster on the offensive.

Opening borders to migrants

“European countries are turning into old people’s homes. In 2050, I plan on being 80. Either I’ll be cared for by a robot or by a Syrian”

Simon Kuper writes a manifesto on why Europe should welcome migrants.

1. We need young workers
Many European countries are gradually turning into old people’s homes. Germany, Italy, Spain and others have some of the lowest birth rates in human history. About one-third of their populations will be aged over 65 in 2050, predicts the Pew Research Center in the US. Germany needs to import at least 350,000 people a year to keep its workforce stable, calculates the German foundation Bertelsmann Stiftung. No wonder Angela Merkel has been more welcoming than David Cameron, whose country is younger. But all over Europe, carers for old people are already scarce. Norway found oil under the seabed but it would have been better off if it had discovered 50,000 nurses there instead. In 2050, I plan on being 80. Either I’ll be cared for by a robot or by a Syrian.
2. We have enough space for migrants
Many rightwingers think we have reached our limits. “KEEP OUT, BRITAIN IS FULL UP”, said a fairly typical front page in the Daily Express newspaper in 2009. This feeling is widespread. And it’s true that western Europe is one of the most densely populated regions on earth. Indeed, density has long been Europe’s unique selling point: with so many people of different nations closely packed together, we have always traded goods and exchanged ideas fast. 
But we have plenty more room. Many European cities aren’t dense enough. Places such as Brussels, Dublin and others sprawled during the automobile era. We can make space for newcomers through densification, says Stephanie Wunder, senior fellow of the Ecologic Institute in Berlin.

Many of the same points could be made for the U.S., and many other countries in the world.


For example, when Trump says he is worth $10 billion, which causes his critics to say he is worth far less (but still billions) he is making all of us “think past the sale.” The sale he wants to make is “Remember that Donald Trump is a successful business person managing a vast empire mostly of his own making.” The exact amount of his wealth is irrelevant. 
When a car salesperson trained in persuasion asks if you prefer the red Honda Civic or the Blue one, that is a trick called making you “think past the sale” and the idea is to make you engage on the question of color as if you have already decided to buy the car. That is Persuasion 101 and I have seen no one in the media point it out when Trump does it.
The $10 billion estimate Trump uses for his own net worth is also an “anchor” in your mind. That’s another classic negotiation/persuasion method. I remember the $10 billion estimate because it is big and round and a bit outrageous. And he keeps repeating it because repetition is persuasion too. 
I don’t remember the smaller estimates of Trump’s wealth that critics provided. But I certainly remember the $10 billion estimate from Trump himself. Thanks to this disparity in my memory, my mind automatically floats toward Trump’s anchor of $10 billion being my reality. That is classic persuasion. And I would be amazed if any of this is an accident. Remember, Trump literally wrote the book on this stuff.

From Scott Adams (yes, of Dilbert fame) on the clown genius Donald Trump and how he's quite cleverly using verbal jiu-jitsu to turn his critics' attacks to his favor. A Republican card of Trump and Mark Cuban would be like something out of a satire novel and cause the media to swallow itself. Adams think it would win the election.

James Surowiecki on Trump and why he's won over working-class Republican voters:

Working-class voters face stagnant wages and diminished job prospects, and a 2014 poll found that seventy-four per cent of them think “the U.S. economic system generally favors the wealthy.” Why on earth would they support a billionaire?
Part of the answer is Trump’s nativist and populist rhetoric. But his wealth is giving him a boost, too. The Democratic pollster Stanley Greenberg, who’s published reams of work on white working-class attitudes, told me, “There is no bigger problem for these voters than the corruption of the political system. They think big companies are buying influence, while average people are blocked out.” Trump’s riches allow him to portray himself as someone who can’t be bought, and his competitors as slaves to their donors. (Ross Perot pioneered this tactic during the 1992 campaign.) “I don’t give a shit about lobbyists,” Trump proclaimed at an event in May. And his willingness to talk about issues that other candidates are shying away from, like immigration and trade, reinforces the message that money makes him free.
Trump has also succeeded in presenting himself as a self-made man, who has flourished thanks to deal-making savvy. In fact, Trump was born into money, and his first great real-estate success—the transformation of New York’s Commodore Hotel into the Grand Hyatt—was enabled by a tax abatement worth hundreds of millions of dollars. Yet many voters see Trump as someone who embodies the American dream of making your own fortune. And that dream remains surprisingly potent: in a 2011 Pew survey, hard work and personal drive (not luck or family connections) were the factors respondents cited most frequently to explain why people got ahead. Even Trump’s unabashed revelling in his wealth works to his benefit, since it makes him seem like an ordinary guy who can’t get over how cool it is to be rich.

The 2016 Republican roster

But a direct comparison with the last Republican primary, in 2012, reveals how strong this bunch of candidates is for the 2016 nomination. And the comparison is surprisingly direct: For most of the 2012 candidates, 2016 has offered a stronger, better-prepared, and more qualified rough equivalent.
Jeb Bush, for instance, is more or less Mitt Romney — a respected, technocratic, big-money Republican governor from a gentler decade. Except Bush was actually a conservative at the time, and so he doesn’t find himself painfully rewriting his history or groveling to a movement he used to scorn.

Interesting observation by Ben Smith at Buzzfeed on the 2016 slate of Republican candidates. The meta point is that Democrats shouldn't make the mistake of thinking 2016 will be a replay of Obama vs. a Republican joke.

Beyond that, the analogies get a little thin. Trump is a singular figure, a product of the New York tabloids with no 2012 equivalent, though Newt Gingrich, with more will than rationale, filled some of the same space, as did Bachmann. Rick Perry 2.0 appears to be pretty much Rick Perry. Mike Huckabee becomes a somewhat weaker candidate every cycle, as his demographic ages out and his charm wears thin. Santorum 2.0 is a poor man’s Santorum 1.0. And Marco Rubio’s generational campaign has no 2012 equivalent.
But don’t be fooled into thinking that this is a weak field, or that most of these candidates would get run over by the Clinton juggernaut. The Democrats are plodding toward the nomination of the sort of solid establishment candidate John McCain was in 2008 for Republicans. The Republicans onstage tonight represent a generation of their party’s stars.

Good luck being born tomorrow

97% of people born tomorrow will be in a country that is authoritarian, communist, doesn’t support same sex marriage, does not allow abortion, supports capital punishment or has seen over ten thousand deaths in recent armed conflicts. Good luck!

From part 1 of 2 of Good Luck Being Born Tomorrow which includes some. The statistics within are eye opening.

The meat is in part 2.

300 million years ago, a supercontinent called Pangaea was formed, that later broke apart into continents that we inhabit today. Modern technology has turned the world back into Pangaea – a world where everything is connected. You can have a live video call with someone across the world in seconds (you’re welcome!) or you can find yourself on the next continent in 10 hours if the need be. Yet we’ve built these imaginary borders around us that limit human potential. These borders are a direct result of historic military conflict. And allowing your fate to be determined by things that took place before your birth feels like accepting defeat before you even get started.
This all brings me to the third option of what to do when the environment is not favorable – you can change it! As weird as it sounds, one of the means to cause change is actually also to migrate (for those who already have that freedom). As opposed to a slow democratic process of giving your marginal vote every four years in the hope of changing something you care about, you can vote with your feet already today. You have a choice between expressing your needs at a popularity contest twice a decade or putting constant pressure on places.
Not only will you find yourself in a place where your problem is already fixed (remember – that’s why you moved!), you’re also putting real budget pressure on the old place by taking your taxes elsewhere (will hurt every month). With enough people doing that, the competition for taxes forces incumbent states to fix their environments.
In positive political theory, this is described as the Tiebout hypothesis.

Living in the Silicon Valley media bubble, with its insatiable need to produce some minimum volume of news coverage every day, can lead to a surplus of technology naysaying in one's diet. I believe it's a useful corrective to have sites like Gawker and Valleywag and that ilk of gadfly to point out when the emperor has no clothes, even if the level of trolling is on the high side.

Still, climb up to higher vantage point and it's hard to disagree that technology is perhaps the greatest hope for lifting the standard of living for the most number of people in the world, whether directly or indirectly.

Yes, the tech industry has its problems, and it has its share of ridiculous douchebags, some of them with absurd amounts of wealth. And yes, perhaps some of our technology is too addictive, and maybe it is transforming some of us into intolerable social-network-preening narcissists.

Visit other parts of the world, though, and see what a life-changing event it is to get a cell phone and internet access. Observe people making a living selling goods on social networks, or watch people coordinate protests against authoritarian governments, and on and on. I'll continue to take the bad with the good for the net gain to society.

It’s not hard to imagine the invention of blockchain (the core of Bitcoin) having remarkable implications in the developing world through enabling micro-transactions and possibly helping eliminate corruption through blockchain based electronic voting. There’s stuff coming that we haven’t even thought of yet.
Technological innovation is finally making it possible to meet the assumptions of the Tiebout model (mobile consumers, complete information, abundant choices, telecommuting etc.). Bringing transparency into the world of basic freedoms, taxes, government services, public goods and reducing the cost/pain associated with moving will be the way to give us a future, where every nation state will have to compete for every citizen. Can you imagine that world?