They are the smartest guys in the room and can make billions of dollars with arcane trades that no one else will notice. So why are some of the top minds in business and investing so ignorant about politics?
Billionaire investor Bill Ackman is currently inviting reviewers to critique the rationale for his 2024 voting plan. Ackman joins Elon Musk, Peter Thiel, Marc Andreessen and many other 1 percenters in publicly supporting Republican candidate Donald Trump in this year’s election.
There’s nothing wrong with that! However, while conveniently ignoring multiple analyzes predicting higher inflation, wider budget deficits, and lower GDP growth under the Trump administration than under the administration of Democratic rival Vice President Kamala Harris, Trump It’s a different story if you support Trump because you think he’s better for the economy. .
On October 11, Mr. Ackman, a hedge fund manager who made much of his wealth through corporate activities, published a lengthy social media post listing 33 reasons why he supports Mr. Trump. These are exactly why he opposes Joe Biden, Kamala Harris, and the Democratic Party in general, and Ackman said his 33 points are “if our most aggressive adversary wants to destroy America from within.” These are actions and policies that are likely to be implemented in the future.”
Before getting into Ackman’s list, it’s worth first outlining some basic tenets of American politics that I think are relevant.
What politicians say and what they do are different. This is not a Democratic or Republican issue. It’s a feature of the American political system. Sometimes politicians just lie. But sometimes they tell me what to do with a giant asterisk that says, “If elected with a filibuster-proof partisan majority, all of my legislative priorities will pass.” Sometimes I get it.
That rarely happens. 1979 was the last time one party could pass legislation without worrying about the Senate filibuster. Even a simple majority in both chambers can make it difficult for the president to pass legislation he likes. Biden’s “Build Back Better” plan failed in 2022, even though his Democrats controlled both chambers of Congress. This is how politicians always explain the failure of campaign promises they knew would never come true. In other words, the other person is getting in the way.
The president is not the same as the mayor. Party politics vary widely at the city, state, and federal levels. Liberal and conservative politicians sometimes push their policies further in smaller jurisdictions that lean heavily in one direction or the other, such as liberal San Francisco or conservative Oklahoma City. The president, who represents the nation as a whole, faces greater pressure to move toward the center.
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The radical wing of the party usually doesn’t run things. Presidential candidates typically pay lip service to the most radical members of their party, keeping them in their “base.” However, the far left and far right of each party typically support policies that are unpopular with the general public, and a president who governs too closely to the margins will likely see his approval ratings collapse.
Ackman items
Now, let’s talk about Ackman’s list and its flaws. Among other things, he equates some of the Democrats’ most fringe antics in the nation’s most liberal districts with the far more pragmatic Biden-Harris administration. He takes old campaign promises at face value and doesn’t do a quick reality check to see if they actually happened. He also applied a logic test to Biden and Harris that Trump would also fail.
On Ackman’s list of 33 points, points 5, 6, 10, and 16, for example, would decriminalize shoplifting and other misdemeanors, condone disruptive protests, and “defund the police.” He is referring to the efforts of the local Democratic Party. These are best understood as experimental and largely unsuccessful policy ideas that some local Democrats tried, especially after the 2020 killing of George Floyd and the legitimate protests against police brutality. . These ideas have no traction at the national level.
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Ackman is essentially trying to tie Harris to the stupidest ideas in the most liberal parts of the country.
In item 7, Ackman expressed concern about efforts to “limit and/or seek to limit or ban hydraulic fracturing,” an innovative fossil fuel drilling technology that has led to a surge in U.S. oil and natural gas production. I am doing it. When Mr. Ackman is scrutinizing a company he plans to invest in (or against), he probably reads the CEO’s relevant statements, and then goes a step further to find out if the CEO actually did what he set out to do. I would check to see if.
In 2019, Biden said he wanted to “end fossil fuels.” Around the same time, Harris supported a ban on hydraulic fracturing. They have been in charge for almost 4 years now. Did they do it?
Not even close.
Oil and gas production has hit record highs under the Biden administration, and Biden himself wants and has tacitly encouraged lower gas prices. This is a classic example of candidates telling one faction of their party what they want to hear, while actually leaving it more or less to the market to decide.
Mr. Ackman’s biggest bugs (items 11, 12, 20, and 21) are similar to the elite universities that have tolerated anti-Israel protests since the Hamas terrorist attack on Israel on October 7, 2023. It seems like a small number of fringe Democrats. Again, this is due to Mr. Biden, who is far more popular there than in his home country due to his fervent support for Israel, and the refusal to allow prominent speaking engagements by Palestinian Americans at the Democratic convention in August. This is not Mr. Harris, who came under fire.
Meanwhile, what the Biden administration has done is fill Israeli warehouses with weapons and join Israel’s defense during two Iranian airstrikes and help shoot down drones and missiles. Biden is currently sending valuable anti-missile systems to Israel, as well as U.S. troops to deploy them.
Isn’t that enough, Bill?
Ackman let out a little laugh. He reprimanded Biden’s officials for allegedly covering up Biden’s declining “cognitive health” (item 24), but it seems clear that Trump, his subordinate, is suffering from cognitive decline. He doesn’t seem to realize that he looks like a person. Ms. Harris released her medical records on October 12, but Mr. Trump refused to release them.
In item 2, Ackman complains about Biden policies that have increased the national debt. Someone should tell him that Mr. Harris’ plan is only $3.5 trillion, but Mr. Trump’s plan will add another $7.5 trillion.
Musk, Thiel, Andreessen
Other billionaire supporters of Trump are less detailed about their affinity for him. But they provide many clues. The trio of tech brothers Musk, Thiel, and Andreessen are cranky “techno-optimists” who want to bulldoze laws, rules, and social accommodations out of the way in order to accelerate the apotheosis of smart machines. Trump is a high-tech troglodyte with a 1970s mindset, which the tech oligarchs may see as an advantage. Mr. Trump’s lack of tech education makes him easy to manipulate by anyone who gains his trust. Trump’s pick for vice president, J.D. Vance, is a Thiel protégé with ties to other Trumpers in Silicon Valley, making Vance a conduit for tech optimists to influence Trump. There is a possibility.
Musk is fully committed to President Trump, hoping that he will run the Government Efficiency Commission during President Trump’s second term. What a fool’s errand that would be! Yes, the federal government is huge and inefficient. But that’s because Congress wants it that way. Every government agency and department represents turf, budget, and financial power to some Congressional committees and their members who are unwilling to let Musk or reformers expand their reach. Many people have tried it. No one has succeeded.
The tech oligarchs could likely persuade President Trump to follow their lead on important issues such as deregulation of technology and cryptocurrencies. But are they ready for the backlash? When industry has too much power, people yell and someone has to pay, even if the federal government is complacent. State attorneys general often take the lead when the federal government is silent, as they do with Big Tobacco, opioid suppliers, and some tech companies such as TikTok.
The reality of President Harris is that she is not the communist, anarchic, liberal president that her worst critics imagine. It will mostly be a continuation of the status quo, which isn’t such a bad thing. Inflation is nearly back to normal, the stock market is at record highs, gas costs a manageable $3.20 for Ackman’s minivan, and there are no signs of a recession.
The reality under President Trump is that there will be more trade wars. Because one of the things President Trump can do without Congress is raise tariffs as much as he wants. He can and has vowed to try mass deportation efforts without Congress. Goldman Sachs and many other forecasters say these two Trump policies alone will result in higher inflation and lower GDP growth than under the Harris administration.
If you’re a millionaire, you might not care too much.
Rick Newman is a senior columnist at Yahoo Finance. Follow @rickjnewman on X.
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