Dalio’s Questions (1/3)

Surya,

You and I share deep admiration for hedge-fund billionaire Ray Dalio. Speaking for myself, I think he is a genius. His ideas about radical honesty and transparency, especially, have had a profound impact on my thinking.

Today, Dalio waded into the Trump debate. As usual, his comments were thoughtful and thought-provoking. In his post, he asked three important questions. For fun, I thought we could each take a turn answering them and then have a discussion afterward.

Here’s the relevant excerpt:

It seems to me people who are trying to figure out whether or not to support him [President Trump] are faced with three big questions: 1) what exactly is the part he’s trying to optimize for (e.g., American manufacturing workers) and at the expense of whom, 2) am I more aligned with that part he is trying to protect (e.g., American manufacturing workers) or more aligned with those who will lose out (e.g., immigrants, those who will lose benefits from his budget changes), and 3) will his path of conflict rather than cooperation be effective or harmful?

Sometimes conflict produces better results and sometimes it produces worse results for the people who are pursuing it to get what they want. For example, if Donald Trump were optimizing for his own well-being through conflict, it’s entirely possible that he would undermine his own well-being because the retaliation could be more damaging to him than the cooperation.

I should note that this line is cute: “People who are trying to figure out whether or not to support him.” As if such people exist! I almost believe Dalio is undecided. But everyone else? For supporters, as Trump once said, he could shoot someone and they would support him. For haters, Trump’s tweet about someone shooting someone is grounds for immediate impeachment.

Moving on, here are my answers to Dalio’s questions:

1) What exactly is the part he’s trying to optimize for (e.g., American manufacturing workers) and at the expense of whom?

People make fun of the fact that President Trump tends to communicate at a grade-school level — which makes it amusing that a genius such as Dalio is having trouble understanding him. “MAGA!” “Jobs! Jobs! Jobs!” Trump is not complicated. He is trying to optimize for American capitalism and employment at the expense of government and foreigners. Of course, there is a valid argument that his policies will do no such thing. But what he’s trying to do is pretty clear.

2) Am I more aligned with that part he is trying to protect (e.g., American manufacturing workers) or more aligned with those who will lose out (e.g., immigrants, those who will lose benefits from his budget changes).

I’m a patriotic Libertarian, so … That said, I would like to hear examples of people who will lose out that might interest a Libertarian patriot. For instance, are tech companies — the pillars of American capitalism these days — so dependent on immigrants that citizens can’t fill their demand? Otherwise, if it’s immigrants lose, natives win — or government loses, capitalism wins — my alignment is easy to determine. Sorry, immigrants.

3) Will his path of conflict rather than cooperation be effective or harmful?

This is the toughest question because it also begs a bevy of tough questions: Is cooperation possible (i.e. would the Opposition ever allow it)? Is cooperation what the people who elected Trump want? (Or, for that matter, what Clinton or Bernie supporters would have wanted?) Is cooperation even possible in the political climate of the last few decades?

I also admire Dalio’s honesty in the face of his admitted bias. He writes: “Sometimes conflict produces better results and sometimes it produces worse results for the people who are pursuing it to get what they want.” That, to me, is another great question that is begged. Can conflict be a path to cooperation (as in a tough negotiation)?

Finally, I think this third question could be a clever trick. Dalio may be trying to sort the intellectually honest from the intellectual frauds. A partisan would quickly give an answer one way or the other. But a truly wise person, no matter his/her partisan instincts, would admit that the question cannot be answered. Let’s just start with the fact that no one has ever done it like President Trump is doing it. Could his methods be more effective than any methods before? Absolutely. Could they be hugely destructive? Absolutely.

I appreciate Dalio for making me realize that most people sharing opinions about this question, including me, really have no clue and should be more honest about their lack of knowledge and confidence in the outcome of President Trump’s actions.

Jordan