The Most Important - and Largely Uncovered - Lesson from the New York Times' Article About How Trump Got His Wealth

This New York Times story about tax schemes used by the Trumps is a story of 3 things, only 2 covered by the media.
link:
https://www.nytimes.com/interactive/2018/10/02/us/politics/donald-trump-tax-schemes-fred-trump.html?smid=tw-nytimes&smtyp=cur

1. It clarifies how dependent Trump is on his father for his wealth. His father gave him over $400 million in various ways (Trump was a millionaire before he was out of grade school.) Trump is definitely not self-made and his net worth is not much different than what it would have been had he simply invested his life time of gifts into a stock index fund.

2. It itemizes the various ways the Trumps cheated to avoid taxes. A massive amount of tax. In one instance, they turned about $900 million worth of real estate into an estimated value of $40 million in order to avoid millions and millions and millions in tax.

All that the media covered. What they don't cover is item 3.

3. This is really a story about origins. Trump became who he is because he hasn't known normal consequences. The most succinct way to illustrate how his father covered his bet is this: Trump owed a bond payment on his failing casino in 1990. He did not have the money. Fred Trump - his dad - sent a trusted employee down to the casino to buy $3.5 million worth of chips simply to infuse Trump's business with enough cash to enable him to make the bond payment. (And even that was not enough; he also wrote a check that day to Donald for another $150,000.) Donald could take risks knowing that his father would cover that risk, do what he could to protect his favorite son. A pundit once quipped of George W. Bush that he was born on third base thinking that he hit a triple; Trump, by contrast, stands triumphant at the plate simply because his dad owns the stadium.

We teach our kids consequences. They learn that if they are rude to someone, they could lose them as a friend. They learn that if they spend all their money for the week by Wednesday they are penniless until Friday. We do things and sometimes good things follow and sometimes bad. We use that feedback to adjust who we are, to learn how to survive or even prosper within our world.

Trump never had to do that. His father protected him from normal feedback and thus normal learning. Trump never had to adapt to the world; he had money enough that it adapted to him. Here, from the story, is how Donald was raised:

By age 3, Mr. Trump was earning $200,000 a year in today’s dollars from his father’s empire. He was a millionaire by age 8. By the time he was 17, his father had given him part ownership of a 52-unit apartment building. Soon after Mr. Trump graduated from college, he was receiving the equivalent of $1 million a year from his father. The money increased with the years, to more than $5 million annually in his 40s and 50s.

For our purposes, the biggest problem with this is that it insulated Trump from normal consequences. He could be rude. He could be crude. He could spend money lavishly or invest it recklessly. And in the morning he would still have more income than 99% of the adults around him.

Fred Trump is now dead and gone. He's not around to cover his son's bad bets. Who now does? I think it is us, the American people. Donald has yet to suffer any negative consequences for anything he has said or done. We already do and we're not even done with the payments.

Maybe There is No Lesson

Someone had shared this recently:

Rule 3
"There are no mistakes, only lessons."

As is my tendency, I nodded silently. It made sense. Then, because of my tendency to over-think things (or as I like to call it, "thinking"), I thought we may too readily believe in the power of lessons.

Lessons make it sound like there is something we can carry forward from one experience to the next. Maybe the most profound experiences of life are too unique to be understood by anything that happened before or of anything to follow. They are not lessons for life. They are life. And all we have to guide us through them is our heart. And maybe that's enough.

What Did We Learn?

“What did we learn, Palmer?” Asks the senior CIA official of his subordinate.
“I don’t know sir.”
“I don’t f-ing know either.”
“I guess we learned not to do it again.”
“Yes sir.”
“F- if I know what we did.”
“Yes sir. It’s hard to say.”
Closing lines of Burn After Reading

George Bush and Dick Cheney are granting interviews. From what I can tell, they did nothing wrong - there is nothing that they would have changed.

Which essentially means that they didn't learn anything. They knew what to do going in and the experience (whether it be Iraq or Afghanistan or financial crisis or economic slump or ...) did not change their minds at all.

Given that things did not turn out so well, we can only conclude one thing: if it wasn't their minds that needed changing, it was the world. Oh wait. They already made that clear. You either change the feedback or the feedback changes you.

Look for Dick Cheney to be driving around in retirement in a motor home with a bumper sticker that reads, "I'd rather change the world than change my mind."

Amazing.

What Might Have Been

To enhance learning, humans and other moving things have the capacity not just to learn from what happened but what might have happened. Gambling plays on our tendency to over-estimate what might have happened, drawing us in to play again even when the odds are still against us.

My friend Rob's little brother came up from North Carolina to visit him for the weekend. As they bounced around on Saturday, Rob suddenly "noticed" that the Massachusetts lottery was worth tens of millions and suggested that they buy a ticket. The next morning, Rob got up before his brother, opened the Sunday paper to find the winning numbers, ran out to buy a ticket with exactly those numbers, swapped it out for the one they had purchased the day before, and then waited for his brother to wake up.

As his brother ate breakfast, he read through the paper. After awhile, Rob casually suggested that his brother grab the ticket and compare it to the winning numbers printed in the paper. As you might imagine, his little brother was, er, kind of excited about the fact they'd won millions. In fact, after Rob told him what he'd done, his little brother was still insistent that he really did have the winning ticket.

Printing lottery ticket winning numbers is, of course, necessary in order to find the winners. But it also encourages people to "learn" how close they came to matching the numbers. ("4! I had 5. I was so close!") It might just encourage people to play again, in spite of the terrible odds.

As it turns out, multivariate equations armed only with real data do a better job of diagnosing patients than doctors or even doctors armed with these same equations. One reason is that doctors too quickly converge on a diagnosis and tend to ignore contravening data. Perhaps another reason is that doctors too easily invoke what might have been (or, what could be) scenarios.

This is, it seems to me, one of the problems of learning from policy. Facts can be disregarded because people who are bought into a particular ideology are able to construct what-if scenarios that demonstrate - at least to them - how this could have gone well if only. Marxists are still gaining adherents in universities and neocons are still finding supporters for invasions in the Middle East (Iran instead of Iraq this time). Not because the empirical evidence has suggested that these are wise moves but, instead, because of a kind of imaginary nostalgia, reminiscing about what might have been.

One of the most promising things about voting for change is that it suggests doing away with nostalgia and beginning, instead, with data. I, for one, have my fingers crossed that we can get past reliance on silly superstitions and nostalgia, relying instead on data.

4 Change in Thinking - Learning

The difference between education and training? You'd send your daughter to a sex education class, but not a sex training class.

To create new learning - something needed in order to keep pace with new and changing environments - one needs experience and a theory. This kind of learning challenges and changes our existing categories, our existing ways of thinking. Traditional learning tends to conform to our existing categories. Systems thinking suggests a very new and different way to think about education.

Liberation Leadership

For me, the measure of progress is autonomy. People with cars are more advanced than people who only have shoes because people with cars have more choices about where to go and when. People who live in a democracy are more advanced than people who live under rule of a despot because they have more choice about how to live their lives.

If autonomy is the measure of progress, it suggests something about leadership. Peter Block once said that he saw leadership as a collusion between control freaks and the irresponsible. In my mind, genuine leadership shows people a way out - it instructs, inspires, and liberates a person to live life more fully. Great leadership should end at some point - leaving the person more free than when first led, more able to define and pursue a life of one's own choosing.

One of the many problems with most models of leadership is that they institutionalize leadership into a position. I think that leadership ought to be better thought of as a project - like parenting. Get the led to a particular point and then allow them their own lives. Employees, citizens, and believers all ought to reach a point of graduation, like students, after which they are expected to operate with what they have learned.

Leadership that does not have the goal of liberation is not leadership - it is control. Leadership creates choices, control constrains them.

Welcome Back to School! Here's Your Packet of Destructive Forces

Kids have been in school for weeks now. If this is their first time, they likely left home full of excitement, their eyes aglow with expectancy. Given it is mid-September, they may already be disillusioned with the experience, as is cce's darling daughter.

We all are born with intrinsic motivation. A baby doesn't need the reward of strained carrots to learn how to crawl or talk. In fact, at no stage of our life do we learn more quickly than at this one - transformed from nearly comatose bundle to bouncing, running, jabbering person in just a couple of years.


But intrinsic motivation is gradually destroyed by a series of destructive forces encountered at school and work. Children are given incentives to learn - gold stars and A's. Although there is no evidence that such incentives actually enhance learning, there is lots of evidence that such incentives dissuade children from learning. Short term, the inducement of a reward makes a child do more of the rewarded activity. Longer term, such inducements actually convince children that, sans inducements, this activity is not worth doing. (Imagine a child who spoke whenever his mother smiled and said, "Good boy! You can talk!" but talked only for such rewards. Presumably, we teach activities we'd like people to continue doing.) One thing that children learn is that learning is not worth doing for its own sake - a ludicrious conclusion akin to concluding that eating, sleeping, or hugging is not worth doing unless we're rewarded for it. Learning is intrinsic to being human and it takes an elaborate and medieval educational philosophy to change this.

Worse, grades and rankings in school further the damage. It has always been - and will always be - true that there are variations in intelligence, learning styles and the speed of learning in any group. Nothing we can do will end such variation. Bad managers latch onto this inevitability as if it matters - as if they can do something about it. They spend all their energy trying to codify rankings, tweaking the standings, focusing on who is excellent and who is merely good. Such effort is proof that they lack the simplest understanding of systems and human psychology. (Or, to be fair, are teachers or supervisors forced by their system to engage in these rituals that will someday be written about with the same disbelief we use to write about rain dances or drowning witches.) The more people focus on rewards and rankings, the less they focus on the tasks we're rewarding them for doing. Again, repeated studies have shown that such rankings make people less creative and result in lower quality work. People who are distracted do not do their best work.

Good managers understand that there will be variation but focus on the overall system. Sure, Ariela did better at math than Sam. So what. Look at the distribution for the entire class and look for ways to move that upwards. Maybe the introduction of new methods will move the curve upwards. (And if you use hands on methods instead of verbal ones, you may find that Sam is suddenly doing better than Ariela. Ranking is largely a function of method and task. Differ the methods or task and a very different ranking emerges.)

Great managers understand that tapping intrinsic motivation is much better than forcing extrinsic motivation.

If you have children forced into such a system, coach them through this. This is a game they have to play, but one that they should understand as a game with perverse rules. If you are a policy maker, work to lessen the insistence on grades, rankings, and even rewards. No matter who you are, read or listen to Alfie Kohn. (I'd recommend W. Edwards Deming but for all his genius, he was never terribly accessible.) Kohn has the audacity to actually point to research, rather than folk lore, and point out that the emperor of education has no clothes. Quite simply, research does not support current methods - a sorry fact that should could continue in no other domain but this: NASA, the Pentagon, the Federal Reserve, the EPA would never continue to get funding were they to so thumb their noses at empirical data. Alas, failures in methodology are merely blamed on the children who obviously are not trying hard enough.

Vouchers for Teachers

Advocates of vouchers define the education system as something that parents consume. In their minds, if parents were given vouchers that were equivalent to money and could "spend" these vouchers on the school they wanted their child to attend, schools would respond to demand for education like companies respond to market demand.

I'd argue that the parents are not the best decision-makers about how to shape schools: teachers are. In that light, perhaps we should set up a system in which teachers had the vouchers and could spend them as they wished. Imagine what it would be like.

Right now schools spend roughly $6,000 per student per year. Now, give that money to teachers. If they had, say, 20 students they'd get $120,000. But here's the catch. From that money, they'd have to lease or rent a building where they could teach, hire janitors for cleaning, hire administrators and assistants to help them, etc. Now, the entire administrative structure would be directed towards helping teachers to succeed. Rather than focus on pleasing the folks in Sacramento (or Little Rock or Albany), administrators would, of necessity, focus on helping teachers in the classroom. If the teacher(s) did not see any value in the school psychologist, teaching materials, or school principal, those entities would get no money. The ones that did help would receive money - perhaps even more than they do now.

In the spirit of full disclosure, I should say that I'm married to a teacher. The neighborhood she teaches in is lower income and she regularly brings home stories of her frustration with nonresponsive administrators or supposed helpers with teaching, cleaning, etc. It would be a very different matter if all these resources that were supposedly directed towards helping children learn were dependent on her for their funding. The level of responsiveness would have to go up.

One of the many advantages to this kind of system would be that you'd have the equivalent of about 6 million businesses (there are more than 6 million teachers in the US) all innovating and creating demand for high-value added resources and materials. What this would do to the level of innovation could be amazing.