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Opinion: Chasing Donald Trump is for morons and idealogues

President Donald Trump talks with reporters before departing

President Donald Trump talks with reporters before departing on Marine One for the Air Force Academy graduation ceremony on May 30, 2019, in Washington. Photo Credit: AP/Evan Vucci

One of the most important things I have learned recently is that the only people not embracing Alternative Facts are boneheads. This is because experts who are peddling “facts” just keep blowing it when it comes to making accurate predictions about what is happening on planet Earth. 

Not to be a downer, but the view from any $7 Uber ride piloted by a recent college graduate looks like this: a world that is a waking nightmare brought on by the plans of the Best and Brightest, whose parted hair and Brooks Brothers suits show up every night on the news.

This crew of Ivy League and liberal arts college experts makes up most financial institutions, senior congressional staffs and newsrooms, and is generally the same cohort that made the case for the Vietnam War, Hillary Clinton’s inevitable victory, hollowing-out the middle class by “efficiency,” and the disastrous belief that math formulas and central banks could tame the greed and systemic risk that exploded so astonishingly in 2008. 

These are not original thoughts. And to make my next point, I’ll again lean on someone else’s work. Author Pratik Chougule explains in his book “How to Make Money from Political Predictions” why subject matter experts are so bad at forecasting trends. 

According to Chougule, “Accurate forecasters — and those who consume their insights with open minds — assume the occupational hazards of defending analyses that contradict conventional, or at least favored wisdom.” Translation: American institutions don’t reward people who are right. They reward people who fit in. This is the chief complaint of most social justice movements — that minorities are denied due process and good paying jobs because they’re different. And as time goes by, it’s hard not to wonder if the same can be said of another historically marginalized group: people who actually know what they’re talking about.

It was for this reason that I followed Chougule into the dark recesses of political amorality. I became a political gambler — one of the thousands of Americans who wagers on the outcomes of elections, legislation and court cases through the website PredictIt. PredictIt functions like a stock market for political forecasters, as traders use their own money to make predictions about questions like whether or not Donald Trump will be impeached, or if a new NAFTA treaty will pass. It forces gamblers to nut-up to their opinions and put their money where their mouths are — and it does so in a dynamic marketplace, where the price of a prediction reflects the probability from 0-100 percent that an event will occur. (As a disclaimer, I run a blog called Star Spangled Gamblers, which PredictIt provides a small sponsorship for.) 

The motive behind political gambling is profit, but I come to it with a sense of nobility too. After all, if the experts at Harvard and The Wall Street Journal couldn’t spot the perils of a land war in Asia or credit default swaps built on shoddy mortgages, then why not test the Wisdom of the Crowd? Why not give Everyman a chance? Call it intellectual populism, replete with the sense of self-interest and greed that is, in a way, the juice that makes America go. And as it turns out, the PredictIt Everyman is damn good at what he does. He’s actually right about 70-80 percent of the time, according to early research. 

Here are a few times that PredictIt jumped the experts: traders never believed that that House Democrats would ditch Nancy Pelosi as their party leader, as was rumored in 2018. They predicted that Gen. John Kelly would be Trump’s secretary of Homeland Security days before the story broke; and by a slim margin, they favored Democrats to sweep the congressional seats at stake in Orange County, California, last November, which most pundits just labeled with the cop-out, “tossup.” More recently, they forecast Beto O’Rourke’s steep decline in the polls to the month. 

But, let’s not get too excited. PredictIt isn’t the Holy Grail of political forecasting. 

The Wisdom of the Crowd has its limits — and the biggest, baddest limit is President Donald Trump, whose erratic behavior regularly fleeces the sharpest traders. Right now, it’s happening as the Senate considers acting secretary of defense Patrick Shanahan for a full-time appointment to run the Pentagon. The five-month saga between ex-Secretary of Defense James Mattis’ resignation and acting secretary Shanahan’s nomination has produced five apocalyptic swings in gambling markets. Each of these jolts represents one moment, in one single Cabinet opening, where markets failed to anticipate the president — and I happen to think that that is important. 

First, traders failed to predict when Mattis would exit. They lost even bigger when Trump fired Mad Dog two months in advance of his planned departure. Markets swung back-and-forth for months as traders bit on rumors leaking out of the White House. People talked about the Goldwater-Nichols Act, which could let Shanahan serve indefinitely without Trump’s nomination. Others bit on leaks that mainstream politicians like former Sen. Jim Webb, D-Virginia, and Air Force Secretary Heather Wilson would get the permanent job — and they lost again when Trump denied the Webb story as “fake news,” and Wilson resigned unexpectedly, like many Trump officials before her. 

Finally, as Shanahan’s rise to power seemed like a done deal, the DoD inspector general announced an ethics probe into charges that Shanahan had allegedly shown favoritism to the F-15X fighter, built by Boeing, his former employer, at the expense of Lockheed’s F-35 Lightning, which is billions of dollars over budget and years behind schedule. It was an obvious red herring, the type of Hail Mary pass that Washington veterans know is common in defense contracting — a sore loser’s play. And that’s what the inspector general found in April, when it cleared Shanahan, who is finally President Trump’s nominee for secretary of defense.  

Now, traders are giving him a 90 percent chance of being confirmed, something that would be unthinkable in another administration, given that prominent senators, including Armed Services Committee Chairman Jim Inhofe of Oklahoma, have criticized his qualifications. But once again, President Trump outplayed his opponents and is getting his guy on the throne.

And that’s the lesson. Shanahan’s obscure confirmation battle is the place where the limits of predictive trading and industry expertise are laid bare — a gulf of volatility that neither Ivy League degrees nor the Wisdom of the Crowd can account for. It begins and ends at the White House, with Trump. 

Sure, the experts fail to anticipate Trump because most of them hate him. But the Wisdom of the Crowd fails for a more telling reason: volatility. Exactly how do you price risk on a president of contradictions? Stormy Daniels? A great economic expansion? A bitter social division? A fan boy press conference with Vladimir Putin? Followed by utterly savage sanctions against him? What rumor is too ridiculous to believe? Apparently, none. 

Many pundits have written about the media’s failure in this regard, but if my time trading political stock in Shanahan is telling, then the public isn’t doing much better. Either we’re all fools, or the one in charge is. It’s up to history to decide on that.

Alex Keeney is a TV writer and political consultant in Los Angeles. He is a former congressional staffer and founding editor of Star Spangled Gamblers. He wrote this for InsideSources.com.

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