Computer technologists quite literally make the best capitalists and by that I mean the most evil and destructive capitalists on the planet.
Originally shared by David Taubner
…In fact, Mercer was the third-largest Republican donor ($25.5 million) in the 2016 presidential race. In the New Yorker profile, a “high-level Renaissance employee” is quoted as saying, “Bob thinks the less government the better. He’s happy if people don’t trust the government. And if the president’s a bozo? He’s fine with that. He wants it all to fall down.”
…I asked Magerman if he was the anonymous employee behind the quote. He said he couldn’t remember saying it, but it certainly sounded like something he would say.
…Of course it does. One of Magerman’s cautions about “instant billionaires” is that they really don’t understand what the government is for. They didn’t get rich by providing the goods, services and infrastructure that bring people into direct contact with their community and its interests — they got rich in financial markets, making money for the sake of it.
…Bannon was fired from his perch at the top of Breitbart News, where Rebekah Mercer is a shareholder.
‘If the world knew what [Mercer] was trying to do, they wouldn’t stand for it.’
“People weren’t aware of what was going on [in 2016]. It looked like some eccentric billionaire was giving money to political causes the way people normally do,” Magerman said. “I knew that he was actually trying to do something different than that.”
Mercer’s fortune and Bannon’s media instincts combined with a shared ideology to produce the anti-liberal, anti-Clinton ecosystem that includes Breitbart, the conservative non-profit Citizens United, the book Clinton Cash and much more. Together, they oversaw the data analysis company Cambridge Analytica, whose impact on the UK’s Brexit referendum and the 2016 U.S. election remain troublesomely murky.
For a long time, even Magerman didn’t know about Mercer’s political interests or his ultra-libertarian, minimalist-government goals.
“…When I read all that, I felt not only did I have to do something,” Magerman said, “but I’d been negligent in not doing something earlier.”
“…The ultra-wealthy of today differ from the ultra-wealthy in past eras in that they have, a lot of them, no stake in the infrastructure of society,” Magerman said. He’s seen that their wealth does not depend on the health and stability of the country. In fact, they get rich on volatility and instability.
Organizations that track who spends money in politics have noted the same thing. Sarah Bryner, research director at the Washington-based Center for Responsive Politics, said “hedge fund wealth is a sort of recent phenomenon, at least in the campaign finance world.”
“It’s not like you’re working for [big banks such as ] Chase or Wells Fargo, in a very well-regulated and huge industry” with obvious policy aims.
High net worth individuals aren’t like that at all, she said. “With Mercer, we don’t really know much about why he’s getting involved.”
Mercer’s company, Renaissance Technologies, employs a select group of people who are seemingly capable of making money from nothing.
Mercer is not a finance guy; he is a computer scientist. But his research developing speech translation programs through pattern recognition can apparently also be used to discover obscure patterns in the financial markets and make an enormous fortune — as he and his team have done.
Renaissance became what some believe is the greatest hedge fund ever by looking down its nose at the methods of people actually trained in finance.
Renaissance is made up of people like Mercer and Magerman — trained in computer science, physics, mathematics and statistics. Instead of poring over prospectuses and profit and loss statements, they apply their sciences to the data that affect markets. It’s called quantitative analysis, and they themselves are known as “quants.”
The truly awesome money machine at Renaissance is a private fund called Medallion, which is only open to Renaissance employees. According to a Bloomberg report, “Medallion has pumped out annualized returns of almost 80 per cent a year, before fees.” Even in a bad year, it churns out more than 20 per cent returns.
“The people I worked with were great scientists. I mean, we could have solved a lot of important and interesting problems if we’d worked on different things. Instead, we made hundreds of millions of dollars,” said Magerman. He then added with a rueful chuckle, “Whatever.”
The Medallion investing formula is secret. “Everything I learned, everything I built, I can’t talk about it, I can’t publish it. I can’t share my knowledge with other people. As a scientist, I’ve really done nothing.”
But in the course of our conversations, Magerman made a provocative observation: The problem that Renaissance Technologies faced trying to predict market behaviour is, he said, essentially the same problem that Cambridge Analytica faces in voter analysis and persuasion.
Data analysts are largely skeptical that Cambridge Analytica could have had a decisive impact on the 2016 U.S. election or the Brexit referendum, but Magerman brushes that off with a reminder that so-called experts were also skeptical that computer algorithms could predict financial markets.
“They said there is no way they can do that with the data available,” he said. And yet, there’s Medallion, with its unheard-of nearly 80 per cent annualized returns. There’s Cambridge Analytica, on the winning side of two political upsets.
And there is Mercer, a brilliant scientist at the helm of both companies.
* * *
In January 2017, before Trump’s inauguration, Magerman called Mercer to chat about politics and the new administration. He wanted to persuade Mercer to withdraw support from Trump.
They talked about Obamacare and the social safety net and disagreed about Trump’s positions on those issues. Then, Magerman says Mercer made a series of comments on U.S. society:
The United States began to go in the wrong direction after the passage of the Civil Rights Act in the 1960s;
African-Americans were doing fine in the late ‘50s and early ‘60s before The Civil Rights Act;
The Civil Rights Act “infantilized” African Americans by making them dependent on government and removing any incentive to work;
The only racist people remaining in the U.S. are black; and
White people have no racial animus toward African-Americans anymore, and if there is any, it’s not something the government should be concerned with.
Magerman felt he couldn’t keep that to himself.
“I really thought I was just going to let people know what I know and that would be the end of it,” Magerman said of his decision to do an interview with the Wall Street Journal, which amounted to a warning flare about Mercer to anyone paying attention.
The story quoted Magerman saying that Mercer has contempt for the social safety net and that he now wants to use the money Magerman helped him make to “shrink government to the size of a pinhead.”
But the most sensational part was what Magerman relayed that Mercer had said to him on the phone one day. “I hear you’re going around saying I’m a white supremacist. That’s ridiculous.”
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