Tuesday Sep 22

Money Matters: The Covidian Gamble

I don’t know much about gambling because my mother, at a roadside stop in Nevada in the early ‘50s, offered to put a nickel from my sparse allowance into the slot machine. It came up with a cherry, a dollar sign, and something else, and produced nothing. At 4 or 5, I didn’t understand, except that the damn thing took my money. After my tantrum, it was easy to avoid such crises in the future — this didn’t mean I didn’t take risks, calculated risks, some of which worked and others that did not. But gamble? That meant going against the house that made the odds and always favored itself. Why would one do that?

I know there are many who DO engage in this heady game, but the few I know who engage regularly are those with means above, well above, most. The risks they take are not with a big part of their net worth (as I did with my nickel), but with some de minimus “rounding error” that doesn’t really hurt them to lose, even though the amounts may be large or even huge for normal people.

Donald Trump, despite claims of being self-made, was a coddled rich kid worth million even as a child. For him to gamble in business as he often did meant that he was playing with pocket change, relative to his family wealth, and, as has been documented time and time again, his daddy bailed him out. Even when he dove into the shark-filled waters of the casino business, dad came out of nowhere and bailed him out. But of course, even that business went broke eventually in a way that with some fancy lawyering enabled him to stiff his lenders, his workers, and his suppliers and contractors — all while generating structured losses he was able to use for years to avoid income taxes.

The guy is an addicted gambler, and a serial loser.

He even lost the bet that he would lose the election while garnering massive free publicity that would have been extraordinarily beneficial to his growing hotels and branding businesses. Instead, he won. What we’ve seen since is this serially failed self-promoter engage in governance-by-gambling and, until Covid-19, pretty much come out even. He bet his endorsement would shepherd even the bizarre candidacy of Roy Moore in Alabama which he lost. He bet building the wall with US not Mexican funds would stoke his base and won. He bet that he could keep campaigning non-stop with weekly rallies, and his base loved it. He bet that Fox News would follow him no matter how much he lied about science, history, or economics, and they did. He also bet that equating white supremacists and civil rights advocates as “good people on both sides” and lost. It’s been a mixed bag with bets large and small. But now his BIG bet is going to be tested. Big time.

Trump is betting that he can turn science into a partisan issue, and that doing so will result in an improved economy by election time in six months, soon enough to shift tough polling numbers in his favor. He’s betting that the virus will diminish over the summer and render advocacy for “reopening” the economy the smart move. He’s betting that people will overlook whatever the true mortality rate is for Covid-19 because employment rates will return to pre-outbreak levels by fall. He’s betting that voter suppression combined with most opting for mail-in ballots, where available, will benefit his conservative base. And he’s betting that those GOP governors who’ve not implemented social distancing measures will be vindicated by a virus that peters out this summer.

To be honest, he may win this bet. No one, least of all scientists and epidemiologists, can predict anything at this point. But we do know some things. In the famous 1918 “Spanish Flu” outbreak (which started in the Midwest, not Spain, by the way), social distancing was the one way its spread was controlled. (See The Great Influenza by John Barry). The 1918 experience, by the way, holds Trump’s worst nightmare: a second wave of pandemic in the fall which with THAT virus occurred with a vengeance.

But if he loses this bet and it turns out that opening things up early accelerates Covid-19’s spread and hits the GOP base hard in the Midwest and South, along with rural counties everywhere, one can imagine two extreme outcomes, one bad and one positive, neither of which are likely, but both of which help define the enormous range of possibilities we face as this election creeps up on us.

The bad outcome would be if Trump and his allies decide that they are likely to come up short in November, and, with nothing to lose, abandon all tradition and reason and go full-on authoritarian — canceling the election, enforcing martial law, punishing the free press, and all sorts of hard-to-imagine things. As he said about the now disproven benefit of anti-malarial drugs, the manufacturer of which he openly owns a slice of, “What do you have to lose?” He could even use the gun-rights militants either as enforcers, or as a threat providing an excuse to militarize policing functions. With our current Attorney General, who is to say either wouldn’t be given a green light?

The positive outcome is at the opposite end of the spectrum. As fall approaches, the Trump base erodes, MAGA enthusiasm wanes, and his pressers become boring attempts to distract that fail to find traction. With no rallies, and ongoing challenges with facts, Fox begins to fade as well. No debates are held, voting absentee becomes largely the norm, and Senate races start to bend toward the Dems. Finally, Covid-19 produces a set of government-centric, progressive policies rivaling the New Deal built around worker rights, universal health access, infrastructure spending, and the building of resilient supply chains for national security (including pandemic) needs. It won’t be called the Green New Deal, but virtually every element in that pie-in-the-sky aspiration will find its place embedded in a blossoming of American innovation, a resurgence of the “commons”, and a sense of national unity.

DRUMMOND PIKE, a frequent Organizers’ Forum participant and contributor to these pages, was the founder and CEO of Tides in San Francisco, and continues to be involved in philanthropy and social change.


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