Reclusive U.S. billionaire Robert Mercer
helped Donald Trump win the
presidency. But what is his ultimate goal?
Bannon’s relationship with Robert Mercer is cited in a remarkable lawsuit brought by David Magerman, a former employee of Mercer’s hedge fund, Renaissance Technologies. On its surface, the lawsuit is a wrongful dismissal complaint against Mercer. But at its heart, it is an indictment of Mercer’s character and reputation that draws together his political views, his connections to Bannon and Trump and racist comments Mercer allegedly made to Magerman directly... “I have a lot of respect for Bob Mercer. I think he’s a very intelligent person, a very thoughtful person,” Magerman told me recently. But he quickly added, “If the world knew what he was trying to do, they wouldn’t stand for it.”.. He’s fond of talking about the time, years ago, when a colleague he was visiting summoned a helicopter to his estate to whisk them into Manhattan.
There was no life-or-death reason for the extravagance, not even a business emergency. They were just going to a dinner, he says, and his friend rented the chopper to avoid the bother of traffic. From the helicopter, Magerman saw his fellow citizens travelling along a thin ribbon of perfectly good highway below.
.. “Either you are in awe of the grandeur of commuting, taking a two-hour drive and turning it into a helicopter ride, or you can just be, like, disgusted by the waste.” As though there were even a sliver of doubt, Magerman added, “I was in the latter category.”
It wasn’t just the waste that gnawed at him — it was the trespass of a moral principle. The helicopter commute was an example of something that, if everyone did it, would obviously be wrong. ”10,000 people can’t be flying helicopters from their backyard,” he said.
.. Magerman calls that helicopter trip “extra-societal” and “outside the realm of normal behavior,” words that also fit what he believes is wrong with Mercer’s relationship to the president. Magerman thinks Mercer has bought special access to impose “extra-societal” views on the Trump administration.
.. “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.
.. 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
.. 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.”
.. 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,
.. 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.
.. , “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.”
.. 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.
.. But the real shrinking of the role of government has been in Trump’s choice of cabinet members, whose aim seems to be to assail the policy goals of their departments.
- secretary of energy is someone who once campaigned to get rid of the Energy Department; the
- Secretary of Education has advocated against the public schools system; the
- Environmental Protection Agency director has a record of repeatedly suing the EPA; and the
- Attorney General has a reputation for opposing the expansion of civil rights.
Other departments are reportedly withering from neglect, as key positions are filled by unqualified people or not filled at all.
.. his daughter Rebekah was part of the transition team that helped Trump choose his cabinet.
.. Was it all worth it?
“It’s like, was having surgery worth it?” Magerman says. “I mean, it was necessary. There was a disease that I thought, like, maybe I had a scintilla of a cure for.”
In the case of Perelman, it made me want to make the school more Orthodox. Which was not what the school was. … Who am I to come in and say I have the right to own their mission and push them in my direction?… I realized hands-off is better. I can give them scholarship money and do arm’s-length things. .... We have this phenonmenon I call the “Instant Billionaire.” In five or 10 years, a person can go from being a person of above average means, to close to a billionaire... In the past the ultra-wealthy had similar characteristics. There were families that made investments in manufacturing, in transportation, in the infrastructure of this country. … They were partners with the government. They had a strong investment in the status quo.But today the instant billionaires [who have made money in intangible businesses — finance, software, liquid investments] have almost no personal investment, no ailgnment, with the status quo. They’re more like lottery winners. Even if they’ve actually worked quite hard to earn it, they don’t have the same relationship (to American society)... A lot of this kind of wealth can go to very idiosyncratic projects. And not necessarily be good.When you are that wealthy, you can make a platform to drown out everyone else’s voice.There is I think a similarly large issue: the way people are hoarding wealth is starving out the rest of us... But when you have a trading company or a hedge fund, you have a few dozen key employees at most. Your have desks, computers, tech infrastructure. You put money in. You get it back as profits.You don’t have a lot of employees. You don’t share the profits. There’s no one involved other than a few other rich white people. You are pulling money out of the economy... A lot of people blanch at a 90 percent tax rate. But I think, if you make millions of dollars a year, do you think being taxed at 90 percent above that level will affect how you do your work?It would cause you to invest more of your earnings back in. You might take you that money and pay your people more. You might enhance your facilities... As things stand, there’s no disincentive for people in my industry to take every dime as profit. People want maximum leverage. They want to take everything out so they can get whatever luxuries they buy. Or other investments …I know, economic life is not a zero-sum game. But I see the damage done when an industry that’s supposed to be just a service industry, finance, becomes 34 percent of the economy, putting a lot of wealth into a few people’s hands... I tried doing angel investing. Which I was a disaster at. I’m too generous in my valuations. People can snow me easily... It isn’t anything by itself. It’s a virtual machine, that does things. It doesn’t have a lot of customers... I was offering software to grammatically analyze text. I did it in grad school. It was the most useless field, it was never going to amount to anything. But I did it really well... The thing that drove me was, being in a lower-middle-class environment, I wanted better. I was driven. I was frugal. I was hyper-focused on education and reaching higher... I get the most constructive growth when I’ve done something wrong. It’s not usually presented to me in the nicest way. But I get a lot of value from it.Philly isn’t New York. This city hates change. No one likes change. But this city seems much more averse to change than others.
.. MAYER: Among the theories that Robinson has propounded and that Bob Mercer has accepted is that climate change is not happening. It’s not for real, and if it is happening, it’s going to be good for the planet. That’s one of his theories, and the other theory that I found particularly worrisome was they believe that nuclear war is really not such a big deal. It’s survivable, and – they think.
And they’ve actually argued that outside of the immediate blast zone in Japan during World War II – outside of Hiroshima and Nagasaki – that the radiation was actually good for the Japanese. So they see a kind of a silver lining in nuclear war and nuclear accidents. And he co-authored a book in 1986 that I took a look at that describes ways that Americans can survive nuclear war by basically digging fallout shelters all across the country. And he believes that radiation is potentially good for people’s health.
DAVIES: And do the Mercer’s seem to have embraced Robinson’s views about nuclear war and climate change?
MAYER: Well, Bob Mercer has certainly embraced the view that radiation could be good for human health – low level radiation. And he’s been in arguments with people that I interviewed about it, so, yes, very much. He seems extremely influenced by Arthur Robinson’s scientific findings.
.. they have very extreme views, and they’re impatient – both of them. They want action fast. And what was a question for me as I was reporting this was, so how did they get what they wanted? What did they do? And they couldn’t really do it on their own because, like many wealthy people who have strong political ideas, they have no idea how to sort of manipulate politics. They need some kind of professional help. And the person they turned to for that was Steve Bannon.
.. Yet, when Trump’s campaign started to really fall apart last August, it was Mercer’s daughter who met with Trump’s people and with Trump and said, I’ll put money in, but you’re going to have to basically put my people in charge of your campaign.
.. MAYER: Well, now, Trump and Steve Bannon go way back. And that’s a different story. Steve Bannon saw Trump speak at CPAC – the Conservative Political Action Conference – years ago, maybe 2013 or 2014, and was blown away by Trump. And so he’s been actually quite helpful to Trump for years. He – when he was running Breitbart, Bannon gave Trump tons of great coverage and really boosted his visibility. So yeah – so Bannon and Trump have been in touch for quite some time.
.. MAYER: Well, according to people I interviewed such as Sam Nunberg, who was an early, early member of the Trump campaign, Breitbart was enormously helpful in providing a platform for Trump, a national platform. And it gave Trump space to sort of test out his narrative and see which storylines worked best and promoted him so much so that Steve Bannon wrote an email to a friend that eventually leaked out – and this was way back in – in 2015 – saying that he was secretly Trump’s campaign manager.
.. DAVIES: You actually spoke to Steve Bannon for this piece.
MAYER: I did speak to Steve Bannon.
DAVIES: What did he tell you?
MAYER: And he was fascinating. He’s very articulate, and he said – he minced no words about the Mercers. He said they laid the groundwork for the Trump revolution. He said irrefutably that when you look at the donors in the past four years, he said they’ve had the single biggest impact of anybody, including the Kochs.
.. Rebekah Mercer who met with Trump and said – your campaign’s a mess. I would like to support you, but you’re going to have to straighten out the way you’re running it. And she suggested that he put Steve Bannon in charge of the campaign as campaign chairman, Kellyanne Conway in charge as campaign manager and that they also put in David Bossie, who runs the group Citizens United, as deputy campaign manager. And Bossie is someone else who the Mercers have supported financially through his group for quite some time. In essence, they were circling Trump with their own people.
.. She had mixed success, but she had some serious successes with Mike Flynn who she wanted to have become national security adviser. And of course, Trump did choose him. He didn’t last very long, but he was in there. And she pushed very hard for Jeff Sessions to be the attorney general, and she got success with that. And she pushed very hard to have Bannon play a major role in the White House. And of course, he is now Trump’s strategic adviser. And at first, she was hoping that Kellyanne Conway would not go into the White House but would stay outside and help Rebekah Mercer run an outside group that would support Trump, but that didn’t happen. Kellyanne Conway went into the White House.
So her people did quite well. I mean, there’s some people that she wanted that didn’t get jobs. She wanted John Bolton, the former U.S. ambassador to the United Nations, to be the secretary of state, and she was very disappointed when he didn’t get that. And she has touted this very odd scientist that her family has supported, Arthur Robinson, to be the national science adviser. And so far, that hasn’t happened.
.. And I think if you sort of step back, one of the things that interests me about what Trump is doing is I think you can see that he is – on questions having to do with the health care fight and the budget, he’s taking positions that are very much aligned with the super-rich donors, particularly things that the Mercers would have liked and in some ways, taking policy positions that hurt many of the middle-class and lower middle-class voters who supported him.
.. Rebekah Mercer’s got a game plan in mind. What she’s hoping to do is start an outside group that’s outside of the White House that’s going to be a powerful voice pushing Trump to take her point of view. And so when – it will trumpet his moves when they – when she thinks they’re good and attack him when she thinks that he’s, you know, not following a tough enough line. And I – you know, so we will start probably seeing commercials and a lot of social media coming from this group.
.. He said that Mercer wanted to shrink the government to the size of a pinhead and that he doesn’t think that – he basically has a philosophy, according to Magerman, that values people on the basis of what they earn. He doesn’t think human beings have intrinsic value. He thinks that if you are a schoolteacher and you earn 2 million times less than Mercer earns, then you’re 2 million times less valuable than Mercer is. And he believes that if you are on welfare, you have negative value. And what Magerman said was, and he’s not talking about economically. He means as a human being.
So he has this kind of very mechanistic, almost kind of Ayn Rand-like, objectivist philosophy.
.. since the Citizens United decision and the others that were part of that was – is that you can now have people – a few people with an incredible amount of money who the rest of the country doesn’t even know their names, let alone who they are or what they want. And they can have this outsized impact. And I think that that’s what’s different.
You know, before Citizens United, there was still a lot of money in politics, but because there were limits on how much any single person could give at any time to PACs, there were bundlers, and they were known to people. And they were – kind of the parties had much more influence which had much more consensus.
At some companies, a divisive presidential campaign has led to disharmony in the workplace
.. “His views show contempt for the social safety net that he doesn’t need, but many Americans do,” said Mr. Magerman, 48 years old, during an interview with The Wall Street Journal at the Dairy Café, a kosher restaurant he owns in Bala Cynwyd, Pa. “Now he’s using the money I helped him make to implement his worldview” by supporting Mr. Trump and encouraging that “government be shrunk down to the size of a pinhead.”
.. He said he was thinking about reaching out to Democratic Sen. Elizabeth Warren (D., Mass.) to craft proposals to reduce speculative trading, which presumably would curtail Renaissance’s profits.