Money man: Robert Mercer

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.

Thus, the

  1. secretary of energy is someone who once campaigned to get rid of the Energy Department; the
  2. Secretary of Education has advocated against the public schools system; the
  3. Environmental Protection Agency director has a record of repeatedly suing the EPA; and the
  4. 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.”

Magerman: How ‘instant billionaires’ threaten America

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.

‘You Have to Stop,’ Renaissance Executive Tells Boss About Trump Support

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.