Review: American Oligarchs: The Kushners, the Trumps and the Marriage of Money and Power by Andrea Bernstein

I am no fan of the Trumps.  Nor do I approve of many of the financial shenanigans engaged by him, his company, and his family.  But the problem lies primarily with the loopholes created by legislators at the behest of the rich so they can avoid taxes and get richer all the while sucking at the public teat through government contracts. Trump himself has acknowledged publicly in one of the debates that he used money to purchase influence and garner favor. The Fact is that politicians love power and want to keep it.  To do that they need lots of money and people like Trump were there to fulfill their wishes.  At a price.  

 

"Consultants" hire themselves out to help get politicians elected.  Then get hired to work in the government they helped elect.  Then leave that government and create lobbying firms to sell the influence and connections they now possess thanks to their time in that government.

 

One of the advantages to owning a casino is how easy it is to launder money and get unregistered loans.  His father bailed him out when Trump was close to insolvency and unable to make a bond payment by walking into one of Trump's casinos in Atlantic City and purchasing $3.5 million worth of chips and then just walking out effectively giving his son a free loan. Clearly, following the refusal of American banks to loan him more money following a string of bankruptcies in which they lost millions, the Russian oligarchs stepped in to fill the void.

 

Given what Trump said during the debates, i.e., how he gave money to both parties in order to garner favor and influence, I should not have been surprised with the close political relationships between the Kushner family and the Democrats, especially Bill Clinton, but I certainly was with their connection to Benjamin Netanyahu. Perhaps the Jewish connection and appreciation for Israel stemmed from the horrific experience of their family under the Nazis. (The failure of Trump to denounce the anti-Semitism of his more radical followers is the more surprising given the Kushners' Jewishness and the conversion of Ivanka to Judaism.)

 

Trump benefited from the Bloomberg policy of seeking foreign investment for New York.  Bloomberg actively solicited money from overseas, proclaiming that the city needed them to help pay taxes and fund schools and police. The Trumps took advantage of this policy, and so did the Russians, who invested heavily in Trump projects, often buying condos and apartments in his buildings for millions of dollars in cash.  It was a marvelous way to laundry money and curry favor with the future president. More than 50% of these units were occupied less than two months out of the year. A less beneficial impact was a doubling of rental costs in the city.

 

Ultimately, this is a very depressing book. The clear lesson is that if you have money, you can flaunt the laws;  if you have money you inherited, you can create an image for yourself that may be completely at odds with who you are; that if you have money, the rules that apply to everyone else don't apply to you; and, if you have money, you can buy influence among politicians who then build loopholes for you to drive your trucks through. One wonders what the net effect of the Trump presidency will be. One danger will be, as a reviewer in the Washington Post noted, " cottage industry of Trump biographers and researchers has uncovered so many examples of deceptive, fraudulent and mean-spirited behavior by the president and his family that one succumbs to outrage fatigue."

 

Review: Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou

 Listened to this as an audio book and I found all sorts of excuses to do things so I could continue listening (my wife loved it because most of that work involved cleaning.) As almost everyone knows Elizabth Holmes had dropped out of Stanford so she could get rich.  She had an idea for a device that would revolutionize blood testing, a nifty idea.  Unfortunately it never worked but she insisted in public it did and fraudulently manipulated the data behind the scenes to prevent investors from recognizing that.  When VP Biden visited the Theranos lab in 2015 he was presented with rows of machines.  The Problem was they were all fake.

 She persuaded numerous well-known people to sit on the board and invest. As a young, attractive woman, perhaps that influenced the older men who jumped on board. (Henry Kissinger and George Schultz were among them. Ironically, Schultz, who got his grandson a job at Theranos, refused to believe him when the grandson reported the "place was rotten.") I don't know. Then again, I always wondered about John McCain's choice of Sarah Palin who seemed to offer little except a nice face. The media fell for it, too. Adoring profiles appeared in numerous magazines that did not do their homework. CEOs at Safeway and Walgreens were not immune to her spell.

 

I found this quote from the NY Times review particularly apt: "Swathed in her own reality distortion field, she dressed in black turtlenecks to emulate her idol Jobs and preached that the Theranos device was “the most important thing humanity has ever built.” Employees were discouraged from questioning this cultish orthodoxy by her “ruthlessness” and her “culture of fear.” Secrecy was obsessive. Labs and doors were equipped with fingerprint scanners.

 

The media was completely bamboozled and fawned all over her.  All sorts of evidence was there from employees who were quitting in droves, but they were never interviewed. The old geezers on the board had even been warned by relatives who worked at the company to no avail. The old guys were so enamored of this pretty thing with nice legs that they abandoned their fiduciary responsibility and really should have been held responsible for the disaster.  David Boies doesn't escape condemnation either.  The esteemed lawyer who charged $1000 per hour had a stake in the company, violating all sorts of ethical tenets, sued anyone who might say something negative about the company, harassing them with private detectives and threats.*

 

Holmes and her erstwhile boyfriend, ex COO of Theranos, Ramesh Balwani, are now under indictment facing decades of imprisonment if found guilty. As further evidence of her cold manipulative personality, detractors cite her becoming pregnant just before the trial was to begin (resulting in a postponement) as a calculated move to garner sympathy.  The story is not over and several podcasts (The Dropout and Bad Blood: the Final Chapter) are reporting on the trial.

 

Society functions well only when there exists a level of trust. We want (and need) to assume that people are not fooling us. It's OK to be moderately skeptical but actions like Holmes's raise the skepticism bar to an impossible level that will eventually stifle progress.

 

*see https://isb.idaho.gov/blog/theranos-and-the-tale-of-the-disappearing-board-of-directors/ for more.