The Trump Paradigm Shift 2019

7/20/2019 -- Whatever your bias or special interest, it’s important to understand what’s going on here which is beyond markets and politics.  The world is changing at a pace so fast few can understand what’s really going on.  Taking into account the fact that the world is not presented in real form (fake news) it becomes even more confusing to the average reader.  We have touched on this in our book Splitting Pennies and want to dive deeper here.

Trump is a good example because he’s the first politician that’s not a politician.  He’s not the first, Ross Perot made a stab in 1992 and there have been others.  It’s not about Trump – it’s about paradigm shift.  This term was popularized in Thomas Kuhn’s must read book “The Structure of Scientific Revolutions” which is the basis of the thinking of Silicon Valley.  The proof of his hypothesis was Apple Computer (AAPL).  Recently, we have disruptive unicorns displacing traditional industries, such as the Uber’s and the Lyft’s.

Uber has changed New York City and changed the taxi business forever, for better or worse.  Perhaps Uber has changed the idea of what is transportation.  And just like Bitcoin, this isn’t about tackling the Establishment it’s about technological change and its impact on society.

Going back to politics, the political establishment failed, just like the Taxi industry failed to innovate.  Their last ditch attempt to appease the masses, Obama, was an intelligent attempt but failed short to capture real ‘change’.  Obama proved to be no better than all of his white brothers, or in fact worse. 

Post Trump, politics will never be the same.  Here’s a simple 2020 prediction for you all.  My insurance agent told me ‘no one has a crystal ball’ which was his pitch saying the Democrats are talking about Socialism and are going to raise taxes so here’s my 2020 prognosis:

Trump is going to win in a landslide, and the Republicans are going to take both houses.  They may lose a few battles but overall in 2020 they are going to win the war, and cause the Democratic Party to permanently fracture from the loss.  Democrats still don’t understand that they have disenfranchised themselves from the majority.  They still think that “Well, we’re half the country” and haven’t adopted to the new times.  They may control the media and much of our society but they’ve proven to be associated with wacky conspiracy theories like the Russia Hoax for example.

Democrats are like Taxi drivers 10 years ago saying that Uber will never work because they aren’t professionals.  Trump isn’t a professional politician.  You know what?  They’re right!  That’s why he’s so popular.  And he’s not for sale to the highest bidder, like a Clinton.  But Democrats still have hope, and in 2020 they are going to lose that.  No one knows what that means but a likely scenario means a significant reduction of the party and an upsurge in new upstart parties.  My guess is that the next President is going to be either Arnold Schwarzenegger or a business magnate to emerge such as an Elon Musk (not Elon Musk, just sayin’ – some business innovator, perhaps the founder of an Uber of the future).  What we can say for sure, for the next few generations we aren’t going to have any more Clintons or Bush-types in the White House. 

They failed to evolve and adapt paradigm shift.  Trump seized the moment.  This may all sound far-fetched.  But if you told me during Obama the next President would be Trump I would have thought you were nuts.  If you would have told me in 10 years there wouldn’t be a single Yellow Cab in New York City I would have said you’d be nuts.  I remember staying on high floors at various hotels like the Plaza looking down on the yellow cabs thinking they looked like little ants.  There were almost no street cars in New York City during the 80’s, it was mostly cabs.

So what is a Paradigm Shift, according to Kuhn:

Kuhn challenged the then prevailing view of progress in "normal science". Normal scientific progress was viewed as "development-by-accumulation" of accepted facts and theories. Kuhn argued for an episodic model in which periods of such conceptual continuity in normal science were interrupted by periods of revolutionary science. The discovery of "anomalies" during revolutions in science leads to new paradigms. New paradigms then ask new questions of old data, move beyond the mere "puzzle-solving" of the previous paradigm, change the rules of the game and the "map" directing new research.[1]  For example, Kuhn's analysis of the Copernican Revolution emphasized that, in its beginning, it did not offer more accurate predictions of celestial events, such as planetary positions, than the Ptolemaic system, but instead appealed to some practitioners based on a promise of better, simpler solutions that might be developed at some point in the future. Kuhn called the core concepts of an ascendant revolution its "paradigms" and thereby launched this word into widespread analogical use in the second half of the 20th century.

The modern description is ‘going viral’ where society reaches a critical mass, and changes.  It’s the difference between MySpace and Fakebook.

The world is changing so fast, many entrenched industries are failing to adapt, like the political system.  Some are evolving.  If you look at the trend of Organic Foods, you can see big Ag adapting as much as they can.  FinTech is adapting rapidly.  And about politics, Big Tech gets it, in fact Facebook admits that it was used to manipulate an election:

In keeping with their spectacular reputation of violating privacy and rigging elections, Facebook has said that it removed "hundreds of accounts" from Facebook and Instagram that were used to influence elections in Africa, according to CNN. Only it wasn't Russia who was behind this latest intervention, but Israel.

Disruptive tech is changing the way we live and do business.  We Work is changing the way we think about office space.  Hyperloop is building a transportation system so fast you can get from LA to Silicon Valley in less than an hour (some estimates as low as 30 minutes).

A lot of the tech coming out seems like science fiction, but again if you look at where we are today compared to where we were only 10 years ago, things don’t seem so fantastic.  And the best example is Trump – who is the last person anyone would have guessed to be President of the United States of America.

So next time one of the Trump haters starts crying and twitching or in desperate need of counseling, remind them that it’s not about Trump it’s about Paradigm Shift, and that the Political Class failed to deliver any candidate other than corrupt grafters and killers.  The political system as setup by the founding fathers is actually working – as it allows for evolution; just like Wall St. is working. 

Capitalism is an evolutionary ecosystem by nature, if you have a poor model you fail.  Amazon, Google, Microsoft, and others have created wealth and thousands of jobs, and not to mention enable millions of other businesses to achieve productivity with the simple tools they offer.  What did the government offer to us lately?  More rules, regulating people out of business, raising taxes, sponsoring foreign wars we don’t need, etc. etc.

The political establishment simply failed to adapt.  It’s hard to lie to people now, even with ‘fake news’ and ‘deep fakes’ there’s this little problem called the internet, where facts can be seen as facts.  It’s not a court and that’s the great part about it – people decide on their own. 

Stupidity is the strongest human characteristic.  I believe if the Director of the CIA got on TV and told the public all the truth’s they’ve been hiding 99% of the population wouldn’t buy it.  They would think it’s a prank, or a lie, or a “Russian Spy”.  People tend to see what they believe in and what they want to see, not what’s real.  This has been proven by Quantum Physics, which is individually known as the observer phenomenon:

In physics, the observer effect is the theory that the mere observation of a phenomenon inevitably changes that phenomenon[1]. This is often the result of instruments that, by necessity, alter the state of what they measure in some manner. A common example is checking the pressure in an automobile tire; this is difficult to do without letting out some of the air, thus changing the pressure. Similarly, it is not possible to see any object without light hitting the object, and causing it to reflect that light. While the effects of observation are often negligible, the object still experiences a change. This effect can be found in many domains of physics, but can usually be reduced to insignificance by using different instruments or observation techniques.  An especially unusual version of the observer effect occurs in quantum mechanics, as best demonstrated by the double-slit experiment. Physicists have found that even passive observation of quantum phenomena (by changing the test apparatus and passively 'ruling out' all but one possibility), can actually change the measured result. A particularly famous example is the 1998 Weizmann experiment.[2] Despite the "observer" in this experiment being an electronic detector—possibly due to the assumption that the word "observer" implies a person—its results have led to the popular belief that a conscious mind can directly affect reality.[3] The need for the "observer" to be conscious is not supported by scientific research, and has been pointed out as a misconception rooted in a poor understanding of the quantum wave function ψ and the quantum measurement process,[4][5][6] apparently being the generation of information at its most basic level that produces the effect.

The interesting characteristic about politics is that these phenomenon are palpable and changing society in real time.  To fully understand what’s going on in our society, don’t study current events – study Philosophy, Epistemology, History, and Hard Science.

We will conclude with one of the greatest quotes ever:

Enjoy the ride!

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