by mrandish | 2025-04-10 17:37:59+00:00
> the reaction of bond markets that didn't follow his overly simplistic model made him hit the brakes?

It's pretty clear that's essentially what happened. The question is how, why and what Trump's plan was.

> Is it possible that Trump is just a stupid person?

I don't think a simple linear scale between "Stupid" <---> "Smart" is a useful model for predicting likely job performance in complex, multi-function roles. Reality is far more complicated and nuanced. Whether assessing an employee, CEO, politician or spouse, just using an IQ test (or any other single point measure on one dimension) yields only an approximate directional indicator. It's certainly not the optimal model because it's entirely possible for an employee, CEO, politician or spouse who scores meaningfully lower on an intelligence test to substantially outperform a higher scorer in real-world results on the broad composite of job, leadership, governance or spousal metrics you care about.

I've read Trump's "Art of the Deal" book. He thinks he's a gifted negotiator based on the success he had in negotiating commercial real estate deals. However, commercial real estate deals are generally a pretty narrowly specific kind of deal structure. They tend to each be one-off, transactional arrangements which hinge on accurately estimating the value which can be extracted over time from a property and the future performance of the market in that location. Then forming a one-time consortium of financial backers willing to provide the capital on terms which will allow the operator to make a profit. While the amounts can be large and horizons long, these are fairly simple deals with only a few unknown dependent variables everyone is estimating the value of their position on. It's a bit like poker in some ways. It's a bid, counter-bid type of structure with only a few sellers and a few buyers at the table at any given time and each seller is offering something different enough that it's not a true commodity. There's hidden information but the domain is constrained and the unknowns are known. The bidding process reveals some information about how each player has assessed the value of their hand. They can either have a truly strong hand, be bluffing or somewhere in-between.

This is why I think Trump is ill-suited to directly managing complex, multi-dimensional geopolitical negotiations. They are profoundly different. There's far more hidden information, the domain is nearly unconstrained, there are unknown unknowns. However, not being good at negotiating these kinds of deals isn't necessarily a problem for a president. There have been a lot of presidents who've done well in geopolitical negotiations who were similarly ill-suited. They did well because they were good at selecting talent to manage those processes, setting high-level objectives and meta-managing those processes against broad political objectives and policies (Reagan would be an example). The fundamental problem with Trump is that he thinks he's good at all types of negotiation AND that it's important to his self-image to be perceived as directly involved and instrumental in 'winning'. The final nail, as it were, is that it's pretty clear Trump's default model in negotiations, politics, legal strategy, financial deals, etc tends to be "win/lose" vs at least starting out seeking a "win/win". Complicating this is that his projected self-image seeks to be publicly acknowledged as winning by beating his opponent.

This is a bad scenario because every counter-party in geopolitical trade negotiations has a far more detailed psych analysis than what I wrote that's been prepared by experts who've read everything Trump's ever said or written publicly. While Trump's actions in any given moment are certainly unpredictable, that's not generally a good thing. Especially because his internal priorities, self-image and emotional dynamics appear pretty easy to read and fairly predictable. Whether they're right or not, the counter-parties almost certainly believe they have a fairly solid take on Trump's psychological drivers. Appearing "scrutible" wouldn't necessarily be a bad thing (in fact it could be quite good), except that these psych evals are both high-confidence AND they say Trump is unpredictable, sometimes acts out emotionally, is swayed by personal loyalty over strategy, can perceive negative outcomes as personal attacks, reflexively seeks retribution for personal attacks, is strongly influenced by the immediate feedback of a couple dozen people and has few strongly-held philosophical or political premises. Whether all of these things are entirely true or not doesn't much matter. Trump has projected them so consistently over so many decades others believe they're true.

That's why when Trump said yesterday that he intends to personally be "deeply involved" in the negotiations with trading partners, I sighed. He has virtually no credibility as someone willing to stick by any framework that might be developed in private negotiations. He also has no patience for the long, painstaking process involved. No matter how good the Treasury and State negotiating teams are, their own boss has convinced the counter-parties that these teams have little real influence or ability to strike a deal. To me, that means the odds of any meaningful deals being negotiated where counter-parties are willing to 'horse trade' elements of significant value is between slim and none.