There has been a lot of discussion about Peter Thiel in light of his speech at the RNC.
This tweet about Thiel possibly being an ally of ‘neoreaction’ (NRX) also went slightly viral:
— Samuel Hammond (@hamandcheese) July 22, 2016
Thiel’s popularity could be part of the recent backlash against democracy, as he is most famous for his 2009 post on the Libertarian ‘Cato Unbound’ blog, where he wrote about freedom and democracy being incompatible. In the same article, he goes on to say “Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women — two constituencies that are notoriously tough for libertarians — have rendered the notion of ‘capitalist democracy’ into an oxymoron.” In light of Islamic terrorism, surging entitlement spending, SJWs, and other ills wrought by democracy, his warning proved prescient and prophetic. Democracy gives power to the uninformed masses to vote in wasteful, dysfunctional policy that hurts the most productive members of society, as well as weakens national security. Thiel has also gained fame and popularity for his role in taking down the internet’s biggest bully, Nick Denton of Gawker.
Is Thiel a neoreactionary? Maybe he could have been labeled as such in 2013, but not now, as NRx, in merging with the ‘alt right’, has become more focused on nationalism, Christianity, and traditionalism, rejecting laissez faire capitalism and libertarianism, which some have argued is too similar to liberalism.
Trump, as suggested by comments and China and Mexico, favors protectionism.
But is Thiel anti-China? Most libertarians want to expand markets, not restrict them, whereas Trump wants to build a wall. There is possibly some ideological conflict in having to be both nationalistic and libertarian. Thiel, on social social economic issues, seems closer to Tyler Cowen than Trump. Although NRx opposes democracy, opposing democracy is necessary but not sufficient in and of itself to be a reactionary. However, in 2008, Thiel donated $1 million NumbersUSA, anti-immigration lobbying group. But that was a long time ago. Because Thiel keeps a low profile, with the exception of some comments he made a long time ago, there isn’t much known about him policy-wise, except that he leans libertarian.
Also kinda amazed at the ebullient reaction of the crowd after Thiel proudly proclaimed being gay…this is certainly not the GOP of 20 years ago, that’s for sure. It’s weird how tolerant or indifferent the ‘alt right’ is of homosexuality, whereas it’s the boring ol’ ‘cucks’ like Sean Hannity and Bill O’Reilly that are still fighting ‘culture wars’. From his speech, Thiel’s ‘vision’ is that everyone can rise above personal differences, in a united goal of ‘making America great’. But the problem is the far-left is ruthless, so the ‘right’, unfortunately, has to enter the trenches rather than focus on more transcendent, ambitious goals such as space exploration.
Although investing in Facebook in 2005 was a genius move that made Thiel the billionaire he is today, some of his more recent initiatives have been duds. After significant losses starting in 2009, Clarium dropped from $7 billion in assets in 2008 to around $350 million in 2011, due to incorrect bets on inflation and the US dollar. Instead of high inflation, inflation has remained low due to the ‘flight to safety’ caused by weakness both in Europe and emerging markets. On the opposite side of the political spectrum, George Soros has lost billions of dollars since 2009 on repeated failed bets against the S&P 500, and he was also wrong in his prediction that the Brexit would cause an economic crisis (instead, the US stock market has surged).
Part of the reason why the super-rich are often lousy investors and bad economic prognosticators is they assume that the knowledge that made them so rich and successful is transferable to unrelated domains, or they become too confident, believing that they can time the stock market or predict the economy based on ‘hunches’ or hubris instead of quantifiable data and empirical evidence. Investing in tech start-ups, which is Thiel’s expertise, does not apply to understanding the treasury bond market. They are entirely different fields. As the exception that proves the rule, Warren Buffett became a multi-billionaire through investing in individual stocks, so he has a much better understanding of the economy than someone who became a billionaire through, say, retail, and explains why Buffett didn’t fall for the doom and gloom and hyperinflation hype of 2008-2013, because he knew based on many decades of experience that the economy and stock market would recover, and it did.
Also the Thiel Fellowship has been kinda dud, too:
In September 2013, Vivek Wadhwa wrote that the Thiel Fellowship had failed to produce any notable successes to date, and even its limited successes were instances where the Thiel Fellows were working in collaboration with more experienced individuals.
On October 10, 2013, former Harvard University President Larry Summers was reported as having said at the Nantucket Project conference: “I think the single most misdirected bit of philanthropy in this decade is Peter Thiel’s special program to bribe people to drop out of college.”
The problem is the high failure rate for startups and the fact that $100k doesn’t get you very far these days. To pay for advertising, insurance, legal stuff, research and development, prototypes, coding, rent, and other expenses, you probably need at least a million to cover the first few years of expenses. $100k isn’t even the yearly salary of a competent Silicon Valley coder. Yeah, maybe $100k would have been sufficient 20 years ago, when everything was much cheaper and less competitive, but not anymore. Those winners would have been better-off sticking the $100k in an index fund, staying in college to major in STEM, and then returning the principle to Thiel afterwards.