clock menu more-arrow no yes mobile

Filed under:

Peter Thiel Needs a Reality Check

After his speech on the state of the 2016 election, we have some thoughts for the PayPal cofounder

Getty Images
Getty Images

On Monday morning, Peter Thiel gave a speech defending his support of Donald Trump at the National Press Club in Washington, D.C.

It was a brave choice of venue, considering the recent revelation that the billionaire had helped fund a series of lawsuits against Gawker, which helped to shutter the site in late August. But he clearly felt he needed to defend himself. Thiel, who sits on Facebook’s board of directors and has ties with Silicon Valley’s premier startup incubator, Y Combinator, has recently been under fire for his public support of the Republican presidential candidate. Fellow entrepreneurs have argued that his stand for Trump is a direct endorsement of racism and intolerance. And so, eight days before the election, Thiel delivered a defiant speech about how little faith he has in American politics, and how he’d essentially like to see it all blown up with a candidate like Trump. Happy Halloween, indeed!

The speech was discomfiting and mind-boggling, to say the least. If nothing else, it was a reminder that the billionaire who believes seasteading is a viable option for society needs a reality check. So let’s break it down, piece by piece:

Thiel: Only an outbreak of insanity would seem to account for the unprecedented fact that this year, a political outsider managed to win a major party nomination.

To the people who are used to influencing our choice of leaders, to the wealthy people who give money and the commentators who give reasons why, it all seems like a bad dream. Donors don’t want to find out how and why we got here, they just want to move on. Come November 9, they hope everyone else will go back to business as usual. But it is just this headlessness, this temptation to ignore difficult realities indulged in by our most influential citizens, that got us where we are today.

Ever the contrarian, Thiel takes subtle delight in how wrong “the elite” was to expect that a former reality-TV host would not be a viable candidate for the American presidency. He also attempts to separate himself from the category of “most influential citizens.” Thiel is a venture capitalist worth $2.7 billion who recently ghost-funded a lawsuit against Gawker based on a personal vendetta. Thiel is both a wealthy donor who recently gave Trump’s campaign $1.25 million and an influential citizen.

At the center of the Venn diagram of tendencies by Silicon Valley billionaires and political billionaires is the mind-numbing habit to ignore one’s own monetary skin in the game and pretend you are just like everybody else. Having a Republican in office would most likely benefit Thiel, a libertarian-leaning billionaire who despises government regulation.

Our youngest citizens may not have huge medical bills, but their college tuition keeps on increasing faster than the rate of inflation, adding more every year to our $1.3 trillion mountain of student debt. America has become the only country where students take on loans they can never escape, not even by declaring bankruptcy. Stuck in this broken system, millennials are the first generation who expect their own lives to be worse than the lives of their parents. While American families’ expenses have been increasing relentlessly, their incomes have been stagnant. In real dollars, the median household makes less money today than it made 17 years ago. Nearly half of Americans wouldn’t be able to come up with $400 if they needed it for emergency.

This sounds a lot like a portion of a Bernie Sanders stump speech. Sanders championed the idea of free college tuition, criticized the unequal distribution of wealth among lower and middle-class families, and argued for higher taxes on billionaires and corporations. But Trump has spent little time discussing how he would fix the student-loan-debt complex. And one policy adviser’s proposal to hand student loans off to private companies would likely negatively affect poor, low-income students, especially those who study liberal arts. Similarly, economists have said that Trump’s tax plan would offer very little support for the middle class. These are problems that seem to concern Thiel, but they are not problems that Trump is well positioned to fix.

This point is not necessarily wrong, but that he’s making it in defense of a Trump endorsement is befuddling.

Yet while households struggle to keep up with the challenges of everyday life, the government is wasting trillions of dollars of taxpayer money on faraway wars. Right now we’re fighting five of them: in Iraq, Syria, Libya, Yemen, and Somalia.

Thiel supports Trump because he thinks the Republican candidate would involve the United States in fewer needless wars. But Trump’s general disposition offers no signs of a steady and wise commander-in-chief. He is combative in all aspects of his life — from litigation to politics to Twitter arguments. And his policies don’t offer much comfort either; the possibility of future domestic terrorism once pushed him to suggest the U.S. ban Muslims from entering the country. He has promised to bring back waterboarding and kill innocent civilians in attempts to blunt ISIS’s efforts. Though he has pointed to carpet-bombing as a strategy to end conflicts abroad, he’s offered few details beyond that. To imply that Trump would make America a more peaceful nation ignores the past 12 months of his campaign.

Now, not everyone is hurting. In the wealthy suburbs that ring Washington D.C., people are doing just fine. Where I work in Silicon Valley, people are doing just great.

Including Thiel.

But most Americans don’t live by the Beltway or the San Francisco Bay. Most Americans haven’t been part of that prosperity.

They also have not been part of a plan to create a floating island country for billionaire elites.

It shouldn’t be surprising to see people vote for Bernie Sanders or for Donald Trump, who is the only outsider left in the race. Very few people who vote for president have ever thought of doing something so extreme as running for president. The people who run are often polarizing. This election year, both major candidates are imperfect people, to say the least. I don’t agree with everything Donald Trump has said and done. And I don’t think the millions of other people voting for him do, either. Nobody thinks his comments about women were acceptable.

I agree, they were clearly offensive and inappropriate. But I don’t think the voters pull the lever in order to endorse a candidate’s flaws. It’s not a lack of judgment that leads Americans to vote for Trump. We’re voting for Trump because we judge the leadership of our country to have failed.

Thiel sets up a dichotomy that isn’t partisan as much as it is capitalist. He wants to “disrupt” politics the same way PayPal, the company he successfully cofounded, disrupted online payments. It’s not about the person but the category of person.

This judgment has been hard to accept for some of the country’s most fortunate, socially prominent people. It’s certainly been hard to accept for Silicon Valley, where many people have learned to keep quiet if they dissent from the coastal bubble. Louder voices have sent a message that they do not intend to tolerate the views of one half of the country.

To say that only “fortunate” and “socially prominent” people are upset by the extent of Trump’s support is shortsighted. There are plenty of less-fortunate folks who are equally horrified, especially American minorities. Thiel is accusing liberal groups of intolerance, while defending his support of a candidate whose rallies look like this.

This intolerance has taken on some bizarre forms. The Advocate, a magazine which once praised me as a gay innovator, even published an article saying that, as of now, I am, and I quote, “not a gay man,” because I don’t agree with their politics. The lie behind the buzzword of diversity could not be made more clear. If you don’t conform, then you don’t count as diverse, no matter what your personal background.

Here’s the post in question, which is an unfortunate hot take. It’s more revealing that Thiel would take personal, public offense with this comment without addressing the fact that the man he’s supporting for president is against same-sex marriage. It’s even more revealing that Thiel thinks this is proof that diversity is a lie created by the liberal elite.

Even if they think the American situation is serious, why would they think that Trump, of all people, could make it any better? I think it’s because of the big things that Trump gets right. For example, free trade has not worked out well for all of America. It helps Trump that the other side just doesn’t get it. All of our elites preach free trade. The highly educated people who make public policy explain that cheap imports make everyone a winner, according to economic theory. But in actual practice, we’ve lost tens of thousands of factories, and millions of jobs to foreign trade. The heartland has been devastated. Maybe policymakers really believe that nobody loses or maybe they don’t worry about it too much because they think they’re among the winners. The sheer size of the U.S. trade deficit shows that something has gone badly wrong. The most developed country in the world should be exporting capital to less developed countries. Instead, the United States is importing more than $500 billion every year. That money flows into financial assets, it distorts our economy in favor of more banking and more financialization, and it gives the well-connected people who benefit a reason to defend the status quo. But not everyone benefits, and the Trump voters know it.

Thiel spends more time detailing his pessimism about America’s leadership than he does explaining what makes Trump qualified to make crucial decisions for the American economy. The answer is, not much, according to many detailed histories of his failed business dealings.

Trump voters are also tired of war. We have been at war for 15 years, and we have spent more than $4.6 trillion. More than 2 million people have lost their lives. And more than 5,000 American soldiers have been killed. But we haven’t won. The Bush administration promised that $50 billion could bring democracy to Iraq. Instead we’ve squandered 40 times as much to bring about chaos. Yet even after these bipartisan failures, the Democratic party is more hawkish today than at any time since it began the war in Vietnam. Harking back to the no-fly zone that Bill Clinton enforced over Iraq before Bush’s failed war, now Hillary Clinton has called for a no-fly zone over Syria. Incredibly, that would be a mistake even more reckless than invading Iraq, since most of the planes flying over Syria today are Russian planes. Clinton’s proposed course of action would do worse than involve us in a messy civil war; it would risk a direct nuclear conflict.

Again, there is no argument for Trump in this scenario. But to contrast what Thiel suggests, here’s a list of things Donald Trump has said about nuclear weapons:

  • In a 1984 interview with The Washington Post, he detailed his strategy for negotiating a nuclear treaty with the Soviets: “It would take an hour and a half to learn everything there is to learn about missiles,” he said. “I think I know most of it anyway.”
  • In 1990, Trump reportedly offered advice to a U.S. nuclear arms negotiator, arguing he could cut a good deal with the Soviets by arriving late, standing over their negotiator, sticking a finger in his chest, and saying, “Fuck you.”

What explains this eagerness to escalate a dangerous situation? How could Hillary Clinton be so wildly overoptimistic about the outcome of war? I would suggest that it comes from a lot of practice. For a long time our elites have been in a habit of denying difficult realities. That’s how bubbles form. Whenever there is a hard problem, but people want to believe in an easy solution, they will be tempted to deny reality and inflate a bubble.

Within a few sentences, Thiel blames elites for an obscured sense of reality and discusses foreign politics in terms of the popular Silicon Valley buzzword “bubbles.” Thiel has decided to argue against elites with the language of elites.

Something about the experience of the baby boomers, whose lives have been so much easier than their parents or their children, has led them to buy into bubbles again and again. The trade bubble says everyone’s a winner, the war bubble says victory is just around the corner, but these overoptimistic stories simply haven’t been true. And voters are tired of being lied to. It was both insane and somehow inevitable that D.C. insiders expected this election to be a rerun between the two political dynasties who led us through the two most gigantic financial bubbles of our time. President George W. Bush presided over the inflation of a housing bubble so big that its collapse is still causing economic stagnation today. But what’s strangely forgotten is that last decade’s housing bubble is just an attempt to make up for the gains that had been lost in the decade before that. In the 1990s, President Bill Clinton presided over an enormous stock market bubble, and a devastating crash in 2000, just as his second term was coming to an end. That’s how long the same people have been pursuing the same disastrous policies. Now that someone different is in the running, someone who rejects the false, reassuring stories that tell us everything is fine.

Finally, Thiel has revealed his true philosophy behind supporting Donald Trump: pessimism. He has made no real argument for Trump; he’s instead made an argument against whatever it is we’re doing now. He’s willing to blow it all up for the sake of experimentation — in true startup culture fashion. And as someone who has considered injecting the blood of young people to live longer, and starting a new, privileged society on an island, why wouldn’t he be? Thiel is rich and powerful. He is protected by a warm, all-encompassing blanket of his riches.

His larger-than-life persona attracts a lot of attention. Nobody would suggest that Donald Trump is a humble man.

Thiel suggests that this is one of the only legitimate criticisms of Trump.

But the big things he’s right about amount to a much-needed dose of humility in our politics. Very unusually for a presidential candidate, he has questioned the core concept of American exceptionalism. He doesn’t think the force of optimism alone can change reality without hard work. Just as much as it’s about making America great, Trump’s agenda is about making America a normal country. A normal country doesn’t have a half-trillion-dollar trade deficit. A normal country doesn’t fight five simultaneous undeclared wars. In a normal country, the government actually does its job.

Trump’s pessimism about the state of the country doesn’t necessarily mean that under his presidency we would suddenly be more humble. Rather, it’s a technique Trump has exploited to rally his base. Thiel seems to think this mind-set is exactly what we need to get back to “normal.” And an example of a “normal” country, I guess, would be a place like Sweden?

And today it’s important to recognize that the government has a job to do. Voters are tired of hearing conservative politicians say that government never works. They know the government wasn’t always this broken. The Manhattan Project, the interstate highway system, the Apollo program, whatever you think of these ventures, you cannot doubt the competence of the government that got them done. But we have fallen very far from that standard. We cannot let free-market ideology serve as an excuse for decline.

The Manhattan Project, highways, and the Apollo program are curiously dated examples of programs America has launched, and say very little about contemporary civil rights issues or really anything particularly relevant to 2016.

No matter what happens in this election, what Trump represents isn’t crazy, and it’s not going away. He points toward a new Republican Party beyond the dogmas of Reaganism. He points even beyond the remakings of one party, to a new American politics that overcomes denial, rejects bubble thinking, and reckons with reality. When the distracting spectacles of this election season are forgotten, and the history of our time is written, the only important question will be whether or not that new politics came too late. Thank you.

We made it through. Now: any bets on the year Thiel runs for president?