Trump didn’t release his taxes. But, somehow the NY Times got their hands on some older taxes. It showed that Trump had a billion dollar loss. Because of the way the American tax code treats tax losses, he was able to carry forward the loss and avoid paying future taxes. John Cochrane has an excellent essay on the American tax code here. Read it if you don’t understand carry forwards.
I am looking at this differently. Hillary Clinton and her supporters like Mark Cuban are beating the drum that Trump is a failure. They ask, “How can you lose $1B dollars?”. Whatever you think about Trump, understand this line of thinking is a super dangerous slippery slope. Failure cannot be a scarlet letter. Failure cannot stick with a person like a stigma. I spent my life trading, and now working with entrepreneurs. Failure is an integral part of the whole process.
Without failure, we will never have innovation.
Great scions of innovation like Einstein and Edison failed. They failed a lot. President Abraham Lincoln failed a lot. You cannot become great in your field without understanding how to deal with failure. Great businesspeople fail all the time. Some companies, like 3M, encourage risk taking and have a process to deal with failure.
When people start thinking that their reputation will be permanently stained from having failed, they won’t try. We read hopeful books to our children like “The Little Engine That Could”. But, sometimes the little engine doesn’t get over the hill. The little engine should be able to try again.
As adults, we understand the pain of failure and we try to protect our kids from it. That’s not smart.
In innovative companies and societies, failure isn’t a black mark. Silicon Valley’s culture encourages entrepreneurs to speak about their failures. Some people won’t invest in people unless they have failed. Dealing with failure is a part of the process. Fred Wilson is a VC who understands failure. He wrote about it here. Brad Feld is a VC who understands failure. He had a different take on failure here. By the way, neither Fred nor Brad is supporting Trump. But, I hope they would be equally alarmed as I am on the way we are talking about failure politically.
In my experience, politicians, lawyers and hyper partisans are not risk takers. Politicians and lawyers don’t understand risks and see danger everywhere. Hyper partisans have their own agenda. I don’t think that they should be the ones educating American society on the lessons of failure.