[In]Securities Guest Blog: Don't Know Much by Aegis Frumento Esq

October 9, 2020


Don't Know Much . . .

Last week President Trump found himself at Walter Reed being treated for the virus he insisted would vanish months ago. In the middle of that treatment, and even though he's been holding press conferences about Covid-19 for months, he announced,

"It's been a very interesting journey. I learned a lot about COVID. I learned it by really going to school. This is the real school. This isn't the 'let's read the books' school. And I get it, and I understand it, and it's a very interesting thing, and I'm going to be letting you know about it."  


Let's not quibble that "read the books" school IS real school; learning something by living through it is called experience. But the whole "school" thing harkened back to this exchange between Vice-President Biden and President Trump in the last debate. When Biden obliquely suggested that Trump wasn't sufficiently "smart," Trump gave a malevolent stare and said: "Did you use the word 'smart'? . . . .  [Y]ou graduated either the lowest or almost the lowest in your class. Don't ever use the word 'smart' with me, don't ever use that word."  

It is a point of pride for Trump to brag that he has a "big brain," that he is a "stable genius." https://abcnews.go.com/Politics/president-trump-called-smart-six-times-before/story?id=52209712.  Indeed, Trump has staked his whole self-esteem upon his intelligence. Early in his presidency, he tweeted, "my two greatest assets have been mental stability and being, like, really smart." https://twitter.com/realDonaldTrump/status/949618475877765120And yet, his niece reports that he paid someone to take the SATs for him. 

Although Mr. Trump claims to have graduated at the top of his class at Wharton, there's no evidence of his even having been on the Dean's list. To the contrary, one of his professors at Wharton was reported having said that, "Donald Trump was the dumbest goddam student I ever had." https://www.studyinternational.com/news/trump-student-wharton/.

Of course, he could just release his transcripts, like he demanded President Obama do. But, no -- he has instead threatened to sue any college that releases his grades or SAT scores. https://www.nytimes.com/2019/02/27/us/politics/trump-school-grades.html. The threatening letter that Michael Cohen sent to Fordham is online. https://fordhamobserver.com/38367/news/michael-cohen-threatens-mcshane-over-trump-transcripts/. Note the P.S.: "Mr. Trump truly enjoyed his two years at Fordham and has great respect for the University." Which is kind of like saying, "Fuck you. But with all due respect, ya know."

More recent witnesses to his intelligence have called Trump out as having the understanding "of a fifth- or sixth-grader" or "an 11-year-old," of being "an idiot," a "dope," "dumb as shit," "a moron," and "a fucking moron" (which I guess is a different grade of moron). https://www.politico.com/story/2018/09/04/trumps-insults-idiot-woodward-806455. He has since replaced those with staff who appreciate his brilliance, like his press secretary who announced Judge Amy Coney Barrett was a Rhodes Scholar because she attended Rhodes College. https://www.independent.co.uk/news/world/americas/white-house-press-secretary-amy-coney-barrett-rhodes-scholar-b744442.html.

So it should've surprised no one that Trump's new-found understanding of Covid would lead him to go back to the White House in the middle of his treatment, while undoubtedly still infectious.  Donald Trump has been throwing the White House into chaos for 4 years now, so they should be used to it by now. The White House is now DC's Covid hot spot. Not even Mitch McConnell will go there, because, as he said, "their approach to how to handle this was different than mine." https://www.politico.com/news/2020/10/08/mcconnell-white-house-coronavirus-427997.  

Looking back on Trump's "don't ever use the word smart with me" taunt in the light of all this, I couldn't help but compare him to Otto. Played with hysterical brilliance by Kevin Kline in "A Fish called Wanda," Otto, a dimwit who fancied himself a philosopher, would rage at anyone who dared to call him "stupid." "Don't call me stupid!" was his recurring threat of violence, until his sister Wanda (played by Jamie Lee Curtis) finally told him what everyone in the theater already knew: "Right! To call you stupid would be an insult to stupid people! I've known sheep that could outwit you! I've worn dresses with higher IQs!" 

It's gotten so obvious that even non-political journals of the smart set, like "Scientific American" and the "New England Journal of Medicine," have broken tradition to urge their readers to elect someone else.

Now, I'm not suggesting that Biden call Trump stupid in the next debate, thought that would be fun to watch. After all, Biden's no MENSA candidate either. But the difference between them is not their IQs. It's that Trump thinks he's the smartest guy in the room, and Biden knows he isn't. So while Trump tries to contort idiocy into intellect, Biden is just his imperfect self -- gaffes and all. That's why all the forecasts predict he's likely to win, and to win big. The public can only take so much stupidity.

But Trump's fetish with smartness, like all his faults, reflects something wrong with us too. For decades, we've indoctrinated our children to believe that those who excel academically are in some way "better" than those who don't. In 1960, less than 8% of the population had college degrees, and no one looked down on the 92% without one. By 2019, 36% of the population had degrees, enough that to be un-colleged is now a stigma. And if you are a member of the so-called elite, you can't settle for anything less than an elite college degree, which explains the desperation behind the Varsity Blues fiasco as well as anything.

That there's more to life than academic smarts is nothing new. The idea that "emotional intelligence" is at least as important to happiness first got public notice in 1995, when Daniel Goleman published his book by that name. Since then, thinkers have come to see something even more pernicious in the whole academic enterprise. Because success in school will generally go to those with the economic supports to nurture that success, meritocracy rooted in college degrees becomes an aristocracy by another name. More than a ladder up for the underclasses, higher education is in practice a tool to perpetuate the privilege of those at the top. See, e.g., https://www.theatlantic.com/magazine/archive/2018/06/the-birth-of-a-new-american-aristocracy/559130/.

Just last month, Fredrik deBoer published the most audacious attack on academic meritocracy to date. "In The Cult of Smart," deBoer -- who happens to be liberal to the edge of Marxist -- grabs the third rail of meritocracy theory with both hands bare. He argues quite strongly that academic potential is randomly distributed. Whether because of nature, nurture or both, some kids have what it takes to succeed at college-level studies but most don't, and it's all the luck of the draw. He agrees with others that it is unfair to have a special lane to higher education for privileged kids. But it is also cruel to lead all kids on with the false promise that academic success will come if you just work hard enough, and then to doubly stigmatize -- as both stupid and lazy -- those who just can't do it. But while other critics want to make higher education fairer, deBoer wants to make it less socially important, which of course goes against the entire liberal program of sending everyone to college.

Like many in my generation, I too bought into the cult of smart, so I know what he's talking about. He's right that more of us have emotional and other interpersonal intelligence than have the academic smarts they give degrees for. And what more of us have, what is more equitably distributed, is far more important to a community or a nation. Better than the smarts to solve a quadratic is the heart to feel what wretches feel. The trouble with Donald Trump is he doesn't know much about either.  


Aegis J. Frumento

380 Lexington Avenue
New York, NY 10168

Aegis Frumento co-heads the firm's Financial Markets Practice of Stern Tannenbaum & Bell, New York City.  He represents persons and businesses in all aspects of commercial, corporate and securities matters and dispute resolution (including trials and arbitrations).  He has decades of experience representing SEC, CFTC and FINRA regulated firms and persons in regulatory enforcement investigations, hearings and lawsuits.  Drawing on his five years managing the Executive Financial Services Department of Morgan Stanley Smith Barney, Aegis has rare depth of experience in the securities and corporate governance laws affecting senior executives of public corporations.  When not litigating, Aegis enjoys working with new and existing broker-dealers, registered investment advisers, and private equity funds, covering all aspects including formation, registration, capital raising. Those clients now include industry professionals looking to adapt blockchain technologies to finance and financial market enterprises, including the use of cryptosecurities to represent equity and debt interests. 

Aegis's long and multifarious career includes having been a Managing Director of Citigroup and Morgan Stanley, a partner and the head of the financial markets group of Duane Morris LLP, and the managing partner of Singer Frumento LLP.  He graduated from Harvard College in 1976 and New York University School of Law in 1979.  Aegis is a frequent author and speaker on securities law issues, and is often quoted in the media on current securities law developments.  He is the current Chairman of the Professional Responsibility Committee of the New York City Bar Association.

NOTE: The views expressed in this Guest Blog are those of the author and do not necessarily reflect those of BrokeAndBroker.com Blog.

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