The Smartest Guy in the Room: Stories about Fact, Fiction, Good, and Evil: Part One

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By Richard John Stapleton

Several times in recent weeks I have been lured into clicking on Internet posts purporting to show the IQ’s of US presidents, including the president-elect now waiting to take over.

You will find over 700,000 results if you ask Google, “What is Donald Trump’s IQ?”

I have scanned several of them but I have yet to find a definitive IQ for any president. Based on one study using biometric data, John Quincy Adams had the highest IQ of all US presidents, 168.  Donald Trump was not included in this study. These IQs are estimates based on biographical data and other historical evidence.

One Internet post asserted Donald Trump had an IQ of 156, which was shown by Snopes, a fact-checking website on the Internet, to be bogus. Most of the posts I read indicate all US presidents have been more intelligent than the average US college graduate.

I have seen Trump in a video extolling his high “aptitude”, which he said he inherited from his parents. He also said in a video he was proud of his German “blood”.

Having little concern about the meaning of words or context, he did not say what he thought his aptitude was for in his video.  One can have a high aptitude for screwing up.  I suppose he was saying he had high aptitude for making money in business and that aptitude would make money for everyone in the US when he took over as president.

I have also read on the Internet Trump only has about a 200-word vocabulary. It’s probably larger than that, but based on hearing him talk many times it seems to me he has the smallest vocabulary of any president I have heard talk, including Bush II.  In general people with high IQs do not have small vocabularies.

Regardless, Trump has told us over and over again in various ways he is very smart because he has made so much money. No one can use the aphorism “If you’re so smart, why aren’t you rich?” against him. At the outset of his presidential campaign he let his Repub competitors for president know he had more money than all of them put together, implying that made him smarter than they were, maybe smarter than all of them were put together.

In the process of running for president Trump talked about the Wharton graduate school of finance as though he went there.  Wharton is a respectable graduate business school, at the University of Pennsylvania, not too many rungs down the business school prestige ladder from Harvard Business School, where Bush II got a master’s degree.  I assumed Trump had an MBA from Wharton.

It turns out Trump does not have a master’s degree from Wharton. He took some finance courses at the University of Pennsylvania, where Wharton is the graduate business school, while earning a bachelor’s degree. It’s unclear whether his SAT, GRE, GMAT or other aptitude test scores were high enough to get accepted into the Wharton graduate school of business, or whether he wanted to get a graduate degree.

We have also been told over and over that Trump is a “billionaire” with no definition of the term and little context. In general a billionaire is a person who has a net worth of one billion dollars or more. Net worth is total assets owned minus total debts owed. There is no way to prove whether Trump is a billionaire because we have no idea what his total assets are worth and what his total debts are. Since most of his assets are land and buildings he can say they are worth whatever he says they are worth, enough to produce a net worth of ten billion dollars, which he has done.

In reality his land and buildings are worth what they can be sold for in today’s market. One analyst said Trump has about two hundred million dollars in cash and liquid assets, not shabby for sure, but that sounds far less “bigly” than billions.

Apparently his parents gave him one or two million dollars or so to play with as a young man after college, telling him he was a king and such, and he lost some of it in failed deals and schemes; but it seems he learned on the job how to function playing a real estate mogul and oligarch role in life, as no doubt his father and mother wished; and eventually apparently some of his deals and schemes paid off, after he smartly learned to always hire the “best” people to make decisions for The Trump Organization.

Trump worked for his mother in her business called Elizabeth Trump & Son, which no doubt included assets inherited from her husband when he died, when the Donald attended the University of Pennsylvania as an undergraduate. He changed the name of Elizabeth Trump & Son to The Trump Organization after he inherited it in 1971.

One article on the Internet posted a few years ago said in the process of borrowing money from a bank Trump was forced to disclose enough verifiable asset and debt data that the bank was able to determine that his net worth was about $700 million, a lot of money, but not enough to be a billionaire, based on a good definition of the term. On the other hand, based on market values for his land and buildings he may be a billionaire now, assuming his holdings could be sold for the asking price.

As anyone who has studied or done accounting knows, it’s not easy to prove what facts are in large businesses, even if the large business hires certified public accountants to audit their business, and even if the audited financial statements are made public. Almost nobody has seen any audited financial statements for Trump’s mainly rentier businesses since they are not publicly traded. Rentier businesses do not produce products; they mainly collect rents.

The fictive business called Enron, in Houston, Texas, named and spelled to sound like Exxon, back in the Bush II days, was run by what business pundits called the smartest guys in the room, until it imploded, wiping out the jobs and retirement savings of hundreds of employees and stockholders; and two of those smartest guys in the room, who had MBAs from Harvard Business School, were sent to prison for faking facts and cooking the books, books audited and certified by Arthur Andersen & Company, one of the five largest certified public accounting firms in the world, that also did management consulting for Enron, which was a conflict of interest. The smart guys running Enron not only ran Enron into bankruptcy, they caused Arthur Andersen to be broken up.

A relevant question is how much net worth did the Donald inherit from his parents after they died. According to Fortune and Forbes magazines Trump’s net worth in today’s dollars is somewhere around three billion dollars. It’s possible he inherited that much wealth from his parents after you compound what he inherited up to the present using historical inflation rates. If so he has not “made” any money on his own.

Nor is it easy to prove what “smart” is, or what an IQ is. My mother told me once, in our lumber yard and hardware store at Wolfforth, Texas in the 1950s, “You don’t have to tell people how smart you are. If you are they will just know it.”

After proving he was smart enough to get elected, it remains to be seen how smart the Donald will be as president of the United States.  Buying his election only cost him about forty-five million dollars of his own money; how much this deal will pay off for him also remains to be seen.

Richard John Stapleton is an emeritus professor of business policy, ethics, and entrepreneurship at Georgia Southern University who writes on business and politics at www.effectivelearning.net. He is the author of Business Voyages: Mental Maps, Scripts, Schemata, and Tools for Discovering and Co-Constructing Your Own Business Worlds.

 

 

 

 

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