Elites Aren't Much Savvier Than MAGA

The right-leaning tax economist Alan Cole, whom you’ll frequently see quoted in news articles about the federal budget, recently won over $128,000 gambling. Not against poker players, or the house in Vegas, or in any game of chance. Instead, Cole put his entire liquid savings on the line—almost $350,000—betting that Elon Musk was full of shit, and that Musk’s legions of fans were suckers.

This is surely not how Cole would put it, at least publicly, but it’s the truth. Last year, Musk promised to chainsaw trillions of dollars in waste, fraud, and abuse from the federal budget, easy peasy, as the temporary head of a temporary White House initiative called DOGE. Sums that large would accomplish something pretty much unthinkable: reducing government outlays in nominal terms, year over year, such that the Treasury would spend less money in calendar year 2025 than it did in calendar year 2024.

Because he is not a complete moron, Cole understood this was not going to happen. That even if Musk were committed in an above-board way to reducing federal spending—and even if he were to find more in savings than experts believe we lose to waste, fraud, and abuse each year—it couldn’t counteract the tidal forces of an aging population, or the federal government’s fairly steady, year-by-year obligations to the defense and welfare of the country.

So he took the other side of the bet: that outlays would go up. That DOGE would fail on the terms Musk set. And he won.

I don’t gamble in prediction markets, so it would have never occurred to me to search for or try to create this market, and place the same bet. But Coles’s success is enough to make any half-way competent wonk want to develop that reflex: Look for opportunities to fleece suckers. Identify false promises from Donald Trump and his loyalists, then bet against their marks.

What’s impressive about Cole’s haul is the creativity of the method. It takes nothing away from his skills as a tax economist to note that his underlying insight was banal—something any competent, mid-level budget reporter could have told you, with complete certainty.

The revealing thing isn’t that Cole got this right, but how many suckers made the opposite bet without bothering to learn anything about the ways and means of the U.S. government.

Trump administration officials will apparently make all kinds of bets in the prediction markets, including when they have inside information, which is tantamount to stealing. But I’d be shocked if anyone with real experience in Republican politics was on the other side of Cole’s bet, because they, too, all knew Musk was full of shit. They might have lied about it publicly (effectively helping Cole find more suckers) but they wouldn’t have put their money where their mouths were, because that would’ve been a sucker’s bet. If anything, I’d wager a small sum that at least one White House official also made money “gambling” against DOGE.

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This is life in the age of MAGA. Even when there’s a 100 percent chance Trump and the people in his orbit will fail to achieve something they’ve promised, plenty of true believers will bet real money on success¹.

It’s sad. But it’s also somewhat unsurprising. MAGA is a cult, and there’s a sucker born every minute. I am personally more interested in the positions people take when there’s at least a theoretical possibility Trump will succeed. And not just MAGA Republicans, but people of influence and power who aren’t Trump cultists.

For instance, from the vantage point of January 20, 2025, what was the elite view on how likely Trump was to:

• Reduce inflation;

• Reduce nominal prices;

• Maintain public approval for his handling of “immigration”?

Did they have a bead on this stuff?

There was literally no way for Musk to reduce federal outlays, except perhaps in scenarios so catastrophic that Cole and all of us would’ve had much bigger things to worry about than lost savings. But it was at least conceivable that Trump would stamp his name on to the Biden economy, make tweaks around the edges of policy to bring inflation down from three to two percent, step up deportations marginally, and won the long con. No real accomplishments to speak of, but a popular president nonetheless.

This would not have required assuming away the laws of physics. But betting on it would have required total ignorance of his character—the kind of thing you might do if you’d been comatose through his first term, or experienced significant brain damage.