Changing Your Mind

How You Do It

I was ruminating about what it would take for people to change their minds. In Marc Andreessen and Ben Horowitz's case, it was meeting with the Biden Administration and walking out of the meeting knowing they would endorse Trump. Not all of us have that kind of access, so we have to figure out other ways.

Let me explain how it happened to me in a different place at a different time with a different issue. It mimics what is happening in Washington DC today I think. I think it also mimics several different issues in our social dialogue.

In the 1990s, I was on the CME trading floor. I was on the Pit Committee and several other CME committees. We were a member-run mutual organization. You just sort of took for granted that the people on the board of directors and in charge of running the place had your best interests at heart. I had bought a seat for $580k and it was worth about $1.2MM. Business was booming. I was in the Eurodollars trading thousands of contracts a day.

Things seemed pretty placid and just going along.

I had two friends on the CME Board. One was Craig Norris (CRG) and the other was Don Huizenga (ADH). Craig started getting personally attacked by the current chairman Jack Sandner because Craig started asking all kinds of questions about the budget. Don didn’t have a strong opinion either way only because he didn’t have enough information to gauge a good decision. He wasn’t on the budget committee and the way Jack ran the board, people were siloed and kept in the dark.

Craig was a bit of a bomb thrower. Don was not. Both were and are honorable guys. The board room politics bled over to the trading floor and there were brokers who were told not to trade with Craig.

At the same time the personal attacks on Craig inside the board room were happening, a group of traders came together and started throwing real bombs. Don Karel (DJK), Joel Stender (JOEL), Yra Harris (YRA), Howard Siegle (EGLE), Aryeh Shender (JAZZ) and Bill Sheperd (BILL) wanted the books opened. Don was especially virulent in his attacks on our current board in public meetings. So much so that when I first heard them I thought he was totally crazy and not credible.

They put out a publication that cogently listed their complaints, and their issues with the way the exchange was being run. I read it. Chatting with a friend, I was thinking, this cannot be real.

You want to trust the people in charge of things. You want to think they have your best interest at heart. Also, they had created a public persona for themselves in the media which gave them an outsized voice on the trading floor. They were credentialed. They could speak smartly, and they carried themselves impeccably. They knew all the right people and some of the time, they said all the right things. But, behind closed doors, it wasn’t that way.

I think most of us are like that when we looked at institutions in the United States. We want to think the best of them. We want to think they have our best interests at heart. We want to think they are “on our team”.

As I wrote, initially, I thought Donnie was a crazy man. I had known him for years. I sat down, and I went through everything with him.

Why did I do this? Because I owned a seat and it was worth money. Material money to me. Remember, this was around 1995-96. One acquaintance of mine had been involved in the startup of Intuit. At my alma mater, the University of Illinois, Mosaic which became Netscape had been invented and so had Paypal, and other companies. The rise of the internet was a thing and if anyone could figure out how to get the CME on it, it should have been a huge boon for seat prices.

The opposing political side, which was fighting the changes that Don and his crew were advocating for, put out their own publication. It came on a yellow sheet. Almost all of Don’s crew were locals, and almost all the others were floor brokers. You can think of it like today’s political parties. They had their own reasons for doing what they did and they listed them.

There was a third faction on the floor that was probably the highest in population. They didn’t give a shit about internal exchange politics, they just wanted to trade, be left alone and make money. The only time they cared about exchange politics was when it affected their ability to make money. Change a pit configuration, change a tick size, change where a contract month was traded, they were up in arms. Otherwise, leave them alone. Some of them owned seats and some leased seats.

The fight was on.

After listening to people I respected on both sides, I threw my hat in with Don’s crew. Initially, my bias was against them. I totally changed my mind and went all in. But why? When you examined the data, and looked at the underlying trends in innovation and the broader world economy, their side was correct. The other side was wrong.

The exchange was spending next to nothing on any sort of technology that would enable trading. It did spend millions on modernizing the computational and statistical power of the clearinghouse. But, that was it.

There were some pit brokers who would be happy to fill their last order and shut the doors when the world went computerized. They didn’t care about the value of their seats since they were making millions per year filling orders. Because they saw the threat of computers, they were against it. You’d hear stuff like, “A computer can’t finesse an order the way I do.”, and other statements like that. Little did they know that it could.

Locals thought they could make the transition. After all, they were assuming most of the risk. Little did they know that the advantages they had on the floor would be totally wiped away on the screen and their “edge” was gone. They went from being wholesale to retail. If you understand trading, retail gets butchered, cut up, boxed, and sold. I was one of these people. I bet less than 1% of people like me were able to make the jump.

But, because of that, monetizing our seats in a public market became a very good reason to be on the side of computerization.

I ran for the board and was elected and some of the people on the other side saw the writing on the wall. They started working with us to change things, and we changed the course of history. Some of them led committees that worked to change things and did so admirably. It couldn’t have been done without them. We created the largest and most powerful exchange in the world.

If you totaled up the value of all the seats in 1998, it was around $150MM. Maybe someone pays you for that and gives you another $10MM to $20MM for the clearinghouse and cash flow. We actually had a buyout offer from Blackstone in 2000 for around $100MM with some sweeteners that the board rejected unanimously. IBM also looked at buying us.

Today, it’s worth over $80B. If you bought a seat at the low when I was elected in 1998, you might have paid $280k. It’s worth far more than $20MM today assuming you held on to all the stock and reinvested all the dividends. I didn’t but I did okay.

I relay this story because it is a microcosm of what is happening today in the United States as it relates to the last election and our government.

I have friends who look at the Trump nominees and think they are jokers. They don’t see them as credible or serious people. Some look at Elon and Vivek and say they are frauds. They don’t know how to run a company or they earned their money in unscrupulous ways.

The way I see it, we need bomb throwers. Our government isn’t run in the citizens best interests. It is run for personal interests. It’s run for personal grift. See the Biden’s and how they used the offices Joe was elected to. They used their political power to enrich themselves and the expense of citizens and Hunter’s pardon proves it.

Not only that but people have been fed a steady stream of lies by a corrupt media. Lies about Covid. Lies about the earth's warming. Lies about wars and politics in foreign countries. Lies about who pays what in taxes. Lies about your food supply. Lies about medicine and health insurance. Lies about banking. Lies about farm practices. Lies about the safety of citizens. Lies about education. Lies about the border. Lies about government spending and non-government organizations. The agencies of government have been used to attack political opponents. Just the other day, the FBI rounded up more people who were at the January 6th protest. You have been deceived not only by the government but by respected institutions.

In our country, similar to the old trading floor, we have the people who advocate for change pitted against the people who advocate for keeping things as they are. But, a third group is the largest. It’s the people who want to trust their government, and just want to go about their lives and be left alone.

Except, in this fight, they won’t be left alone and they will have to pick a side. In the last election, most of them picked the change agent side because they can see for themselves what is happening around them. They are experiencing it.

The question I ruminate over is this. What will it take for Democrats to change their mind and not follow the misguided leaders of their party into the abyss? What sort of data do they need?

It seems as though Fetterman gets it. He is in a very small minority of one. It seems as though maybe some Democratic congresspeople might get it.

How about Republicans? There are certainly about 16 Senators that do not seem to get it. They are perfectly happy to do business as usual as long as they and their pals make money and retain power. There are certainly Republican members of the House like this as well. They are less easily identified.

My point is this. Everyone will do all they can to discredit every nominee and discredit the $DOGE effort. Some of those same people will say Milton Friedman is their hero without realizing that the $DOGE effort is to implement Friedman’s vision of government!

As the effort goes along and bears fruit, it will be a boon to Americans. Just like our exchange going from $150MM to $80B, American GDP will explode. If we let it.

The forces against us are going to fight tooth and nail initially. It’s up to people on the side of tossing bombs, and the people who want to be left alone to be very loud with our voices. If you want to be left alone, the best thing for you to do is cut the size, scope, reach, and cost of government so you can be left alone.

Some who were on the other side were awakened by the attack on Israel. They were able to look at things differently.

To the people on the other side, I say this. Take a step back. Examine things from a different perspective if you can. You aren’t going to be rounded up and put in camps. That’s a Bill Ayers left-wing idea. Jim Crow isn’t coming back. No one wants that. Abortion will still be legal somewhere in the US so there is no danger there. Gay marriage will still be legal. No danger there. Besides, Trump has gays in his cabinet. He is the most pro-gay President there has been.

Stop listening to your news source if it’s highly partisan like Daily Kos, MSNBC, CNN, the NYT, or any mainstream media channel. Look at the data. Look at government spending and follow the money to the non-government organizations the government funds to see if what people like Marc Andreessen are saying is true.

Like my friends at the exchange who saw the light and changed, you can too. It will benefit everyone, and it will restore faith in our institutions which have been corrupted and failed us.

We cannot continue down the path we have been on since at least 1965 if not before then.