February 12, 2004

Political Fortunes Reconsidered

As most of my fellow Illinois residents are probably aware, Blair Hull is a really rich man who's spending money freely in his bid for the U.S. Senate. (His television commercials are on the air constantly.) Until now, however, I didn't know that Hull began his successful business career as part of a Las Vegas card-counting ring!

Here's what Joshua Green had to say about Hull's fortune in a recent Atlantic Monthly article:

Trained in mathematics and computer science, Hull became part of a notorious card-counting ring that operated in Nevada in the 1970s. He beat the odds--or, rather, beat the house by shifting the odds in his favor--by devising intricate mathematical formulas that called for a skilled team of card counters to help determine when and how to bet in blackjack. The team consistently turned a profit until one member blew its cover by publishing a self-aggrandizing tell-all book, The Big Player. Hull quit blackjack with $25,000 and a habit of citing the economist William F. Sharpe to anyone who questioned his wisdom in playing cards: "Investing is the sacrifice of current consumption for expected future gain; gambling is the sacrifice of current consumption for expected future loss." Hull always expected future gain. As if to underscore his analytical rigor, he used his winnings to found Hull Trading Co., a computerized options firm that earned him $340 million--and the means to run for the Senate--when Goldman Sachs bought it, in 1999.

Blair's background in gambling seems oddly intriguing, and I was also amused by this passage from Green's article:

Hull is most animated by those aspects of campaigning that can be quantified and formulated. "Politics is very unpredictable," he told me. "More so than blackjack." I asked if he really could write an algorithm to help win the election. His face lit up, and his press secretary winced. "Sure!" he replied. He reached for my notebook and began scribbling as he spoke: "You'd create a persuasion model based on canvassing that says 'the probability of voting for Hull is ...' plus some variable on ethnicity ... with a positive coefficient on age, a negative coefficient on wealth, and that gives us an equation ..." Sure enough, a lengthy equation unfolded across the page that to my untrained eye looked like part of the human genetic code:

Probability = 1/(1 + exp (−1 * (−3.9659056 + (General Election Weight * 1.92380219) + (Re-Expressed Population Density * .00007547) + (Re-Expressed Age * .01947370) + (Total Primaries Voted * −.60288595) + (% Neighborhood Ethnicity * −.00717530))))

Hull looked pleased. "That's the kind of innovation I will bring to problems in the United States Senate."

Hull sounds like a nutty guy. He sounds smarter than most of the other candidates in the race (not that this is necessarily difficult), and I kind of like the idea of electing a nerd to the Senate. Still, I'd rather have a Senator who knows what he's doing...

Reading Green's article, I had to wonder how the other multi-millionaires in politics made their fortunes. If I'm not mistaken, former Senator Howard Metzenbaum got rich by buying up land near airports so he could build parking lots there--a very clever move. Did anyone else make his money through activities as amusing as Hull's or Metzenbaum's? Is the political success of millionaire candidates at all connected to their business styles and strategies?

Posted by Ed at February 12, 2004 01:18 PM
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