How Trump is Getting the Game Theory Wrong

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Welcome back to Risky Business, a show about making better decisions.

I'm Maria Konikova.

And I'm Nate Silber.

Today on the show, we'll talk about the markets and how they're reacting to recent actions by President Trump.

I'll just say this much.

I think that Cayman Islands bungalow I was hoping to buy has been undermined by the recent performance of my 401k.

On a brighter side, Nate, you might have a chance to go to an island off the coast of Mexico because after that we'll be talking about the return of Billy McFarland and Fire Festival Take 2.

Can we pause the show so I can book my ticket right now?

Let's do it.

We're back.

I have a I have a one-way I don't even want to stay there, right?

I don't even want to book a return flight.

It's yeah, so we're now

all

prepared for Fire Festival 2 and let's talk a little bit of markets first.

So, right now, as we are recording this, it is Tuesday, March 4th.

And I'm saying that because, Nate, you and I have both seen, I mean, the world has seen that economic news in this administration changes very quickly.

So, it's very important to put this in context.

So, today, Tuesday, Trump has announced tariffs, 25% across the board against Canada and Mexico, 10%

against China.

Canada and China have announced their own retaliatory tariffs.

The markets are not happy.

Let's talk about what is going on in people's heads.

Kind of what is the decision calculus behind this?

Yeah, I mean, it seems like markets are reacting negatively, which is perhaps pretty reasonable.

I mean, there are various things going on, right?

Markets like certainty.

We don't have a lot of that.

I mean, you know, the stock market is not the economy, right?

I think the stock market sometimes is a better measure of economic vibes and it's a bit mixed.

I mean, if you survey,

look at surveys of hiring managers and CEOs.

I mean, they're generally pretty bullish on Trump.

That's one of his bigger constituencies.

But yeah, look, according to Polymarket, to which I'm an advisor, there is now a 38%

chance of a United States recession.

this year in 2025.

That's way up in recent days.

It had been 22%, which is kind of the base rate, about one in five years.

You go into a recession, the economy can't be forecasted very well more than about six months in advance.

But roughly doubled to almost 40% as a result of the tariffs, as a result of some consumer sentiment data.

Consumers who do not like the Joe Biden economy, according to the University of Michigan's Consumer Sentiment Index, it's now worse than it was last year, which is bad enough to get Biden outed or Democrats, I guess Kamal Harris eventually ousted from office.

So people are reacting to this on different levels of the economy, right?

And the goodwill that Trump has built up with Wall Street types, I think, you know, look, maybe there's some naivete about people thinking naivete or naivete, I don't know, about people thinking.

I say it naivete, but I'm not the

expert on this.

It's a fancy word.

But like people were on Wall Street were, I think, naive about the fact that like, okay, I mean, Trump is a guy who,

I'm not sure you'd always say that he does what he says he's going to do, but like, he's pretty literal about things or some decoding.

And he said, yeah, I'm going to have tariffs in Canada and Mexico, beat up the kids.

And if, if they don't give me their lunch money.

And so the other countries are not happy about all of this.

By the way, we mentioned this last week.

Friedrich Mertz, the new German chancellor-elect, was like, I don't want to have anything to do with the U.S.

anymore, right?

That seemed bad to me, too.

So other countries are noticing

the domestic domestic politics of

giving the bully your lunch money.

So the different levels of this, but nobody likes this phenomenon.

No, nobody likes this phenomenon.

And I think the markets have, you know, it's very funny, Nate, because the markets, I think, are yo-yoing much more than usual because of the uncertainty.

And no one knows, you know, what the hell is going to happen, what Trump is actually going to do, because they really, after the initial, right, you remember they went down

back in February, when Trump was saying, oh, we're going to have tariffs.

And then they like rallied and they more than rallied.

They went crazy, right?

When it was like, oh, right, we, we always knew that they were going to not, you know, not have the tariffs.

They want to believe, right?

Like, I think that there's this market sentiment.

They want to believe in Trump.

It's kind of what you were saying, that Wall Street has been on his side and they want the markets to rally.

And so they've taken every excuse to try to rally.

And now it was like, oh, shit, right?

The tariffs are actually being implemented.

And he said they're like done, right?

We've implemented implemented the tariffs.

The trade war has started.

And part of me is like, guys, like you should have foreseen this, right?

This should have been built in.

You should have known this was coming.

So now we're seeing this huge correction.

Actually, NATAC is in a correction.

by the technical sense.

So we've officially entered a correction.

And the, you know, the reason this is happening, I think, is because of this disconnect, right?

You want to believe in Trump and then he does something like this and you're like, oops, shit.

Like he said he was going to do it and then he actually did it.

He didn't listen to reason because i think that people misunderstand that he's actually going to kind of listen to advisors listen to this and realize this is not the good thing that you think it is for the economy right inflation is going to go up prices are going to go up uh tariffs on china not a good thing because prices are going to go up um you know our our exports are going to suffer there's there are so many downstream effects um and people have been saying, oh, he'll understand and he won't actually do it, but he did it.

I think a broader point, though, is that

I actually like, I think that Trump is misunderstanding kind of the game theory of what he's doing.

So fundamentally, you know, we talk about game theory a lot on this show.

Fundamentally, what you want is,

you know, you need, in order to figure out the game and the strategy, you need to figure out what the payoff matrix is, right?

Nate, like, that's number one, right?

Like, to know what game we're playing, you need to figure out, okay, what are the payoffs, right?

What is the structure of the game to figure out what quadrant do I want to land in?

What do I want to do?

What do I want my policy to actually accomplish?

And in everything, so I think the economy is part of this, but we're seeing this with just Trump's America First policy in general, with him kind of burning alliances with the

outrageous way that he behaved towards Zelensky, like.

going back on U.S.

promises, basically just burning bridges left and right and saying, we don't need allies.

He's behaving as if, oh, we don't need Europe, we don't need China, we don't need Canada, we don't need Mexico, like America can do this alone.

And I think that it's a misunderstanding of the payoff matrix.

I think that he actually doesn't understand that

something that

all Republican presidents have understood up until this point, which is that America, first, you need the alliances in order for security and American prosperity, that you actually can't go it alone.

And that you have,

that's a fundamental miscalculation of the game that you're playing.

And he thinks that, you know, if I if I try to bully everyone, then all of a sudden, you know, I'm going to be kind of king of the world.

And that's not the way that it works.

That's not the way that people respond.

And I think that he's going to end up in the wrong quadrant.

And unfortunately, you know, America with him

while these policies are in place.

And you'll see that in economic blowback.

You'll see that in political blowback.

You'll see that probably in a recession.

You'll see all sorts of downstream effects of these policies that I don't think, I certainly can't even begin to imagine what that's going to look like.

But it does come from this misunderstanding of what truly America first would mean, right?

What do you need

in order to get into the quadrant where America is doing well?

And thinking that you can do it by yourself by burning all bridges is wrong.

We're not

asking

Trump to put anyone other than America first, right?

We're saying that like Trump's, first of all, a lot of people this misunderstanding, misunderstanding, right?

They assume that game theory only applies to zero-sum games.

And I guess it's narrowly true that the first problems in game theory concern primarily a zero-sum games, but most games are cooperative games or they're mixed games, right?

We're like,

we have, if you and I are like

negotiating together a contract, let's say a sponsor wanted to sponsor the show, but they wanted to negotiate with us like individually and they had like a fixed pool of money, right?

So we both have cooperative and adversarial incentives.

Um,

you know, on the one hand, we both lose if we do, you know, let's say we just do some ad reading in the show, right?

We both lose if the deal breaks up because we can't come to an agreement.

On the other hand, we might have some trade-off between what you want and what I want.

You know, most games are kind of more like that, right?

And like the game of like international trade, if my country manufactures

autos really well, and your country has really nice coffee beans

just based on the factors of production in our respective markets.

Like,

you know, if I'm shitty at making coffee, what country is bad at making coffee?

Who's bad at making coffee?

I mean,

let's put Germany.

There's, I don't think there's a thing that Germany does not grow coffee, and I don't think there's Germany good at cars, bad at coffee.

There you go.

Yeah, the German, do you want the Germans to make their own coffee of their own?

Have you ever had fucking like tacos in Germany?

It's a disaster, right?

We want Germany to import coffee and tacos and sell pharmaceutical shit and like cars and watches and all the things that Germans are, you know, pilsner.

We want trade, right?

That actually is not zero sum.

Even the prisoner's dilemma, the most famous problem in game theory is actually about what happens when people cannot cooperate and they behave zero sum because they think they're going to be cheated.

Yep, exactly.

Exactly.

I think that's also a misunderstanding of the prisoner's dilemma.

And by the way, game theory, and we talk about the game, the prisoner's dilemma a lot because that's kind of the most famous game, but game theory is not just the prisoner's dilemma, right?

So many people just think that, oh, game theory, prisoner's dilemma.

No, there are so many coordination games.

There's so many, you know, there are so many different games at play here.

And, you know, what

Thomas Schelling could have got the Nobel Prize for was describing that, you know, all of these strategies are incredibly nuanced and that you're like the madman strategy is, you know, what happens when you act like a madman, literally, that, you know, you could, you're capable of doing anything.

Like, sure, I'll rip out my steering wheel so that I can't actually

have my car veer off course and I have to go straight.

Sure, I'm going to drop the nukes.

I could do anything.

It might work in a very, very limited scenario, but it can also lead to the end of the world.

And it's not a good strategy, right?

Like at the end of the day,

that's not how you're going to accomplish your goals.

That's not how you're going to put yourself in the winning position.

And so I would even argue, like, like you said, we're not saying put anyone but America first.

Like in order for America to prosper, you need to coordinate, you need to cooperate, you need to forge alliances.

Like that is the backbone of the global order.

And that's why America has been doing so well, because it has had this sort of kind of benign influence and people have built up goodwill.

And that evaporates in a second.

And then what happens?

Right.

What happens when you try to be kind of the bully and the person who says, you know, do what I say or else?

And people realize, oh, we can't trust you, right?

Now you're actually forcing people into exactly what you said with the prisoner's dilemma, where it's in both people's interests to try to coordinate, but you can't because you think that you're going to be cheated.

You think that you cannot actually, you're not talking with a reliable partner.

I mean, that's everything.

We're also in a repeated game, right?

This is not a one-shot game.

This is the global order.

It's a repeated game.

Reputation matters.

Reputation is crucial when you're playing a repeated game.

Yeah.

And if you look at like empirical deviations from game theory, or maybe they're kind of like rational, like on a deeper level, right?

There are two primary characteristics, which is that at first people are actually

more cooperative in the prisoner's dilemma than game theory might predict, right?

They kind of assume, hey, even without any explicit coordination, that we're all shared humanity and these people are probably going to help a stranger out as a default, maybe, right?

But then when they feel betrayed, people really seek revenge.

And you could argue it's rational over some very long run period because that like, if you seek revenge, even to your own destruction, then people will be much more reluctant to fuck with you.

But revenge seeking seems to be like

very ingrained.

And also like, I've been trying to think about like the analogy of

Canada and Mexico and what position they're in.

And like, yeah, you can use the analogy of like, they are

the bullies.

But it's like more like

they get it both ways, though, right?

The analogy is more like, maybe you have like a boss does a little bit of sexual harassing here and there, right?

And you're like, well, do I want to like

blow up my employment or cause a whole controversy by pointing out that this is inappropriate conduct, right?

But also like,

maybe their like coworkers are like super concerned concerned about this kind of thing, right?

And the coworkers say, if you all send it to the boss, we're going to disown you and ostracize you.

Right.

So, like, you have, like, they're really kind of not in a good position either way.

It's often about kind of calculating what the least worst outcome is.

This is not a good thing for Canada and Mexico.

It makes all their options worse.

By the way, some of the reason why the bullying, why he is bullying them is because like Canadian and Mexican imports are like 2%

of U.S.

GDP each, like 1.5%

or something.

We make a lot of our own stuff.

We're a big country.

We have other trading partners, although many of them are also under tariffs or threat of tariffs.

But, you know, if we had to go it alone, it might be enough to put the economy into a recession.

But like for Mexico or Canada, if you shut off the borders, it would send them to a profound crisis.

There might be spillover effects.

But we are the more powerful entity in this scenario.

But still, yeah, even in poker,

the big stack doesn't want to

unnecessarily antagonize the short stack.

And even the big stack would rather not get into unnecessary confrontation.

Absolutely.

And if the big stack misplays that, so a lot of people, once they get a big stack, they just, they think that you're supposed to bully everyone, right?

You're supposed to raise every hand, especially if you're getting, if you're on the bubble, which is the money point of the poker tournament

or the final table, you know, they just go crazy.

And that's how they bust and lose their big stack, right?

Because people start seeing what they're doing.

They start fighting back.

And small stacks have a ton of power, right?

Because if you are a big stack who's constantly opening and I have, say, 10 big blinds, I can shove on you.

And

if you're, you know, once that happens a few times, you either have to fold, right?

And there goes two big blinds or however much you raised, or you call me and I actually have a hand and you lose 10 big blinds, right?

And now I'm suddenly a 20 big blind stack.

And this can happen over and over.

And I've actually seen really big stacks just dwindle instead of becoming big when people realize that, oh, hey, hey, I can push back here, right?

I have a perfectly sized amount of chips to actually really be in a position to fight back because I can hurt you.

And instead of a chip leader, you're going to go to a medium-sized stack.

But yeah, no, that's a very big misconception.

And just to go back to what you were saying a little bit, you were talking about the evolutionary psych of game theory, but there's actually also just some, you know, straight-up history of game theory when computers and different strategies were set up against each other to try to figure out what does the best.

And first, the first strategy that ended up doing well, so this goes back to your kind of retaliatory thing, is tit for tat, right?

So you start off cooperating, and if you know, if the other person cooperates, you're in a cooperative loop, right?

So

you end up in this cooperative loop, everyone's great.

If they stop, then tit for tat, right?

So if they defect, then you start defecting, and all of a sudden, you know, you're in a tit for tat strategy.

You're no longer in a cooperative roof.

So that strategy won.

And then another strategy beat it.

And that strategy was, instead of tit for tat, tit for two tats.

So basically,

you let that harassment go on a little bit, right?

You give them a shot.

So you don't defect immediately.

You actually kind of wait because what if that defection was a mistake, right?

What if there was something else going on?

What if, you know, the person got distracted?

Let's give people a better shot.

And tit for two tats ended up being the winning strategy.

So that was kind of the

thing that beat everyone.

And, you know, but clearly, like, at this point, we're not in that anymore because at some point you do have to retaliate and you're out of the cooperative spiral.

And those strategies, by the way, do a lot worse, right?

So those are not winning strategies.

So

it's, I think that's kind of where we are.

And we'll be right back after this break.

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When you're talking about human nature, the other games that we should just talk about a little bit, there's a lot of work that's been done on things like the dictator game, right?

The dictator games say I have 10 points, Nate, and I get to award them between you and me.

And I can take all 10 for myself, right?

And

people don't do that.

People are actually, and I can take eight for myself and give you two, or I can be like, oh,

right, I'll take seven for myself.

Fine, I'll give you three.

But people end up being much more fair than, you know, game theory would predict just in a pure self-interested way.

People end up, you know, giving pretty equitable divisions, right?

It's actually very close to like, okay, I'll give you half and I'll keep half because

we're not monsters and people are actually pretty generous in those types of situations.

And especially if this is a repeat game, reputation, repeat interactions, our first impulse isn't to be like, I'm going to take it all for myself, even if I don't know that I'm going to be playing with you.

Because I also think that it's a reputation in your own head, right?

You don't want to think of yourself as the type of person who's going to take all 10 points for themselves and just screw

the other person in this interaction.

So I think there are some really interesting findings from those kinds of games where you see that people's tendencies tend to be much nicer.

But I think Trump would take 10 and give you zero and say that that serves his long-term interests, not realizing that that's going to piss you off, right?

You're not going to be happy when you get zero.

You're not going to be happy when you get one.

He's like, okay, fine, you can have one, right?

Like you are also not going to be happy in that scenario.

And that's going to have very real long-term consequences.

Yeah.

And the line between altruism and revenge, I think, is actually often kind of thin.

Right.

Yeah.

You know, you say, I am going to seek revenge to defend my people and my way of life.

Right.

Sacrificing yourself and maybe

dying a hero or whatever, right?

Like that's, I think, actually kind of part of the same instinct.

And people don't like to be put in a place where they have fewer options.

And this shit builds up over time, too.

Maybe one reason why two tits for a tat, this sounds like X-rated.

I know.

Two tits for a tat.

I'm not the one who named it.

I'm not the one who named these strategies.

You don't want triple tits?

I don't know what's going on there.

But like, but like, it's much harder to rebuild trust than to undo trust, right?

Yes.

That's a fundamental point.

You know, if you're in a close relationship and you catch a partner cheating on you, then

it takes a lot of convincing that that won't happen again, right?

You might overlook the first one for whatever reasons, but like the second time, there's no fucking hope to like rebuild trust unless

there's many years of,

you know,

cooperative behavior potentially.

So like, I think Canada and Mexico have like not been a rational say.

And Trump is like

erratic.

Some might say he's a madman, right?

That has a slightly different connotation in game theory.

It can mean that like, because you're unpredictable, that can serve as an effective deterrent sometimes, right?

But I think not in like this more kind of pedestrian territory of like, because Trump is not threatening

mutually assured destruction, right?

If we completely cut off permanently imports of Canada and Mexico, that would hurt the economy a lot.

in the short run, but like America could survive like that and eventually replace the production, et cetera.

So it's not like mutually assured destruction, but like, but he is erratic.

Maybe in the stupid analogies before, like the

boss was having a bad day or was ambiguous, right?

I mean,

Trump and J.D.

Vance, et cetera, sometimes try to maintain some degree of ambiguity.

I think one of the things they're bitter about, they'll like say something outrageous, but like not

quite,

you know, but it's said jokingly, right?

And

the libs always take it super literally when maybe they shouldn't.

And so like they play with the ambiguity in a way it's like, I think a bit effective sometimes.

But now, you know, Canada, Mexico, like, I mean, what are they supposed to do, right?

Like, you can't like,

I just thought this was like, there wasn't really even like a pretext for why we're re-establishing the terrorists.

I think the market, and I wrote this at the time, so this is not me in hindsight bias, right?

I think the market at the time was naive to assume that like postponing these things for a month was a good sign, right?

And that, and that, you know, the Trump of like the second term seems much more determined to

blow the world order up, right?

Yep.

He's not bluffing as much.

He's being advised by people who are

maybe more

deranged in some ways, I think, right?

No, I mean, I think it is, it is kind of exactly what you're saying, blowing up the world order from the inside and, you know, from the outside, because he's doing it both within the country and outside of its borders.

Canada, Mexico not being irrational, China not being irrational at all.

Ukraine not being irrational because

the only way to kind of stop bullies is to grow a spine and to actually try to stand up and try to get them to honor their guarantees and to be like, hey, you know.

The Zelensky meeting

was was interesting.

I think it was probably one of the lowest points in American foreign policy in history.

And it was televised.

It was

a spec.

I mean, Zelensky did

have this, you know, I'd put it like this, right?

There was some element of pride.

I'm not sure I'd say it's revenge, but he thinks that like, so first of all, he thinks that like deals involving Russia without security guarantees are, and he was saying like, look, Russia has violated these agreements so many times.

They're not trustworthy at all.

And I'm kind of like

sitting here smiling and nodding to sign this agreement that I want.

Right.

But I'm listening to all this naive bullshit about Russia.

And Trump and J.D.

Vance don't seem to, don't seem to understand it.

Or if they do understand it, I mean, J.D.

Vance is a, they're all different.

The track is a lot of people.

I don't understand J.D.

Vance.

Can I interrupt you for a second?

Like, Trump, I get, okay, like, he's just being an idiot.

But, like, J.D.

Vance went to Yale Law.

Like, doesn't he know history?

Like, I thought that he would be a little bit smarter in terms terms of understanding that sucking up to Putin ain't it, right?

I just, I thought that naively, perhaps, that J.D.

Bance would have a better grasp of the history and the game theoretical dynamics here and realize that to get where he wants to go, appeasing Putin is not maybe in the immediate, immediate term so that he stays as VP.

But I just like, you know, seeing this makes him seem a lot dumber than I thought he was.

One thing Trump is very consistent about is that if he gets on his bad side, unless there's some very naked strategic incentive to re-cooperate, right?

Like,

you know, he doesn't give people a lot of room for discrimination.

It was fascinating, by the way.

I would recommend watching the whole Trump-Zelensky meeting, in part because of like the body language.

And you see kind of like

Zelensky is increasingly gently, but less and less gently trying to suggest that like

Russia is not a reliable partner.

And then you see Trump kind of, who starts out like patting him on the back, literally, right?

You see Trump's body language kind of change and he's like, I'm going to give you your one time, right?

You tit, but if it's a double a tit tit, right?

But it's an example of how like, like, I'm not sure if he was acting narrowly rationally, right?

You probably just have to suck it up if you're being narrowly rational.

and suck it up and then later on you can yell at Trump on the phone or probably go through an intermediary or have Makarubio and the Ukrainian counterpart duke it out or whatever it else, right?

But like, you know, I think he had like

some trouble

sucking up his pride and kowtowing to this bully who was who is, you know, naive about like Russia's willingness to go along with these with these guarantees, right?

And like, I'd be like that, man.

This is why, like, this is why I'd be a fair couple of fucking, I'd be like, fuck, you know what?

I'll listen to this bullshit, Donald, for half an hour now.

And like, give me a fucking break, right?

I'll do it in front of all the cameras.

And like, I, I would, you know, my country would probably get like nuked as a result.

But like, but you can, you can respect Zelensky as a human being and also understand he's in a terrible position.

And he's probably right on the merits, right?

But like, but like at the same time, like, um,

I actually watched.

No, I, I, I disagree that he should have just sucked it up because

that's, that's also that he's, he's between a rock and a hard place, right?

He needs help, right?

But sucking it up with no security guarantees from the United States would have been, I think, also an absolute disaster and a disaster for kind of the world order.

So I think in a way, what he did was more altruistic

because he's kind of, he's still trying to kind of stand up, like put himself, because Ukraine has been kind of the one thing that has been stopping World War War III and Putin's takeover of Europe.

It's hard for people when they experience a worsening of their situation, their expected value to prefer, right?

It's hard for people to distinguish between relatively more bad and relatively less bad options, right?

You know, you'll sometimes see like a poker player kind of like

put money in at the end where

they don't think their opponent is bluffing.

They're really disappointed by how the hands played out, right?

And they kind of can't quite admit that their situation

worsened.

And they almost punish themselves saying, okay, I'll call.

Against someone that if they kind of

detach themselves from the situation would say, yeah, that guy's never bluffing or bluffing half as often as he would need to be to make that call correct, right?

Like that situation is

tough, right?

I mean, you're experiencing a loss of esteem.

People are yelling at you in your country for things going badly.

The reverse, too.

I mean, I think people sometimes underestimate

when

you have an increase in your welfare, your EV, and you have multiple good options, people, I think, are also sometimes like not opportunistic enough about saying, okay,

really good option A is actually a lot better than merely pretty good option B, and you don't have a situation happen all that often.

So like take time and think about that and maximize when you can, you know.

But like apart from, you know, people are good at comparing good versus bad.

Degrees of goodness versus degrees of badness are harder for people to deal with.

Yeah, for sure, for sure.

And this is, but

I think that we're, we're, in a, I think we can both agree that we're in a very bad situation right now.

And the game theory is not looking good.

And we're not in a very good cooperative spiral when it comes to anything, you know, economy, foreign policy.

So let's see what happens.

And yeah,

let's see where we are next week.

On that note, Nate, do you want to take a little break and talk about the Fire Festival rebirth?

Let's do it, Maria.

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So, Nate, I was, you know, I should not be shocked.

I wrote a book about con artists and about how they operate and about, you know, how the whole world works, but I was actually a little bit shocked to find out last week that Billy McFarland, who went to prison

after

he had tried to organize this music festival, the Fire Festival, it sparked not one but two documentaries about it, where he promised this luxurious getaway, you know, luxurious island, all this amazing stuff.

And, you know, it was a complete fraud and fiasco.

No music, no food, no transportation, no housing, no, no nothing.

Anyway, dude went to jail partly for wire fraud.

While he was in jail, by the way, he ended up starting a ticket-selling business,

which ended up getting him an even longer sentence because that was also fraudulent.

So he just doesn't give up.

He's now out.

I think he served a little bit less than four years,

and he has announced

Fire Festival 2.

Are you going?

This time.

There's going to be a risky biz

pop-up there.

Exactly.

It's going to be at Playa Fire

on a Mexican island called Isla Mujeres, the island of women.

I mean, it's not surprising, Maria, I think you'd say that like

Billy, friend of the podcast, I'm just kidding.

It's not surprising that like a con artist would want to like try desperately to like run back the con, right?

I mean, that seems like typical.

Absolutely, absolutely.

And so he owes a lot of money, right?

He owes millions of dollars.

for in restitution for kind of the the money lost in the fire festival.

And he is now so they do you want to guess um what the ticket price is so there are 2 000 tickets available to fire festival too um and there's a range of ticket prices we're uh we're at a floor of 1 400

and a ceiling of 1.1 million dollars

and he is promising the exact same shit that he promised last time that you're going to have an you know artist palace all this like amazing stuff vip experiences none of this has been built And by the way, Mexican officials have said, hey, no one has applied for any permits.

Like we don't know about this.

We have zero applications for permits to do this on Islam.

And apparently, even if you go to the GPS like little pin that he put on the website, it drops you into the ocean, which probably is much more.

par for the course than being dropped on the island itself.

So that's actually probably the most truth-telling part of all of this.

It tells you exactly where you're going to go.

And I will not be surprised.

So normally I'm firmly, firmly on the side of victims.

I was firmly on the side of the victims of the fire fraud

because, you know,

they didn't know it was going to be a fraud at that point.

It seemed, you know, there was jaw rule, all of these people endorsing it.

You know, who, who the hell knew who Billy McFarland was?

Like, if they want to spend money to go to this amazing experience on the island in the Bahamas, amazing, right?

Like, that's good for them.

Like these are not, don't judge people because they want to go to a fancy music concert.

Like that's their prerogative.

And some of these people had no money, right?

Like they saved up for a year to be able to go, to be able to go there.

So I was firmly on their side.

However,

if you buy tickets to Fire Festival 2, I'm sorry.

This is, I'm going to go from, I'm no longer going to be a victim advocate here.

This is one of those, you know, fool me once situations and fool me twice.

Like, are you fucking kidding me?

Like, what are you thinking?

Like, con artists, I think I've told you this before.

They have suckers lists.

So, and you sell these for a lot of money, which is people who've fallen for phone scams, email scams, et cetera, in the past.

And these, this, this is a very, very valuable list because they're much more likely to fall for it again if they've already fallen for it once.

So the Fire Festival should have a suckers list if anyone actually ends up doing this again.

Because if someone believes that, oh, well, the first time, you know, he messed up, but this time it's really going to be great.

Man, I've got, I've got so many bridges to sell you.

It's not even funny.

Wouldn't it be like all like New York magazine writers writing ironically detached profile pieces of this?

There's an audience for it.

If I got a ticket for free, I would go.

I would absolutely.

Because there's a performance art element.

to this.

Oh, absolutely.

I would, if someone wants to sponsor me to go to the Fire Festival and write it about.

Maybe I'm not valuing my time enough.

I'll do it.

I'll do it.

It's part of my background.

I wrote a book on con artists.

My next book is about cheating.

I will happily go and cover the fire festival.

So if anyone wants to sponsor me, please, I will not think you're a sucker for buying that ticket.

But something tells me that I might not even get to go, right?

Like, is this even going to happen?

Right.

Like, there have been zero permits.

Like, he clearly wants to raise money so that, you know, he can have money and

he just can't help himself.

What I know about con artists is that they do not go straight, right?

Like they do not magically reform, especially like the ones on the level of Billy McFarland who have been doing this.

people

who talked about his childhood.

I was one of the talking heads on the documentaries.

So I kind of

went in deep with that.

This is a guy who's been doing this his whole life and has been misrepresenting himself his whole life.

He's not looking to become a successful entrepreneur, businessman, event planner.

Like he's going to keep taking his money.

And I just want to know like who is willing to back him.

Okay, let me play Danville's advocate.

Sometimes people like psych themselves out that like they do.

Okay.

It would be such an obvious con that like that's exactly.

Run it again.

Yeah.

Which by the way, in poker is sometimes true.

And sometimes like sometimes being caught bluffing in poker can deter people from bluffing again, right?

I can't think of most other real world scenarios.

But that's very different because in poker, like bluffing is part of the game, right?

And some people, so it's like you're still playing by the rules.

And when you call on someone, you're not.

So

it's a little bit different.

So I think that, think about it.

Actually, I think this is more like...

angle shooting in poker instead of bluffing, right?

Which if you're not a poker player, angle shooting is basically going right up until the edge, bending the rules, doing things that are like, frankly, kind of sleazy and scummy, but you're not technically cheating.

And you're doing it to try to get information, to try to get a reaction out of your opponent, to try to gain an edge in a scummy way.

You're going right up until that point where you can actually be disqualified for it.

People who are known angle shooters, they are known angle shooters.

If you call them out on it, that is not going to make them less likely.

to angle shoot next time.

They are going to try it again and see like, okay, well, you know, nothing really happened.

Like, let me see if i can do this again right like let me see if i can angle shoot again and they're they they keep doing it even if they have known reputations for doing it i think that that's the the better analogy here that we're dealing with someone who just doesn't give a fuck and um and gets off on it and wants to be able to to have this sort of

image reputation because he's not doing this for the money right like he owes a lot of money um he was already in jail um and and i think that

I think the motivations here are quite different.

And

he will keep trying it again.

But as you say,

people do have this mentality of, oh, well, it can't happen again.

So this time, I'm definitely okay.

And you fall forward again.

And yeah, our minds and our powers of rationalization are truly epic.

I want to revisit this, Nate, in

a few months to see if Fire Festival 2 is moving forward.

And I will be very, very curious to know if we're going to have a second documentary made about Fire 2 and the great fraud and how in the world did someone pay 1.1 million for the VIP experience.

On that note, dear listeners, Nate and I are going to go and try to find sponsorships to go and fly out to Fire Festival 2 so that we can tape a risky business podcast from the island of Las Mujeres.

Let us know what you think of the show.

Reach out to us at riskybusiness at pushkin.fm.

And by the way, if you're a Pushkin Plus subscriber, we have some bonus content for you.

We'll be answering a listener question each week.

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Risky Business is hosted by me, Maria Kanakova.

And by me, Nate Silver.

The show is a co-production of Pushkin Industries and iHeartMedia.

This episode was produced by Isabel Carter.

Our associate producer is Gabriel Hunter Chang.

Sally Helm is our editor.

And our executive producer is Jacob Goldstein.

Mixing by Sarah Bruguer.

This is Justin Richmond, host of Broken Record.

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I sit down with reporters and the people who know this place best to connect the dots on why these stories matter to all of us.

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