The loan applicant had shaky prospects to say the least. He was more than $500,000 in debt, had fired most of his workers, and looking for a loan of $3.5 million.
The timing of the application--November 2007, right smack in the middle of the credit crunch--wasn't especially good either.
Finally, the chances of the proposed investment paying off looked even worse, with several better-financed operations poised to corner the market. To add insult to injury, the lender even forced the applicant to take out a high-priced life insurance policy as partial collateral.
It's not a bet that many loan officers would have made, but somehow Sen. John McCain was able to get a critical loan that may have well saved his Presidential bid.
In a society that allows risk-taking, long-shot bets sometimes pay off and make people look like geniuses. They can also flop, as the bets on most of Sen. McCain's Republican competitors did, and make people look like dopes.
As Nassim Taleb points out, we celebrate risk-takers when they win, and either ignore or criticize them when they lose. We also ascribe a certain amount of genius and later even a sense of inevitability to the winners, even if there was bound to be at least one winner all along. We shouldn't overlook, however, the role of luck.
