November 1, 2016
Your Money And The Election
While the focus of this unusual election has been on the Presidency, it may be more important for your portfolio and your daily economic life to focus down ballot on what might happen depending upon who controls Congress.
If The Democrats Obtain Control Of The Senate
Bernie Sanders, a Socialist, becomes the Chairman of the Senate Budget Committee.
Sherrod Brown, the Progressive from Ohio, becomes Chairman of the Senate Banking Committee and together with Elizabeth Warren, a far left Progressive, will have a free hand in persecuting banks and investment banks. Already, under Dodd-Frank, banks have substantially stopped issuing home mortgages (of the top 10 lenders only one is a bank. Top mortgage lender is Quicken Loans) and lending to small businesses. If small businesses cannot get loans to tide them over until their selling seasons they cannot hire full time employees, hence our part-time employment economy. The economic situation and your portfolio will continue to move sideways or get worse. They have already obtained from Hillary a veto over the next Treasury Secretary in return for their election support.
Chuck Schumer, a moderate, will become the Senate Majority Leader but will essentially be controlled by the Progressive Left, who despite not obtaining the nomination of Socialist Sanders will have obtained effective control over the government. Schumer craves the microphone and the limelight more than the power itself, unlike his predecessor, Harry Reid.
If Trump wins, he has no support from a Republican establishment in Congress led by Ryan in the House and possibly McConnell if the Republicans manage to keep control of the Senate. The House Republicans have an agenda in whitepapers and are in the early stages of translating them into proposed legislation. I think that while Trump will hog the spotlight, the real yeoman work of obtaining legislation will be done by trying to put together a coalition, which will be needed to pass the legislation. Key to this is in the House where the 40 members of the Freedom Caucus have stymied efforts at legislation because of their inability to compromise. This has caused gridlock in Congress and resulted in the need for Speaker Ryan to obtain Nancy Pelosi’s support for legislation, which has resulted in more bi-partisan work than, has been given credit by the Press. I believe the result will be more of the same with very little novel movement out of the Congress, the result being the ability of business to foresee the future and finally choose to make the long delayed capital expenditures necessary to expand and finally hiring the needed full time employees. Full time employees are more likely to spend and therefore help the economy.
If the Democrats obtain control of the House, Senate, and the Presidency, then it will be the third term of Obama on steroids. Taxes will go up, regulations will be issued to affect business hiring and the economy will, as a result, slow down and the flat growth I predicted in the November 2008 Newsletter will continue.
Possible legislation would include failed Obama initiatives such as seizing your IRA and Pension plan (September 2013 Newsletter) and giving you a government pension in return and mandatory distributions from Roth IRA (September 2014 Newsletter).
In Answer To The Statement
That The Wealthy Should Pay Their Fair Share Of Taxes
As of the 2008 filing season the top 1% paid 38% of all taxes (38x), 5% paid 58.7% (11x), 10% paid 69.9% (7x), bottom 50% paid 2.7% (-25x).
How much more is considered fair?
Candidates And Doomsayers
Do you think it is unique that former President George Herbert Walker Bush (Bush 41) refused to support Donald Trump the candidate of his Republican Party and instead said he will vote for the Democratic candidate, Hillary Clinton? Not unique. Establishment figures such as former President Thomas Jefferson talking to Senator Daniel Webster called Andrew Jackson, as the presidential candidate, “one of the most unfit men I know of for such a place. He has had very little respect for laws or constitution. He is a dangerous man.” Of course, Jackson proved to be one of the best defenders of the Constitution in its first 70 years when he moved to crush South Carolinians aiming to block collection of a tariff they did not like. “Please give my compliments to my friends in your State” he told a South Carolina congressman “And say to them that if a single drop of blood shall be shed there in opposition to the laws of the United States, I will hang the first man I can lay my hand on engaged in such treasonable conduct, upon the first tree I can reach.” The South Carolinians reconsidered.
Alarm of other sorts greeted some Presidents who gained office by the death of their predecessors. “Chester Arthur – President?!” was the sentiment commonly said when John Garfield succumbed to an assassin’s bullet in 1881. Chester Arthur was a political hack by any definition and was added to the 1880 ticket for the sole purpose of spreading the spoils among warring GOP factions. But, as President, something approaching civic conscience surfaced in Arthur, and he signed a landmark law that curtailed the spoils system.
A set of warnings accompanied the rise of Ronald Reagan who was both excoriated as a dangerous extremist and a lightweight actor. Despite his two terms as governor of California and his union presidency of the Screen Actors Guild, many remember him for playing second fiddle to a chimp in “Bedtime for Bonzo.” People were often scared to death of Reagan’s cold war rhetoric, calling the Soviet Union an “evil empire” and the “focus of evil in the modern world” sent shivers through those who had thought that détente had obviated such moralizing. But by the end of his presidency, he was actually being criticized for being too friendly with Moscow. Many of his critics no less than his supporters came to rank his presidency as the most consequential since Franklin Roosevelt’s.
All this hardly suggests Donald Trump is the next Jackson, Arthur, or Reagan. But it should remind us that the Republic has weathered Presidents of whom large number of Americans expected the worst. Mr. Trump might be different; he often speaks of himself as unique. But in this regard, he is probably not.
If You Are Still Upset About The Birther Nonissue Issue
Please read my April 2011 Newsletter written because I am an officer of the Court, regarding why Obama was not legally a qualified candidate for President and the Pennsylvania Democratic Delegation’s lawsuit that went to the Supreme Court. I wish that the ignorant journalists would have done some research about the real issue.
History Has A Way of Rhyming
Recently, FBI Director Comey announced a reopening of the investigation of Hillary’s emails 11 days before the election. Hillary has said it is an unprecedented political act, which could affect the election. This is very surprising and shows her lack of political memory in that Bill Clinton’s election in 1992 was widely attributed to Special Prosecutor Lawrence Walsh’s indictment of Secretary of Defense Casper Weinberger only 4 days before the election as a result of the Iran Contra investigation. The implication was that because of the indictment President George H.W. Bush (Bush 41) was guilty in knowing about the Iran Contra dealings. The 4 days did not provide enough time for Bush to defend himself and he subsequently lost the election to Clinton who benefited from the highly partisan Walsh’s action. Weinberger was subsequently pardoned by Bush.
As always, if you have any questions about these or any other matters, do not hesitate to call us.
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