Why don’t more business people and investors vote for a Democrat Presidential Candidate?

Before some scoff at this question, let’s look at some data. We investors and business people are supposed to maximize shareholder and business value are we not? If that is the key goal, would we not want to vote for the party, who on average, increases the value the most? So, we should vote for the Republican candidate for President, as this party has touted they are the party of business and jobs – right?

Well, I hate to burst the bubble of some and surprise even Democrats, but the party who occupies the White House when the stock market performs the best, on average, is when a Democrat is in charge. And, on average, it is not even close.

Per a 2012 study performed by Colin Cieszynski, a Senior Market Analyst for CMC Markets, Canada, when the stock market performance since 1900 is reviewed, there are some surprising results.* Under 734 months of Republican White Houses and 617 months of Democrat White Houses (43 months of President Obama’s term were included), the following results are in evidence:

  • the average monthly rate of return under Democrat leadership is 0.73% per month, while the average monthly rate of return under Republican leadership is 0.38% per month, about half as much as under Democrats.
  • yet, the average risk as measured by monthly standard deviation is less under Democrat leadership, which is the opposite of what you would expect given the above return at 5.22% versus 5.56% under the Republican leadership.

However, let’s not stop there. Under which White Houses, on average, are the most non-farm payroll based jobs created? Again, I hate to burst the bubble of Republicans, but it is under Democrat White Houses. And, as before it is not even close. Using the Bureau of Labor Statistics after 1941 and estimates before dating back to 1921, there have been 12 Republican White Houses and going on 12 Democrat White Houses, with one year to go.** With the counter still running on President Obama’s administration, the following results are in evidence:

  • there have been over 82,000,000 jobs created under Democrat White Houses through January, 2016.
  • there have been just under 36,000,000 jobs created under Republican White Houses through January, 2016.
  • ratioing the two jobs created numbers results in a ratio of almost 2.3 to 1 in jobs created under Democrat leadership than under Republican leadership.

I fully recognize the President position gets too much credit and too much blame for the economy. Yet, they do provide headwinds and tailwinds. I also recognize that individual leaders are different under both parties. Under Bill Clinton, more jobs were created than under any other President and he was the second best President behind Republican Calvin Coolidge during the roaring twenties on average monthly return. Ronald Reagan was the third best job creator, but fell to sixth in average monthly return. FDR rated second in jobs created and fifth in average monthly return.

My point is we should be asking questions as to why this is the case, especially since it runs counter to campaign and party rhetoric. My thesis is we tend to invest in the economy more through infrastructure investment under Democrat White Houses. Not only do these investments improve assets or build new ones, they create jobs as well.  It should be noted that both Clinton and Reagan were big on trade agreements, as well, which fueled growth. While his job growth numbers were low since we were at full employment in the 1950s, Dwight Eisenhower continued investing in infrastructure building off FDR’s new deal and the stock market performed at the eighth best level on an average monthly return basis.

So, what about President Obama? As of January, 2016, there had been just under 9 million net new jobs (counting the lost jobs due to the recession when he took office), which will likely grow to net 11 million or more by the end of his last term. That would place him in 4th or 5th place in net jobs created since 1921. And, through his first 43 months office as measured in the CMC Markets study, he was in 5th place in average monthly return. I have not seen updated numbers, but he would still have a pretty good ranking, since the stock market has doubled while he has been President.

So, back to my question. If the goal is to make money, then on average the party that is the better enabler is the Democrats based on these economic measures. Please review the attached sources for any questions you might have.

*http://blog.cmcmarkets.com.au/asset-class/companies/what-does-the-us-presidential-election-mean-for-markets/

**https://en.wikipedia.org/wiki/Jobs_created_during_U.S._presidential_terms

Five questions for any candidate

After seeing the very childish Republican debate which reveals the infighting in the party, it reminded me of the questions not being asked enough or answered when they are. It troubles me that the leading candidate is loud on bravado and quiet on substance. And, he does not like questions which should speak volumes.

We need to think of five basic questions we should be asking all candidates, but especially the ones running for President. We owe it to our country and the rest of the world. And, this goes for candidates of all parties.

Why? Why do you believe that? Why do you say that? Can you elaborate on your position? In today’s politics and governance, if your opponent did something it is by definition bad and vice versa. So, this first question is key.

What? What will you do to remedy the problem you note? It is so very easy to critique, but harder to do. Tell us what your plan entails. Be specific and not speak in platitudes.

How? How will you do what you say you want to do? This is particularly good to ask when what is being advocated is unconstitutional or would lessen our global standing. Or, if the idea is unrealistic.

How long? The difference between a hope and a plan is a timeline. How long will it take? What does success look like? An early critic of going into Iraq and Afghanistan said “be prepared to stay for 30 years.” This lack of definition of success and the time to get there is a major frustration of our troops who are at risk.

How much? Money is not infinite and we do have a building debt crisis. Paying off new things is important, but we must also pay for old things, as well. And, please remember the following crude statement – any dumb ass can get elected saying they will cut taxes. Cutting taxes, in and of itself, should not be confused with good stewardship.

Five questions. They will work on any issue. And, there is one certainty, most candidates will not like answering them. But, for our sake, they must. For our children and grandchildren’s sake they must. We owe it to them.

An old colleague and friend died much too early

My friend Wes passed away at the age of 57 just shy of his next birthday. Wes was one of the smartest people any of us would ever meet, but he was far more than that. He was passionate about his work. And, he loved to learn new things and would relish in either applying the new knowledge or telling you or our clients about it. He would light up a room. He was also competitive.

Wes has had two battles with cancer. He surprised even his own doctors by surviving throat cancer. His positive attitude was noted as one reason. The doctors were so amazed, they would invite him to attend conferences and have other doctors hear is story and look into his mouth. The surgeons used part of his shoulder muscle to reconstruct his tongue. As a result, he had to learn to speak and swallow with his displaced muscle and constantly drink water as he produced less saliva.

The second cancer came along later and would cause him to retire early on disability, much before he was mentally ready. He was battling with this cancer at the same time missing out on plying his trade. The last time I talked with him, he was frustrated as he was not working. Having to go through something like this again was disturbing, especially with the hope of returning to work less available. Yet, when I asked him his opinion on a matter, he again lit up and was a totally different person.

At his funeral this week, the minister spoke of Wes’ making it long enough to attend his daughter Chelsea’s wedding just two months ago. He astonished everyone walking down the aisle with his daughter, leaning heavily on her as he wheeled an oxygen tank on the other side. He could not speak the last few months, but was a furious note writer often more interested in you and how you were doing.

His son Taylor finally betrayed a secret they shared when he spoke at the funeral. He said he and his Dad would wink at each other as their signal of affection. They would often debate issues, but the wink at the end meant, even though we may disagree, know that I still love you.

His wife Charlene is the greatest trooper. Between his two cancers, she had her own illness that took a long while to figure out. So, they shifted roles for a few years with Wes being the caregiver. Yet, when his cancer returned and she was recovered herself, she was the Florence Nightingale. She was there for him until they end.

Two of my favorite stories about Wes involved him being on the phone. We had a finalist presentation he could not attend due to a minor surgery for one of his children. He could call in as it would offer him a distraction while he waited. Wes was somewhat antsy and need such distraction. So, we created a life-size picture of a torso and head shot and sat it in the chair by the phone so they could see the voice in person. The client loved this and it showed we were the kind of people they wanted to work with.

The other involves vintage Wes. He would get so into his subject, he would often times forget who he was talking with. At the end of one call with me late in the day, he was thinking about his wife usually calling him at that time of day and signed off with “I love you.” To which I responded “I love you too, Wes.” He laughed and said that is not the first time this had happened.

Wes, I am not the only one who loves you. You touched many of us with your passion and pursuit of excellence. Your family and friends will miss you.

We cannot rely on Erin Brockovich to save the day

Three recent events have flooded my brain with the need to call out to Erin Brockovich. She is a real life person portrayed by Julia Roberts in the movie by the same name. Not to spoil it for others, but she fights for the disenfranchised whose water has been polluted by an electric utility that denied such linkage. Yet, we should not be made to rely on white knights like Ms. Brockovich, to make business and government leaders do the right thing.

The first event is the most well-known, with the city of Flint facing a huge water crisis when the state of Michigan tried to save money by retapping into water from the Flint River using pipes that had significant lead build-up. The story goes deeper when state officials were aware of issues and did nothing. People complained and they did nothing. The people had tests done by a reputable source and the findings were denigrated. The governor holds much of the blame for letting his state down. Finally, the tidal wave of complaints and notoriety reached a boiling point and something is being slowly done. I think it can be successfully argued that if this was a more affluent community, action would have been taken sooner.

The second event is the continuation of the coal ash leakage in North Carolina. Duke Energy has been ordered to pay another fine for the Dan River coal ash spill last year. In their own documents, the company knew dating back to 1986 that the pipe that breached was not the type that would survive long term. They also failed to spend on at least two occasions $20,000 to fix the pipe as late as 2007. On top of this, the company has continually denied that people living near other coal ash dumps have water that is contaminated. They have been ordered to do something with these sites, but are accused of using faulty data leading them to a conclusion away from moving the coal ash, which is the more expensive solution.

The third event is equally disappointing about a disappointing court case. About thirty Republican-led states are suing the EPA on violating its authority under the Obama Clean Power Plan requirements which phase in changes over time. My state is one of those states, which is odd as we can easily meet and blow past the plan being the 4th most prolific state in solar energy. The US Supreme Court ruled yesterday to freeze the implementation requirement until the court case is completed, a ruling even surprising the complainants. On top of the campaign finance rulings, this may have been the poorest ruling I have witnessed by this court. It is very disheartening and runs counter to what the world needs us to do to address climate change.

We cannot rely on Erin to save the day, We cannot rely on governors to always do the right thing, as it is not uncommon to look to save money at the expense of citizens who are less inclined to vote for them. We cannot rely on business leaders to “be more than profits” and invest in our community and remedy actions when they are harmful. We must pressure our leaders to think about the environment. Truth be told, the groundswell of actions that have been occurring have propelled us forward. In fact, the best thing coming out of Paris is The Breakthrough Energy Coalition which is led by Bill Gates, Jeff Bezos and Mark Zuckerberg. But, we need government and industry to do their part and help, not hinder these efforts.

Our biggest risks over the next ten years, as measured by the World Economic Forum, are actions on climate change and our global water crisis (the latter goes beyond Flint, but we cannot waste water). Yet, neither of these topics is discussed by one political party and the other does not talk enough about them to distinguish themselves for voters. We can ill-afford a President who does not address these issues going forward. And, we certainly do not need one who said “global warming is a hoax invented by the Chinese to steal our jobs” and who unsuccessfully sued the Scottish government to stop them from putting wind mills off the coast of his golf course development.

Do your best to avoid being a pissant

My wife laughed at me the other day, when it was reported someone somewhere took offense at some meaningless comment, gesture or act. She laughed because I said “People need to stop being such pissants.” She said she had never heard me use that term. The act in question was so unimportant I cannot remember it, but it did not stop someone from being petty, having the issue so blown out of proportion that we had to hear about it on regular news.

The first Webster definition would focus on the natural definition regarding an ant who flourishes in the urine of animals and has a unique smell as a result. Thanks to Kurt Vonnegut in “Cat’s Cradle,” the meaning more widely used is regarding something insignificant, small or petty. Lyndon B. Johnson referred to the Vietnam War that way, until it ate up many waking moments in his presidency and was one of the reasons he did not rerun for a second elected term.

The other day I wrote a post on saying kind words to retail clerks, cashiers, baristas and others who serve you. I am also a huge proponent of treating others like you want to be treated. I would presume most people would prefer not to be treated in a petty manner. I presume most people would not want insignificant comments to be blown out of proportion. Being petty in return is not a good use of the offended person’s time either. There are far more important matters to attend to.

In our political discourse, the candidates say childish things about each others, with some making that their platform. They would rather hang a label on someone than discuss an issue. And, the media feeds into this pissant discussion. They will go to a candidate and say “so and so just called you a monkey’s uncle, do you care to respond?” That is not good behavior for a leader or journalist. And, it certainly is not worth hearing.

With the advent of social media, being pissant is more widespread. It can devolve into a media that is representative of middle school. In too many instances, the pissant behavior does not even rank as high school, as it is more in tune with the horrid things that are said by seventh and eighth graders, when the filter between mouth and brain is not firmly developed.

The best solutions to folks being pissant are two-fold. First, do your best to avoid being pissant in the first place. Second, when someone is being pissant to you, don’t bite. Do not cede your control and keep the high road instead. As Dr. Phil likes to say, “keep the high road, as it is less crowded.” Be civil in your response and see what happens.

This may or may not surprise, when I have written to some state legislators, every so often I will receive a pissant retort. My response is civil and fact based. After one back and forth encounter, I shared it with an attorney who was keen on the issue in question. He said, in this interchange, it looks like your roles are reversed. He looks less like an elected official.

So, the addendum to Jesus’ Golden Rule paraphrased above, which appears in various forms in other religious texts, is “Do unto others as you would have them do unto you. And, for my Father’s sake, don’t be a pissant.”

 

 

Sequestration and GOP Candidates Defense Gutting Comments

I find it interesting when politicians and leaders try very hard to load blame on someone else. The rule of thumb is take credit for good things, even if you had a little do with it, and lay blame on others when it does not fit your narrative when you or your party did have a hand in it. Michigan Governor Rick Snyder’s blaming others for the Flint water crisis is a good example. Another is the Republican led Congress blaming the President for the Phoenix Veterans Administration disaster, when the problem has been festering for years and that same Congress just two months before did not pass a $60 Billion plus funding bill to shore up the VA.

On the Presidential circuit, GOP candidates are blaming the President for “gutting” defense, when they seem to forget this unusual word “sequestration.” First off, the military was not gutted and the cuts were based on military leader recommendations given a tighter budget, as a result of the sequestration cuts. But, the Republican led Congress played a huge role in sequestration to cause these cuts to occur, which the Republican Presidential candidates fail to mention.

Back in the summer of 2011, the debt ceiling needed to be increased. Speaker John Boehner and the President worked hard to reach an agreement, but Boehner could not deliver the votes from his strident conservative members. So, they agreed to lift the ceiling, but there had to be a bipartisan committee formed to come up with some plans for budget cuts. If the committee failed to agree, Boehner and Obama set up larger across the board cuts called sequestration that would automatically go into effect.

The two major players felt that if they made the sequestration cuts so onerous, no one would let them happen. Even they underestimated the inability of Congress to do much of anything. The bipartisan committee failed to agree on any actions being split by party lines. So, the cuts went into effect with the military leaders making recommendations based on the reduced budget. Members of Congress had varying degrees of reactions to these recommendations, especially when they realized it meant people in their states and regions being impacted. Yet, they are the ones who set this in motion as they had numerous occasions to stop the sequestration train.

I am not writing this to let the President off the hook for his role. Yet, to assign him the blame alone and overstate the cuts saying they gut the military is a little over the top. I do want people to know that the lack of collaboration and strident views of members of the Republican party in Congress had a huge role in the sequestration. In fact, for most of his tenure as Speaker, Boehner usually got “must-have” legislation using more moderate GOP members to vote with Democrats. In this instance, Boehner did not want to move in that direction to stop the full sequestration cuts on the military spending.

So, when candidates are blaming the President for every so-called bad thing that has happened, you may want to take that with a grain of salt. And, you may want to ask those candidates for a truthful answer on how the economy, stock market, jobs growth and unemployment has all fared under this President.

 

 

The more I practice the less I suck

The above phrase was uttered by Joe Walsh, the legendary guitarist with The Eagles and as a solo artist. Walsh was a guest on Daryl Hall’s show “Live at Daryl’s House,” where Hall has a studio in his mountain house and the crew and guest jam together, then cook and eat a meal. It is worth the watch (see a link below).

After jamming on Funk 49, Rocky Mountain Way, and Life’s Been Good along with a few of Hall’s songs, the group sat down for a meal which they prepared with a guest chef. As they spoke of how they got started in the music business, Walsh regaled them with his story.

In essence, Walsh spoke of an early band where “we all sucked.” This brought lots of nods and smiles. Then, he said The Beatles came out and they learned to cover The Beatles’ songs. He said if you knew the songs, you could get gigs and they began to play more. But, they also had to practice more beforehand. Eventually, they got closer to Malcolm Gladwell’s 10,000 hours of practice, which ironically referenced The Beatles in his book “Outliers.” Gladwell noted The Beatles were sent to Hamburg to learn to play better in front of an audience with seven shows a night, six days a week.

And, he then uttered the above line. The more I practiced, the less I sucked. This succinct lesson applies to far more than playing music or singing. It could be related to golf, tennis, free throws, research, business analysis, teaching, presentations, general medicine, surgery, investing, etc. It could be as basic as driving a car or learning to cook or bake.

If we put in the time, we will suck less. Doing something once, does not make you proficient. It means you did it once. It takes practice to get better at something. Thanks Joe for your music and advice. You no longer suck.

http://www.livefromdarylshouse.com/