Dueling Banjos

In the early 1970s, Burt Reynolds breakout performance was in a movie called “Deliverance.” A highlight of a very interesting movie was a scene where a young boy and one of the adults on a rafting trip played “Dueling Banjos” in a song of instrumental one-upmanship, the boy with a banjo, the adult with a guitar.

It is with this backdrop, that I summarize dueling lies by Donald Trump and Ted Cruz. It should be noted the only truth is they both are lying. The parenthetical comments are the truth).

DT: Unemployment is not 4.9%. It is much higher around 30%. I heard one guy say it was 40% (We would be in a severe depression if that high. 4.9% is the truth per monthly BLS reports).

TC: It would not have been a big deal if we defaulted on our debt in 2013 (Not according to experts and Christine Lagarde, the head of the International Monetary Fund).

DT: We are the most taxed country in the world (Not even close, 27th under one measure and 17th under another out of the top 30 wealthiest countries).

TC: Obamacare has been an utter failure (While not perfect and needing improvements, it has been pretty successful per a number of measures).

DT: 81% of white homicides are committed by black assailants (No, per the FBI it is more like 15% of the time).

TC: Donald Trump has recommended a tax plan that will increase taxes (No, like yours, both would reduce taxes to a degree, that the deficit will be significantly increased beyond the ability for spending cuts to reduce it per Former Republican Senator Alan Simpson and a nonpartisan analysis).

DT: Global warming is a hoax invented by the Chinese to steal our jobs (This may be the dumbest thing said by any candidate topping Ben Carson’s pyramid comment).

TC: I am the best solution to our problems in Washington (My opinion is the only way for Ted Cruz to be part of the solution would be to resign as Senator. He is part of the problem with his obstinance, grandstanding and name-calling).

To be frank, I am unimpressed with either of these candidates. They are both divisive  and not forthcoming with the truth. Trump’s history is one of exploiting others for money and has lapped the field in lying per nonpartisan fact checkers. Plus, he has demonized, mocked and name called several people and groups. Cruz has not only lied several times, accusations of his cheating have merit and he is known for grandstanding and not collaborating with his colleagues.

In my view, the best GOP candidate is John Kasich, but his voice is being drowned out by these two prima donnas. To me, Trump and Cruz’ leading the GOP voter polls is an indictment of the party.

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.

The candidate scared of a woman with microphone

I find it amusing that a man running for President, who is touting how tough he will be with our enemies, is running scared. No, Donald Trump is not scared of terrorists, he is scared of Megyn Kelly of Fox News.

He has taken his sand toys out of the sand box and won’t be appearing on the next GOP Debate aired by Fox. The reason is Megyn Kelly who he feels is biased against him. She just might ask him a question he does not like as she did the last time. Or, as reported this morning, he doesn’t want his competition bringing up milestone statements from his history. His previous stances on issues like abortion or healthcare or his several bankruptcies and numerous litigations, might make him uncomfortable.

Truth be told, The Donald does not like anyone asking him questions. His candidacy is built on a foundation of attitude, platitudes and lies, so when someone asks him a legitimate question, he dodges it and then cries foul or calls him or her stupid, disabled, fat or loser. Like he did the other day with one reporter, he may even ask for an apology. Think about that for a second. Or, like he did with Chris Matthews the other evening, he may just continually not answer a specific question on his error of accusing the President of being born non-American.

Everything a voter needs to know about The Donald’s veracity as a candidate is in his history. Coupling that with his very-unpresidential discourse throughout the campaign demeaning most groups and individuals that get in his way, he does not present himself well as a candidate. Plus, he has even taken a shot at his own followers, in essence saying they are so blindly loyal, he could shoot someone and they would still vote for him. I do not care that he wraps himself in a blanket of political incorrectness, yet he has the thinnest of skins and is very litigious. Being political incorrect does not give you license to lie as evidence by a 76% untruthful record per non-partisan fact checkers.

But, back to the debate sand box. If he cannot stand up to questions from anyone, but in particular, a network female reporter who he also insulted for her earlier questions, how will he interact with leaders of other countries, both male and female? How will he react when Angela Merkel or Christine LaGarde disagree with his position? Will he make remarks about their times of the month like he did with Kelly, say how disgusting it is that they go to the bathroom like he did with Hillary Clinton or call them out on their looks like he did with Carly Fiorina.

People are going to vote for whom they see fit. But, this candidate needs to answer a lot more questions. His history and conduct warrant it.

 

Some hard truths and silver linings

Since we are in midst of a campaign season for the US presidential race, which has been going on forever and we have yet to even cross the halfway point, the real loser in the race has been the truth. In fact, the current leader in the polls on the Republican side has been untruthful 76% of the time (out of 77 adjudicated statements) per Politifacts, a non-partisan fact checking organization. If you are a betting person, the odds would be in your favor not to believe a word he says.

That does not mean the other candidates have not made exaggerations and told a few lies, but Politifacts said the GOP leader has lapped the field. In this crazy race where the attack on political correctness has permitted candidates to be more candid, it would be nice if the candor included more truths. A candid lie told with false bravado is still a lie. But, what do I know? Call me crazy, but I think the truth should be told, and when a falsehood is discovered, the teller should be accountable and correct the record.

A few hard truths for the candidates, supporters and voters:

  • There is little that we can do to stop a motivated terrorist who is willing to lose his or her life on our shores, given our freedoms and open access to weapons. All of us need to be vigilant to report something that looks out of the ordinary and our police need to react swiftly as they did in San Bernardino to locate the culprits to prevent more violence. Our police and intelligence are doing great work, but what scares them most is the under-the-radar extremists.
  • To this first point, the war is on intolerance and extremism, not religion or race. We must live up to our ideals and constitution. We must involve all Americans in this fight against terrorism and not denigrate groups of people. While being vigilant, we must not blow this out of proportion as being done in the presidential race where several have equated it to World War III. Really? These candidates are scaring people into voting for them, but these folks should listen carefully to what the candidates are saying, as they do seem to be making us less safer with less than thoughtful rhetoric.
  • On the good side, the US economy continues to percolate and 2016 is expected to be a good year. This is evidenced by one of the longest successful runs with 70 consecutive months of job growth, unemployment down to 5%, a more than doubled stock market capitalization since the recession and the Federal Reserve raising interest rates. We still need to work on wage growth and middle class, but these have been maligned since the early 1980s with outsourcing, offshoring, downsizing, and technology.
  • The world is making progress in the battle to limit the impact of climate change. The Paris deal is key, but only part of the story. We have reached a tipping point on renewable energy as the cost has fallen and the awareness of the need has risen. Innovation is creating new paths forward and the glut on oil and natural gas has caused those prices to fall which has halted further investment in more costly retrieval of fossil fuels. Plus, the droughts are showing the world that we have a water crisis that will only be made worse by climate change. So, the time to act in a larger way is now as waiting is no longer an option.
  • On the good side, we are working with other countries to try to solve challenges, such as the refugee crisis, terrorism, corruption (where we can), poverty and lack of women’s rights. Opening trade markets with Iran and Cuba are positives that will pay dividends. It is harder to fight someone you have commerce with. And, freer ideas can find their way in. I am actually delighted to see Russia working with us to address terrorism in the Middle East. Terrorism and corruption are the destabilizers there. We must deal with the former first, but not forget the latter. And, entrepreneurialism is helping more women build income in places around the world. Women hold up half the sky says the Chinese proverb, so investing in women will pay huge dividends for a region.

I am encouraged by the progress that is being made. I wrote a post last week about “Year-end Kudos,” but let me restate that the work Pope Francis is doing is immense. He is the greatest, most trusted leader on the planet and he is shining a light on where it needs to be shown. While Angela Merkel is very deserving of her Time Magazine’s Person of the Year, it is the Pope who has shown us our humanity. “Blessed are the peacemakers for they will see they face of God,” I read somewhere. Happy holidays to all and have a wonderful new year.

 

Will I be watching the speed debate?

Although, I must confess mild interest in learning how the GOP debate goes tonight, I won’t be watching. My guess is The Donald will try to look presidential, but will not be able to resist the temptation to fire back at folks. I will look at the highlights reel of the fireworks.Yet, the answer to will anything substantive be discussed, is an easy no.

I say this for two reasons. First, you cannot glean any substance from ten people in that little bit of time. It will be a war of sound bites, yet someone who can coin a clever retort, is not correlated with being a good leader. It just means they had a clever retort. Plus, the leader in the GOP polls is big on saying outlandish things with very little data or substance backing it up. Some of the others have already sunk to his level, so I think you will see a lot of big swings being made tonight.

Second, the issues that are needing to be discussed are multi-faceted and complex, so sound bites won’t cut it. Also, as a former Republican, the GOP is on the wrong side of future history on so many issues, that the real problems are not being addressed by the rhetoric of the candidates. We won’t hear about the need to address man-influenced climate change, but will hear about the jobs being lost in fossil fuel industry. Note, the coal jobs have been going away more due to fracking natural gas, so why has that not been an issue before? Plus, the solar industry jobs are growing at double-digit rates and tally over 170,000 at year-end 2014, so it is not an either/or issue on jobs.

We also won’t hear about the ACA working and how it can be improved, as it is needed tool in the new sharing economy. Without the ACA, independent contractors would not have access to affordable care. We also won’t hear about the huge need for better gun control. We also won’t hear about asset based community development and investing in our infrastructure that will help change liabilities into assets and create jobs. We also won’t hear about how investing in family planning and birth control has reduced abortions, unwanted pregnancies and poverty. We also won’t hear how the economy and stock market have been doing pretty well and unemployment is low.

Yet, I am sure we will hear about the Confederate flag. I am sure will hear about denying rights and freedoms to the LGBTQ citizens. I am sure we will hear about how stupid the president is on immigration, Cuba, Iran, ISIS and Ukraine, yet I applaud his seriousness of purpose to address these problems and opportunities. I am sure we will hear about how the president has let down the African-American community, not admitting the huge role the GOP has played in disenfranchising this audience through unconstitutional voting laws, attacks on support programs, indictment of the ACA, lack of Medicaid expansion in twenty states, limiting wages and lack of investment in these communities and in public education.

So, I will watch the highlights, but avoid the watching their lack of attention to more important matters. I do like that John Kasich made the cut, as he is the best candidate in the bunch, but no one has heard of him outside of Ohio.

The mouth that roared

When you dig yourself a hole, the best advice is to stop digging. We have a Presidential candidate who seems to be unable to learn this lesson. He does not realize his major character flaw is his mouth won’t stop talking, so he is destined to repeat this process over and over again,

Coupled with an unhealthy self-esteem and a heavy dose of petulance, and you have a recipe for a prima donna, not a president. He will likely stay in the race, as being told that it is time to drop out would not sit well with that large ego.

Yet, based on this past weekend’s events where he made very inappropriate remarks about a war hero, his chances of winning went from slim to none. In other words, you can stick a fork in him, because he is done.