Trump Presidency: Wall, Repeal, Tax Reform

The Trump Presidency remains embattled, and a lot of it has to do with his tweeting and ad hoc management style. But most of it has to do with assaults from the media and Democrats in D.C.

 

None of that, however, should be preventing the president from enacting his agenda.  That falls squarely on Congress, and specifically his own party – the Republicans.

 

Despite an inept Congress and assaults from every corner, Trump has followed through on several campaign promises:

 

1)            Rolling back Obama-era regulations, specifically EPA over-reach.

2)            Nominated a true conservative to the Supreme Court in Neil Gorsuch – whose votes have already been recognized as a victory by Conservatives.

3)            Began strictly enforcing our border laws.

4)            Re-affirmed our position of strength in Asia and specifically with North Korea.

5)            Removed us from the Paris Climate Accord.  Even if you support policies to help prevent Climate Change, the Paris Accord was nothing more than a money grab from the taxpayers, with unenforceable guidelines. Additionally, China – the world’s biggest emitter of greenhouse gases – not having to comply until 2030.  The Accord was a joke, and not in U.S. interests.  We have already lowered our emissions more than any other industrial power over the last 20 years.

 

This change of direction is welcome and needed for American interests abroad, and for our expectations here at home.  But these successes are limited, and the broader Trump agenda remains in limbo.  There are three policy areas where Trump must succeed if he is to keep his promises and ensure he keeps his base in 2020.

 

3 Critical “Must-Haves” on the Trump Agenda:

  1. Build the Wall. Nothing represents the Trump candidacy more than his commitment to build a wall on our southern border.  Make no mistake, net migration is down, and many illegal immigrants are returning home.  Just the commitment to enforce the law has resulted in a massive downturn in illegal immigration, so much so that the head of the Border Patrol union was quoted as saying it was nothing short of “miraculous.”  However, the wall was a key component of the Trump agenda, and some would argue the most important.  Mexico may not pay for it, but not building it would be a major disappointment for Trump supporters.  While a wall covering the entire border was always going to be impractical, increased barriers, more wall construction, and fencing – combined with increased border patrol staff and a commitment to enforcing the rule of law, and Trump supporters will be very satisfied.
  2. Repeal Obamacare. After the media scare tactics, the public remembers that before Obamacare no one in America died in the streets.  Most polling in 2007 suggested that over 90% of the public had some form of coverage: employer based insurance, privately held coverage, or a government plan (Medicare and Medicaid).  The Republicans did not campaign on “…repeal and replace,” that is a recent phenomenon.  Republicans told the voters and campaigned on the fact that they would “repeal” Obamacare.  They own the House, the Senate, and the White House.  It will be a failure of epic proportions if they cannot pass a repeal bill, and it will reverberate at the polls in 2018 and beyond.  A vote will be held this week, and all eyes are on the Senate.  Repealing Obamacare is a fundamental tenet of Republican orthodoxy – while Trump cannot force a vote and he needs Congress to take action, failure will be a bitter pill for base supporters to swallow.
  3. Reagan-styled Tax Reform. Part of the campaign platform, Reagan-styled tax reform would be an economic game changer.  Trump’s “fair trade” commitments were perhaps a more recognizable and important part of his campaign promises and platform, but true tax reform has the chance to truly “Make America Great Again!”  The public doesn’t realize we have not had actual “tax reform” since 1986, when the Reagan “Tax Reform Act of 1986” was passed through Congress.  When rates have gone up or down, or like with the Bush cuts of 2001 and 2003, they have been passed through reconciliation, and therefore they have not been permanent.  With all levers of Congress controlled by the Republicans, Trump has a chance to pass meaningful tax reform that can flatten rates, shrink the code, and make the tax system more equitable and fair to middle class voters.  GDP growth that would come from flattened tax rates will significantly increase jobs and wages.

 

Fair Trade, budgets, military and defense spending… all this and much more was and is part of the Trump Agenda.  Sadly, our politics have become more like farce than the serious affairs of a great power.  Trump’s style and the media’s assault have continued the paralysis in D.C., and Congress has been inept in their first 6 months of the Trump Administration.

 

BUT… if Trump and Congress can pass these three items on the agenda, it would go a long way in lowering the temperature in D.C., and satisfying the primary expectations of Trump’s base of support.  These three items are “must-haves” for the public and the Administration.  The country is not tired of “winning” … it is looking forward to it.

Stay In or Get Out

Do you stay in the stock market, or do you get out?  Do you double down, or do you protect your gains?  You can find a leading market expert to tell you to go both ways – stay in or get out – so how do you know what is best for you?

 

The same experts who told you to stay in the market in 2007-08?  Were they providing the same advice during dot.com 2001-02?  Are they saying the same things now – “we’re in it for the long haul.”

 

The analytics have been so worrisome we had to come up with a new way of explaining how stocks could remain on an upward trajectory – hence, the “non-fundamentals.”  P/E ratios, corporate downgrades, massive sub-prime debt… all the markers of a 2008 repeat are repeating themselves today.  Now, is it the “revenge of the fundamentals” –  several leading market watchers continue to flash caution signs.  The market is going to correct… and probably sooner rather than later.

 

What are the top market watchers on Wall Street saying now: stay in, or get out?

 

  1. Jim Grant, Founder and Editor of the “Grant Interest Rate Observer. Appearing on FOX Business Network’s “Morning’s with Maria” – “There is more risk than reward in this market. I say that stocks, at current levels, are worrisomely high. I would say the interest rates are worrisomely low … And I say that now is a great time not to be caught up in the crowd which has to invest as if by compulsion.”

 

  1. John Hussman, famed Wall Street investor, President of the Hussman Investment Trust, and the guy who correctly called the dot.com crash. Hussman stated in an interview with Fortune magazine in March that we are living through the “… the most broadly overvalued moment in market history.”  Hussman predicts a sooner-than-later 60% drop in the stock market.

 

  1. Thomas Kee, founder and editor of Stock Trader’s Daily. Kee is a former broker with Morgan Stanley who managed the 4th-best performing market investment fund in the world in 2016.  Kee states that the market is over-valued by almost 66%, and cites traditional fundamentals such as O/E ratios and liquidity concerns.  His most recent stock report in Marketwatch was telling: “….The risks in the market today are extremely high for buy-and-hold investors because the liquidity picture is changing for the worse, and that is fundamental in nature. But longer-term technical observations point toward serious risks as well.”

 

  1. Doug Kass, President of Seabreeze Partners Management Inc., and regular “Real Money Pro” blogger as a contributor at theStreet.com. “I am positioned aggressively for a Stock Market Correction,” stated Kass recently on the “Real Money Pro” blog. Citing bond prices, bank performance, and sub-prime debt, he believes the effect of the artificial stimulant – money printing, QE and the like – has worn off.

 

Everyone thinks they can time the market… until it is too late.  Some should remain in the market – young investors, those with long time horizons, for example.  Others benefit from having a mixed portfolio.  But everyone should have some portion of their portfolio protected from market losses.  You can still benefit from the gains in the market, but you are protected from the downside.  The data, and the analysts, are suggesting that would be the wise and prudent move.

 

Call now to find out how you can go up with the market, lock in your gains, but then when the market goes down – you don’t lose anything! 877-912-1919

The Top-5 Benefits of True Capitalism

Do we remain a true capitalist society?  Most of us are hoping so. Some would argue we never were, but that is untrue.  True capitalism would not involve a social safety net, but it also would not presume a standing army either.  Because capitalism works best in conjunction with democracy and a free society, it was always possible citizens will vote to tax themselves for communal purposes.  That would include defense and caring for the poor.

 

This bargain between free citizens and their government – granting the elected officials tax money to provide for the common defense and care for the poor – was always the balancing act the Founders most feared.  Considering the risk to freedom, it was never stated any better than by Benjamin Franklin,  “When the people find that they can vote themselves money, that will herald the end of the republic.”

 

From bank bailouts to Solyndra… from increased welfare payments to millions on disability… Obama-phone fraud to Medicaid fraud… our system is beginning to crack under the unrelenting pressure of government debt, regulatory intervention into our lives and property, and crony capitalism.  It is a sad day when it is easier to start a business in Vietnam than it is the good ol’ US of A.  Adam Smith is rolling over in his grave.

 

But if we can get the balance right once again, and if we can find it within ourselves to return to free market principles and the glory of free market capitalism… America will be free and prosperous like we have been throughout our history.

 

Top-5 Benefits of True Capitalism and Their Opposite Disadvantages From the Leviathan Government:

 

  1. Our personal health benefits from capitalism and the free market. Advances in technology (MRI, digital scanning), pharmaceuticals, choices in food and diet, healthy living gurus, personal trainers, online health advice… capitalism gave us the richest, most advanced health system in the world.  Government health?  As the government regulated insurers, mandated services, instituted price controls, and eventually passed the dreaded monstrosity of Obamacare, we have seen health costs spiral out of control, available doctors shrink, services decline, deductibles skyrocket, premiums rise, and what was once the greatest health system in the world enter a death spiral.  Capitalism 1, Government 0.

 

  1. Wealth is created and poverty eliminated. Free market capitalism – as spread like holy writ throughout the planet by the United States during the Cold War, lifted over a billion people out of poverty.  The poorest American lived a life with food, shelter, phone, television, air conditioning… the inequality and poverty in capitalism was usually the youngest entering the workforce.  If you did not break the law, and waited to have children after marriage, then you were literally statistically guaranteed a place in the middle class of American society.  Around the planet at the end of the 20th century, more people had food, shelter, lived longer and enjoyed medical care and resources than at any other time in history.  Capitalism can defeat poverty.  Government welfare?  Not so much.  As American government expanded the welfare state beginning in 1964, and hundreds upon hundreds of government programs to aid those in need were funded, the result was families broke down, and poverty became generational.  We have spent $25 trillion on anti-poverty programs in the last 50 years, and the number of those (as a percentage of the population) in need remains higher than when we started.  Capitalism 2, Government 0.

 

  1. Freedom expands globally. More and more people throughout the world wanted to live like Americans, as our way of life became more and more visible thanks to the expansion of satellite technology.  This was personified in the Nixon-Khrushchev “Kitchen Debates,” which highlighted the affluence of American society over a socialist one.  Not only did the world want to be like Americans, but our affluence helped fund the military prowess necessary to defend not only our country, but most of the free world.  Freedom expanded under American power – funded by free market capitalism.  Government = freedom?   Cue the laughter.  More government equals less freedom.  Government intrudes on how a car is made – that drives up costs and limits choices.  Government increases how much you pay in taxes –  you have less money to spend in the marketplace.  Free market capitalism works hand in hand with freedom… government destroys itCapitalism 3, Government 0.

 

  1. Economic Growth is only sustainable, and real, with free market capitalism. You can’t grow something from nothing.  Government cannot create anything, they must take from free market participants through force, or in the form of tax receipts (also by force).  Without it, they cannot “grow” an economy.  You can manipulate it (regulation, tax rates, interest rates), but you cannot grow it.  Growth comes from the production of tangible goods and services which is then traded amongst market participants.  The freer this process is, the more it will grow.  Capitalism 4, Government 0.

 

  1. Personal happiness emanates from capitalist systems. Free market capitalism provides the goods, services, and choices which allow someone to enjoy their lives.  For those of limited means, capitalism allows them the satisfaction of earning their way on their own, and of climbing up the ladder of success on their own.  In socialist economies, or worse, you find shortages, limitations of choice, and a culture of forced confiscation of your earnings to pay for shared benefits.  This breeds resentment and discourages work, and you see the results as more and more of a country takes on socialist rules and regulations.  It is not just the confiscation of earnings through higher and higher taxes, but the regulations as well, which limit what you can and cannot do, what you can and cannot buy, or how you can buy it.  Government cannot create happiness.  At best, it can take from one person to give to another… and the failure to earn it on their own will prevent the person from truly enjoying someone else’s wealth.  Capitalism 5, Government 0.

 

The Gipper had one of the best quotes:  “Entrepreneurs and their small enterprises are responsible for almost all the economic growth in the United States.”   That is as true today as it was in 1985.  The anti-capitalist protests are posted to Facebook using an iPhone – two great inventions which only occurred through the free market, capitalist system.  Your clothes, your home, the modern inventions that make up your way of life – all are due to the benefits of capitalism.

 

Returning to true capitalism and free market economics may seem like an uphill climb, but each step we take will lead to greater freedom, greater prosperity, and greater opportunities… for everyone!