Tuesday, November 22, 2016

About the recent elections in America, and the new realities

I'm sure that many others of my followers expected a different result for many of the candidates and propositions on the ballot. So did I. Pundits seemed to believe the elections would yield a different result, and that influenced my expectations as well.

Where I live, in California, may friends and others were absolutely shocked. Since the pollsters are rarely wrong, this added to their dismay. But, we've all learned something important, and now we are adjusting our view of our own country slowly, to match the result.

It doesn't really matter who you voted for. It matters what your values are, and where you think this election will take your own family's finances. As a former economist and faculty member of a highly respected graduate business school, I predict the next four years will mirror the economics of George W. Bush's administration.Almost all of our portfolio is now inside our new home, and we live in our portfolio, so its value isn't as important as its functionality. We have almost nothing in the stock markets. If your pension fund is in stocks, you might feel nervous. I would, especially if you plan to retire anytime in the next decade.

Trump is the first President-elect since Eisenhower who has no elective experience prior to winning the Presidency. But Trump claims he can improve our economy, especially for aging white males. I'm sure this won't happen. It is nearly impossible for any government to single out one segment of the population for more than its share of economic expansion, and the harder an administration tries, the more of the wealth ends up with the richest 1%. That, sadly, is the experience of our country. Only when the entire economy rises is there any benefit to the poorest of us. Our tax laws are written this way. And, a flat tax will not change the problem. It will, in fact, exacerbate it. The inevitable result will mirror what happened nine years ago. And we barely escaped oblivion then.

As far as the political environment is concerned, I believe 2016 America looks a lot like 1932 Germany. This is something we will all have to come to terms with. Politics reflects human nature, not the other way around. Many of us are disappointed with our fate. The conservative right feels President Obama didn't do anything to fulfill their dreams. The aging white male population believes they have been bypassed for any benefits our economy has yielded during the recovery. Women feel this recent election has bypassed them and Hillary didn't offer enough change. All of these are valid.

I'm not confused by the political result. I am bewildered by the economic reality. But our mileage may vary and projections are not written in stone. Be careful out there. Your savings are at risk!

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