Sunday, February 7, 2016
Presidential politics: It's still the economy, stupid
Opinion Only. |
For more than a quarter of a century, I’ve made a
living offering people financial advice and helping them manage their
money. It’s a great and rewarding job … or at least it used to be.
Recently, something has changed. My clients are wealthy people – the one-percenters who’ve been raked over the coals for the last seven years – and for the first time I can remember, they’re feeling very pessimistic about the future. On a business level, they feel beaten down by onerous and overbearing rules and regulations. And on a personal level, they feel demonized for the “crime” of being successful.
Somebody, please tell me … When did getting rich become a bad thing? Our nation was built on a “can-do” attitude, and the people who “could do and did” – people named Vanderbilt, Rockefeller, Carnegie, Gates, Jobs, Zuckerberg – got rich doing it. In America, you could always do more than just dream of being rich. If you had a great idea and worked hard to make it a reality, the sky was the limit.
But I’m not seeing much of that these days. Many of my clients, people who used to make bold investments, are running scared. They’ve turned skittish, and it’s not because they’ve grown old. It’s because entrepreneurs have to be eternally and sometimes irrationally optimistic, and now they’re looking out at the horizon and seeing nothing but danger of every conceivable kind: financial, legal, physical, etc. They used to come to me and say, “Let’s make some money.” Now they say, “Let’s not lose any.”
Prosperity has left the building. Survivability has taken the stage.
We’ve entered a period of trickle-down negativity, and it’s trickling down from the very top. The one-percenters used to be immune to bad times, as if they were surrounded by a force field. But now that has changed. Now my clients come to me and say they don’t like how things are going in the world, and all they want to do is set up a portfolio for survival. And this is frightening, because I used to think pessimism wasn’t in their DNA.
Now, maybe you feel this doesn’t concern you. Or maybe you’re even enjoying a prolonged moment of schadenfreude because, after all, we’re talking about rich people. But if that’s what you’re feeling, consider this: These are the people who create jobs. These could well be the people who pay your salary, or who will hire your sons and daughters. If the reward for getting rich through invention and hard work is that you’ll become a pariah, then what’s the point of even trying?
To my mind, there’s still hope. This is an election year, and one thing we know for certain is that someone new – maybe a Democrat, maybe a Republican, maybe even an Independent – will be living in the White House a year from now.
Whomever that person is, he or she had better have a handle on our economy, as well as a plan to get it back on track.
This will require more than lip service, more than boasting that the first order of business will be to repeal ObamaCare or provide Medicare for everyone. The next president will have to have a comprehensive plan to turn things around, to carry out Donald Trump’s slogan and make America great again.
But that means we have to stop all this yammering about building walls, fighting terrorists and unveiling emails. Here’s a slogan worth remembering: It’s the economy, stupid!
I have a front-row view of what is happening to the one-percenters, and what I see is a group that has been the country’s punching bag for seven years. Now they’ve lost their long-distance vision. They’re not looking five years out … or three or two or even six months.
They’re not looking to grow; they’re looking to survive. And that’s bad not only for them, but for all of us – because that negativity trickles down into their businesses and their investments.
What they want and need is a candidate with a “can-do” attitude, someone who seeks to effect sweeping change, someone who knows that when you’re riding a dead horse, it’s time to dismount. They want a candidate who understands the problem and has very specific plans to remedy it. Someone who will reduce the burden on business, which includes taxes and unnecessary regulations. Someone who understands that it’s OK to be wealthy and that it’s OK to compete and win, because nothing in this world ever got better without competition. Someone who knows that fertile soil allows everything to grow and that if you have a positive attitude and a positive business climate, everyone will grow together.
This is a country where any lump of coal can become a diamond, where if you can conceive it, you can achieve it. What the one-percenters – and the other 99 percent, as well – need is a president who believes it, and a government that will get out of the way so it can happen.
Ed Butowsky is the managing partner of Chapwood Investments, LLC, a private wealth management advisory firm that focuses on providing comprehensive financial counseling and investment advice to wealthy families and individuals. An internationally recognized expert in the investment wealth management and personal finance industry, he specializes in recognizing how current events affect investment portfolios. For more information: www.edbutowsky.com and www.chapwoodinvestments.com.
Recently, something has changed. My clients are wealthy people – the one-percenters who’ve been raked over the coals for the last seven years – and for the first time I can remember, they’re feeling very pessimistic about the future. On a business level, they feel beaten down by onerous and overbearing rules and regulations. And on a personal level, they feel demonized for the “crime” of being successful.
Somebody, please tell me … When did getting rich become a bad thing? Our nation was built on a “can-do” attitude, and the people who “could do and did” – people named Vanderbilt, Rockefeller, Carnegie, Gates, Jobs, Zuckerberg – got rich doing it. In America, you could always do more than just dream of being rich. If you had a great idea and worked hard to make it a reality, the sky was the limit.
But I’m not seeing much of that these days. Many of my clients, people who used to make bold investments, are running scared. They’ve turned skittish, and it’s not because they’ve grown old. It’s because entrepreneurs have to be eternally and sometimes irrationally optimistic, and now they’re looking out at the horizon and seeing nothing but danger of every conceivable kind: financial, legal, physical, etc. They used to come to me and say, “Let’s make some money.” Now they say, “Let’s not lose any.”
Prosperity has left the building. Survivability has taken the stage.
We’ve entered a period of trickle-down negativity, and it’s trickling down from the very top. The one-percenters used to be immune to bad times, as if they were surrounded by a force field. But now that has changed. Now my clients come to me and say they don’t like how things are going in the world, and all they want to do is set up a portfolio for survival. And this is frightening, because I used to think pessimism wasn’t in their DNA.
Now, maybe you feel this doesn’t concern you. Or maybe you’re even enjoying a prolonged moment of schadenfreude because, after all, we’re talking about rich people. But if that’s what you’re feeling, consider this: These are the people who create jobs. These could well be the people who pay your salary, or who will hire your sons and daughters. If the reward for getting rich through invention and hard work is that you’ll become a pariah, then what’s the point of even trying?
To my mind, there’s still hope. This is an election year, and one thing we know for certain is that someone new – maybe a Democrat, maybe a Republican, maybe even an Independent – will be living in the White House a year from now.
Whomever that person is, he or she had better have a handle on our economy, as well as a plan to get it back on track.
This will require more than lip service, more than boasting that the first order of business will be to repeal ObamaCare or provide Medicare for everyone. The next president will have to have a comprehensive plan to turn things around, to carry out Donald Trump’s slogan and make America great again.
But that means we have to stop all this yammering about building walls, fighting terrorists and unveiling emails. Here’s a slogan worth remembering: It’s the economy, stupid!
I have a front-row view of what is happening to the one-percenters, and what I see is a group that has been the country’s punching bag for seven years. Now they’ve lost their long-distance vision. They’re not looking five years out … or three or two or even six months.
They’re not looking to grow; they’re looking to survive. And that’s bad not only for them, but for all of us – because that negativity trickles down into their businesses and their investments.
What they want and need is a candidate with a “can-do” attitude, someone who seeks to effect sweeping change, someone who knows that when you’re riding a dead horse, it’s time to dismount. They want a candidate who understands the problem and has very specific plans to remedy it. Someone who will reduce the burden on business, which includes taxes and unnecessary regulations. Someone who understands that it’s OK to be wealthy and that it’s OK to compete and win, because nothing in this world ever got better without competition. Someone who knows that fertile soil allows everything to grow and that if you have a positive attitude and a positive business climate, everyone will grow together.
This is a country where any lump of coal can become a diamond, where if you can conceive it, you can achieve it. What the one-percenters – and the other 99 percent, as well – need is a president who believes it, and a government that will get out of the way so it can happen.
Ed Butowsky is the managing partner of Chapwood Investments, LLC, a private wealth management advisory firm that focuses on providing comprehensive financial counseling and investment advice to wealthy families and individuals. An internationally recognized expert in the investment wealth management and personal finance industry, he specializes in recognizing how current events affect investment portfolios. For more information: www.edbutowsky.com and www.chapwoodinvestments.com.
Marco Rubio is biggest loser. Trump and the governors all have a good night in NH
Saturday night at the GOP debate in New Hampshire belonged to the executives: the governors and the businessman.
Indeed, if Saturday is any indication of what kind of debater Donald Trump can be, then it’s safe to say that it really was a mistake for him to skip the Fox News debate before the Iowa caucus. He may very have won it if he had shown this kind of strength and adeptness just days before Iowans went out to vote.
With the exception of the moment when the crowd booed Trump during an exchange with Jeb Bush over eminent domain and stacking the audience with supporters brought in by the Super PACs backing him, he was unwaveringly in charge. His answers on how important being an effective dealmaker is as a leadership quality, his stance on increasing our use of torture tactics, forcing China to rein in North Korea and support for our veterans, Trump was measured and thoughtful.
It certainly helped that he wasn’t that target on the stage since Marco Rubio filled that role on Saturday evening. As the candidate with the most momentum going into the debate – Rubio just moved into second place in New Hampshire – all eyes and attacks were on him. And he wasn’t ready.
In the first third of the debate, Rubio repeated himself four times with the line “this fiction that Barack Obama doesn’t know what he’s doing” with only slight variations. Chris Christie called him out on it and Twitter noticed, too. It was a clear indication that Rubio’s surge isn’t complete and that he’s still green. And though he finished strong with his answers on how he could beat Hillary Clinton and why he’s pro-life, the lasting memory will certainly be of him tripping over his words.
For the first time in any of these GOP debates, it was the governors who put in uniformly strong performances.
Christie didn’t mince words. He touted his strong record in New Jersey of creating jobs, cutting taxes and the prison population by supporting drug treatment programs – all critical issues for New Hampshire voters. And he continued with his relentless attacks on Rubio as someone who has no experience – something that has become a serious issue since Rick Santorum endorsed Rubio and couldn't name an accomplishment of his – and he was definitely the winner on that issue. His attacks even prompted Bush to jump on board when he offered that Rubio has never faced a real challenge in his life.
Rubio had no serious reply to either candidate’s charge.
Bush was the most energized that we’ve seen him yet. He was bold and declarative in discussing the support he has from over 30 generals who believe he’d be the strongest commander-in-chief and his plan to combat ISIS. He also discussed his strong conservative record in Florida wherein he cut taxes and dramatically reduced the size of government -- arguing persuasively for the importance of trusting the states to be the source of reform and innovation.
The third governor on stage, John Kasich, showed why he’s so well liked in New Hampshire. He was personable and compelling in talking about the 400,000 jobs he’s created, his work to make a deficit into a surplus and all while cutting taxes. He also continues to be the most balanced on immigration reform, arguing for the importance of keeping families together and finding a way to create a pathway to legal status.
It was a bad night for Ted Cruz who was a virtual non-factor on Saturday evening. He was hurt initially by the back and forth with Ben Carson over the fact that Cruz’s campaign circulated a rumor that Carson had dropped out before Iowa voters went to caucus. He looked small and dishonest and the audience noticed.
For his part, Carson had a few good lines, but nothing substantial that will resonate with voters.
I would expect to see Trump stay on top after this debate and that there will be some upward movement for the governors. We do know that 40 percent of New Hampshire voters don’t decide who they’re voting for until they walk into the booth so it’s still anyone’s game, but we may have very well seen the end of Marcomentum on Saturday night.
AP FACT CHECK: Skewed GOP claims on taxes, health insurance
Viewers of the latest Republican presidential debate didn't get a straight story from the candidates on U.S. taxes vs. the world, the state of the health insurance marketplace under "Obamacare" or what might happen if that law is taken away.
In his zeal to condemn the Obama administration's immigration record, Ted Cruz once again vastly overstated deportations under the previous two presidents. And he continued, as in a previous debate, to struggle with the meaning of carpet-bombing.
A look at some of the claims Saturday night and how they compare with the facts:
DONALD TRUMP: "Right now, we're the highest taxed country in the world."
THE FACTS: Far from it. The U.S. tax burden pales in comparison with that of other industrialized countries.
Taxes made up 26 percent of the total U.S. economy in 2014, according to the 34-nation Organization for Economic Cooperation and Development. That measure looks at the entire tax burden, which is different than tax rates that can be gamed through loopholes, deductions and credits.
In Sweden, the tax burden is 42.7 percent of the economy. It's 33.6 percent in Slovenia (Trump's wife, Melania, was born in the part of Yugoslavia that became Slovenia). Britain clocks in at 32.6 percent, while Germany's burden is 36.1 percent.
Where is the tax burden lower than the United States?
South Korea, Chile and Mexico.
___
TED CRUZ: "We will adopt commonsense reforms, No. 1, we'll allow people to purchase health insurance across state lines that will drive down prices and expand the availability of low-cost catastrophic insurance."
THE FACTS: Allowing the interstate sale of health insurance policies is not a new idea, and not the straightforward solution that it may sound.
This long-standing Republican proposal has previously run into opposition from regulators in many states. State insurance and consumer protection regulators say such an approach could trigger a "race to the bottom," allowing skimpy out-of-state policies to undercut benefits that individual states require. Proponents of interstate competition say a basic benefits plan would be spelled out.
Some insurance industry insiders see another complication: Out-of-state companies may not have adequate local networks of hospitals and doctors.
It's a tricky position for Republicans in Washington, who argue broadly (Cruz included) that the federal government should defer to state and local decision-making. On this matter, many states don't want the solution that Republicans are pushing.
__
TRUMP: "The insurance companies are getting rich on Obamacare."
THE FACTS: Although some insurance companies are making a profit from their business under President Barack Obama's health care law, the industry's biggest player lost money.
United Health last year reported deep losses from its business on the health law's insurance exchanges and said it will re-evaluate whether it wants to continue in that market. Anthem, the second-largest insurer, said its enrollment in the law's markets fell, and the business has been less profitable than expected.
Aetna, the third-largest insurer, said it has been struggling with customers who sign up for coverage outside the health law's annual enrollment window and then use a lot of care. This dumps claims on the insurer without providing enough premium revenue to counter those costs.
Some industry analysts say insurers are struggling to attract enough healthy patients, and it's too easy for customers to manipulate the system by doing things like signing up for coverage, using health care, and then stopping premium payments.
A dozen of the 23 nonprofit health insurance co-ops created under the law have folded.
___
CRUZ, defending his vow to deport 11 million people living in the U.S. illegally: "I would note that in eight years Bill Clinton deported 12 million people. In eight years George Bush deported 10 million people. Enforcing the law. We can do it."
THE FACTS: Statistics from Immigration and Customs Enforcement show that roughly 1.6 million were deported under Bush, not 11 million. Under Clinton, about 870,000 immigrants were deported, not 12 million, according to the Migration Policy Institute. So far, about 2.4 million have been deported under the Obama administration.
To get the swollen figures, Cruz appears to be combining deportations with arrests made by the Border Patrol in the previous administrations, according to the institute.
___
CHRIS CHRISTIE: "The president and his former secretary of state are for paying ransoms for hostages. When (you) do that, you endanger even more Americans around the world to be the subject of this type of hostage-taking and illegal detention."
THE FACTS: President Barack Obama said exactly the opposite in June, when the White House reaffirmed its opposition to paying ransom to terrorist groups that hold American citizens hostage.
The president said such payments only serve to endanger more Americans and finance "the very terrorism that we're trying to stop" — points that Christie actually echoed during the debate.
Though the new White House policy precludes ransom payments by the U.S. government, the Obama administration did leave open the door to communication with hostage-takers — whether by the government, families of victims or third-parties — and said relatives who on their own decide to pay ransom won't be threatened with prosecution.
___
CRUZ, defending his vow to "carpet bomb" to defeat the Islamic State: "When I say saturation carpet bombing, that is not indiscriminate. That is targeted at oil facilities. It's targeted at the oil tankers... It's using overwhelming air power."
THE FACTS: Cruz is trying to rewrite the dictionary, which defines the term as dropping many bombs on a small area to prepare it for advancing ground troops. The U.S. military uses precision-guided bombs against the kinds of specific targets that Cruz is talking about, which also reduce the risk of killing civilians — a goal the U.S. military has embraced under Republican as well as Democratic presidents.
Top tier takes heat: Rubio, others under fire at NH debate
The top tier in the Republican presidential race endured hard-hitting and sustained attacks on the debate stage Saturday night, with Florida Sen. Marco Rubio in particular getting pelted by New Jersey Gov. Chris Christie for skipping Senate votes and leaning on anti-Obama “talking points” on stage.
The debate in New Hampshire – their last before the state’s upcoming primary – saw the middle-tier candidates scrapping to gain traction, frequently putting the top three finishers in Iowa’s caucuses on defense over their records. Texas Sen. Ted Cruz faced renewed criticism over his campaign’s questionable caucus-night tactics, while billionaire businessman Donald Trump took heat from his old sparring partner Jeb Bush – and even the audience – over a development project.
But it was the clashes between Christie and Rubio that became most heated, and Rubio seemed to struggle at times to push past the tough-talking governor’s critique of his record.
“You have not been involved in a consequential decision where you had to be held accountable, you just simply haven’t,” Christie said. Pointing to a sanctions bill, Christie said Rubio skipped the vote, adding: “That’s not leadership, that’s truancy.”
Rubio fired back that Christie didn’t return to New Jersey during the recent snowstorm until he was pressured. “They had to shame you into going back,” Rubio said.
But Christie seized on a recurring effort by Rubio to look past his GOP rivals by repeating a line about President Obama trying to “change this country.”
“There it is. The memorized 25-second speech,” Christie said, mocking Rubio’s allegedly rehearsed “talking points” on Obama. When Rubio again accused Christie of not wanting to return to New Jersey for the storm, Christie shot back: “Is that one of the skills you get as a United States senator – ESP?”
With the polls tightening ahead of Tuesday’s primary, several Republican contenders on stage were looking for a late breakout, and Christie was unquestionably one of them. Whether his debate-stage attacks can knock Rubio off his stride and hurt his momentum going into Tuesday’s primary remains to be seen. But Christie’s attacks were aimed squarely at questioning Rubio’s experience, an issue that the governors in the race have raised before.
Christie later went after Rubio for backing away from immigration reform legislation he once co-authored, saying he didn’t “fight” for it. Rubio countered that the plan has “no chance of passage” until the American people are convinced illegal immigration is under control.
Cruz, too, was sharply criticized by Ben Carson over representatives of his campaign incorrectly spreading rumors on Iowa caucus night that he was dropping out of the race. It was a rare moment, as the normally non-confrontational Carson detailed the resources that have gone into his White House bid and questioned why Cruz’s team would say he was suddenly leaving the race on the night of the first contest.
“To think that I would just walk away just 10 minutes before the caucus … I mean, who would do something like that?” he said. Carson called the rumors a good example of “certain types of Washington ethics … Washington ethics basically says, if it’s legal, you do what you need to do in order to win.”
Cruz, the Iowa caucus winner, insisted he “knew nothing about” the election night rumors, and again apologized.
“Ben, I’m sorry,” he said.
Trump needled Cruz on the same controversy in his closing remarks, saying of his Iowa victory, “That’s because you got Ben Carson’s votes, by the way.”
Cruz also had an awkward moment toward the end of the debate, when asked by the moderators about his stance on waterboarding. He said it’s “enhanced interrogation” and not technically torture, and he would not bring it back “in any sort of widespread use.” He then paused for several seconds, before resuming to recall legislation he backed prohibiting line officers from employing the technique – and say he’d use whatever “enhanced” methods needed to protect America.
Trump was unequivocal. “I’d bring back a hell of a lot worse than waterboarding,” he said.
The Saturday night debate, hosted by ABC, was the candidates’ last before the New Hampshire primary. It also marked Trump’s return to the stage – after he sat out the last debate over a dispute with debate host Fox News. But he returned for the face-off in Manchester, N.H., with his front-runner status now in jeopardy, after Cruz bested him in the leadoff Iowa caucuses and Rubio pulled off a strong third-place finish that has given his campaign fresh momentum.
Yet it was former Florida Gov. Bush who put Trump on his heels at Saturday’s debate, in a dispute over eminent domain – the government power to seize property that Trump has supported.
“It’s a necessity for our country,” Trump said.
Bush then accused Trump of using eminent domain to take property from an elderly woman for a project in Atlantic City. After Trump denied it and then accused Bush of trying to be a “tough guy,” Bush asked, “How tough is it to take property from an elderly woman?”
Trump at that point essentially took on the audience, which booed him repeatedly as he then accused them of being Bush’s “donors and special interests.” Trump got the final word, telling Bush that the Canada-to-Texas Keystone pipeline they support is a “private job” that needs eminent domain to be completed. (According to local reports, the New Jersey woman in question ultimately kept her home by fighting the city in court, though she moved out several years ago.)
Despite being jeered by the audience for his “donor” charge, Trump did receive applause for his explanation of his position on health care. He vowed to repeal ObamaCare and replace it, but said, “We’re going to take care of people that are dying on the street.”
Trump, earlier, also defended his “temperament,” challenging criticism from Cruz that Trump would be a trigger-happy commander in chief.
“I actually think I have the best temperament,” Trump said.
Earlier this week, Cruz responded to Trump’s criticism of his Iowa caucus tactics by questioning his temperament and joking that with Trump in charge, Americans could wake up and find he’s “nuked Denmark.”
Trump reminded the audience at Saturday’s debate that he did not back the Iraq war.
“I was the only up here who said don’t go, don’t do it,” Trump said.
He also mocked Cruz, after the senator did not respond directly whether he stands by his words.
“He didn’t answer your question,” Trump noted. “People back down with Trump, and that’s what I like, and that’s what the country is going to like.”
Trump still leads in New Hampshire, but recent polls show Rubio surging in the state, which votes Tuesday.
The debate at St. Anselm College featured the seven top-polling candidates. Former HP CEO Carly Fiorina and former Virginia Gov. Jim Gilmore did not make the cut.
It started with a hiccup, as the moderators appeared to, temporarily, forget to invite Ohio Gov. John Kasich to the stage. He then walked on. Still, Kasich fielded several questions at the debate, challenging his GOP rivals on suggestions they would deport millions of illegal immigrants.
He also talked tough, as other candidates did, about North Korea on the heels of reports that they launched a long-range missile.
“We cannot continue to be weak in the face of the North Koreans,” Kasich said.
Unlike in Iowa, the battle for the not-Trump vote is crowded and competitive in New Hampshire. Aside from Cruz and Rubio, Kasich and Bush are also polling well in the state. Christie had been running strong as recently as January but has seen his numbers slide in recent weeks.
Cruz, later on in Saturday’s debate, was by turns tough and tender. He reiterated his goal to use “overwhelming air power” to take out the Islamic State. Citing reports about the emergence of a “jihadist university” in ISIS territory, he said that building “should be rubble” but added he’d wait until “freshman orientation” to destroy it.
Later, he told the story of his half-sister Miriam who died of an overdose, speaking about addiction in a state where the problem is at crisis levels.
“This is an absolute epidemic, we need leadership to solve it,” Cruz said.
Fiorina, and even some rival candidates, had lobbied ABC and the Republican National Committee to let her debate Saturday despite the criteria disqualifying her. But ABC stood firm in its decision to stick by criteria announced before Monday’s caucuses, after which three GOP candidates dropped out.
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