Mitch and Ed are talking about despondent conservatives on the radio on my credenza as I type. Many of us have resigned ourselves to the fact that we are likely to have a Democratic President, House and Senate and may even have lost filibuster protection in Congress. In a sick example of double jeopardy, Al Franken could be the last building block of a Liberal Supermajority.
The huns are at the wall. Soon, no one; nothing may stand between hard-working, self-reliant folks and those that think we are a people of the government, by the government, for the government, and not the other way around as Abraham Lincoln set forth in his Gettysburg Address.
Though we doubt most Americans realize it, this would be one of the most profound political and ideological shifts in U.S. history. Liberals would dominate the entire government in a way they haven’t since 1965, or 1933. In other words, the election would mark the restoration of the activist government that fell out of public favor in the 1970s.
Why do you suppose that happened? Because those were very bad times. America’s economy at its near worst. You’d think that there are enough of us around to remember how bad things were back then, but as they say, history tends to repeat itself; humans being humans after all.
As for being a despondent conservative, I have found my optimism wavering to say the least but at the same time I have given much thought, especially as a financial advisor, as to how this translates into pragmatic action and counsel.
Assuming the worst, what does it mean for the average American? What should we do? How can we prepare?
Sorry Senator Biden, but you are so very wrong, again. Sadly, for the foreseeable future, it will actually be “patriotic” to save more and spend less.
Obama’s “tax cut”, characterized more accurately as a wealth redistribution scheme by analysts with a little more economic acumen than “That One,” will essentially be taking capital from those that have historically known what to do with it and giving it to those that historically have not.
Job creation, investment, and growth will give way to an insignificant blip in consumer spending, mostly on imported goods, and visits to the casino. A drop in consumer spending and job growth will create a cyclical effect that will magnify the effects, even the perceived future effects of a more burdensome government.
You see when you run a business, every dollar you spend is a dollar not spent or invested somewhere else. It’s called opportunity cost. If the government increases its burden on consumers and employers, those dollars have to come from somewhere.
Even the prospect of higher taxes and slowed economic growth will be cause for pause among business owners and consumers. It’s happening already, which is why many believe we have been in a recession for some time now.
And in fact, I have some advice for you: make adjustments now, before you are forced too. Look at your finances with an eye for necessity. Discretionary spending should be closely scrutinized to maximize its value to you and your family or business.
Build a financial buffer of safety around you and your family as the taxman is coming and he doesn’t care what damage he does to your employer. He will simply be doing the bidding of Obama and his liberal economic pinheads.
The verdict isn’t in yet, but your financial advisor may also start to advise you to move your portfolios into allocations slightly more conservative than they have been in the past as financial analysts may determine the higher potential returns earned by investors in exchange for taking more risk (versus risk-free investments) may be reduced for the foreseeable future.
Assuming that a recession has already begun, and the liberal powers that be are likely to make exactly the wrong moves, a recession could extend itself into a depression – essentially the term for a very long recession.
Cash will be King.
And much to the surprise of the liberals that will have caused it, the rich will get even richer as assets will return to their rightful owners as the wealthy scoop up many and varied bargains in equities and real estate discarded by those who have become under or unemployed.
So don’t wait for the effects of an Obama administration and an activist liberal congress to trickle down to your financial situation. Prepare yourself now.