Category Archives: Politics

“Raise more money than your opponents.”  Sadly, this strategy more often than not, leads to success in politics.  It also corrupts our political system and leaves us far short of our desire to have “a government of the people, by the people, and for the people.”

Once the money has been raised (and all the promises made), how is that money being spent by those running for office?  I didn’t have to spend a lot of time using Google to confirm my suspicion that the biggest expenditures are for “media buys,” somewhere between 55-75% depending upon the year and the political office being sought.

Political campaigns are a huge source of revenue for the major networks and their local affiliates.  It’s billions of dollars, and the related expenses are negligible.  It has to be the most profitable segment of their business.  Recognizing this, I wouldn’t expect to see much effort from the Media to advocate any changes.

But change is coming for the following reasons:

1.    Social Media is a powerful tool, which can be used to reach voters.  Television ads may still be effective with older voters but the end is near.

2.    The cost of using Social Media is negligible.  Those running for office will not have to sell their soul to the highest bidder to get their name and message “out there.” “Big money” will no longer be writing the script.  That should be appealing to every voter.

Every day we see how technology and Social Media is changing the way we live, how services and products are delivered to consumers, and how we interact with others.  In my next post I will discuss the coming revolutions in our political system that may bring us closer to the democracy our Founding Fathers envisioned.

Next week, after the mid-term elections, we have the unofficial start of the 2016 Presidential Race (although numerous Presidential hopefuls have already begun “testing the waters,” traveling the country and watching the polls very closely).  For me, it’s a great time to be writing a blog because there will be no shortage of “subject matter” for the next 24 months.

Thanks to Hillary Clinton’s, big gaffe during her interview with Charlie Rose, “businesses do not create jobs,”  we are off to a great start.  The entire race looks a lot like a NASCAR race.  All the candidates are jockeying for the “poll position” that will give them an early lead.  Just as with the racing cars, it becomes a race of attrition, with the winner being in many ways, the last man or woman standing at the end.  NASCAR drivers have pit crews to get them back in the race when they have a malfunction or they need new tires, the politicians have their “spin control doctors” to get them back in the race when they make their inevitable gaffes.

Sometimes the damage from a crash or an engine malfunction is so great, that even the best pit crews, cannot get the driver back in the race.  It’s no different with politicians.  In the last presidential race Governor Perry, during a campaign debate, could only remember 2 of the 3 departments of the federal government he wanted to close down.  With that one gaffe, he was out, but now he’s back for this race wearing glasses, hoping to look more intelligent.  Sarah Palin was a virtual “gaffe fountain” which earned her my “Jerry Springer” award.

George W. Bush made so many gaffes he engendered the term “Bushisms.”  Joe Biden stated that the middle class had been “buried over the last 4 years.”  The problem was, this declaration was made at the end of the Obama administration’s first 4 years in office.  Al Gore made the ludicrous claim that he invented the “internet.”  But he recovered nicely with a simple power point presentation that won him a Nobel Prize.

Obviously, politicians from both parties continue to give us “well documented” evidence that we are not being led by our “best and brightest.”  Watching Hillary Clinton’s pit crew try to explain what Hillary was actually saying has been entertaining but it is also sad.  Her comment was so offensive that I have serious doubts about her completing very many laps in the coming race.  Even China and Russia came to the realization over the past century that businesses are more efficient at creating jobs than the government.

My only experience with the Government budgeting process was my last year in the Marine Corps.  On my return to the U.S., I was stationed in Barstow, California and put in command of the NCO School and the Rifle Range.  When it came time to submit my budget request for the coming year I was given only one requirement by my Commanding Officer; “just make certain your budget request exceeds the current years budget.”  I didn’t really think about the implications until just recently when the howls of protest about the Sequester and the mandated cuts of 2% across all government departments approached.  A 2% cut would seem reasonable to most people, I think, but when you have grown accustomed to an ever increasing budget, it’s difficult to hit the (-) on the calculator.  All we hear is that a 2% cut threatens our ability to defend our Country even though we spend more on defense than the rest of the worlds’ governments combined.

I am not an expert regarding the Defense Budget but I have a suggestion as to how the Pentagon might save more than a few dollars of the taxpayers’ money.  The retirement benefits (including medical benefits) are a growing part of the Defense Budget.  Politically it’s easy to gain support for these benefits because these people “laid their lives on the line to defend our country!”  That is true for some military retirees, but how many?  Anyone who has ever been in the Military knows that it is a very small percentage of military personnel who are ever in “harms way.”  The vast majority, have jobs similar to every other government or private sector employee.  My recollection from my Vietnam experience was that it took 7 personnel in the “rear with the gear” (the REMFs) to support one combatant.  And of course a huge number of military personnel were in the U.S. and in other non-combat zones around the world.  In todays high tech military the percentage of military personnel “laying their lives on the line” is smaller than ever.  Even those flying the deadly drones in the Middle East, are based here in the U.S.

In my opinion, our Military should be increasing the care and retirement benefits dramatically for those who have been “in harm’s way,” but for those who have never been shot at, taken “incoming”, flown a plane, or walked through a mine field, they should no longer be allowed to retire with the same benefits as those who have.  Unfortunately, it’s the non-combatants who make all the spending decisions.

It must give meteorologists satisfaction knowing that their track record forecasting the weather, while not that good, seems to be far better than government economists.  As the stock market continues to move ahead and economic indicators roll in showing the recovery is gaining strength, we are no longer hearing about the coming “bread lines” and the forecasted spike in the unemployment rate.  As I have recently said (well not that recently), maybe government budget cuts are giving businesses and individuals more confidence in the future.

With all this positive news about the economy, Paul Krugman (and his colleagues who continue to call for more government stimulus) must be at a loss for  words.  (That must be particularly difficult for Krugman, who I always think of as the “Jim Cramer” of the Economics profession.)  So far the best they can come up with is; “the news would be even better if we had more spending of the tax payers money.”  They should be celebrating the recovery but my guess is they would be a lot happier if the unemployment rate had spiked to 8.5% and the economy had fallen back into a recession.

As the recovery gains momentum President Obama will be distancing him self from all the dire forecasts, and find a way to take credit for the recovery.  That’s fine with me, “always better to be lucky than good.” Perhaps one day he will realize that “government” does not have all the answers.

As I watch the NBA playoffs, I can’t help but think that the government’s role is analogues to the officials who are there to enforce the rules.  The officials are not there to control the outcome.  Fans would become very frustrated and angry if the officials started dictating strategy to the coaches and players in the belief that they know what is best for the fans.  Our government also has a set of rules which they are supposed to follow, it’s called The Constitution and when politicians begin to bend the rules because “they know better” our democracy is in trouble.

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Note for Advisors:  Mark Hebner, one of the early advisors to use DFA, is building a web based investment library.  He is searching for Matrix books for the years prior to 1999 and any investment books written by advisors.  The entire library will be accessible to the public.  If you are interested Mark’s email is mark@ifa.com.  I think it is a great idea.

The “Market” sure seems to like the forced budget cuts even in the face of the “gloom and dune” scenario painted by our President and his so-called “economic” advisors.  The Market is not always correct as an indicator of future economic growth, but the Market’s record when it comes to forecasting is certainly more reliable than the economists serving our politicians.  Keep in mind that those forecasting the coming economic disaster are the same crowd who failed to see the “Great Recession” coming or the failure of the huge stimulus package that was going to reduce unemployment to less than 6% in Obama’s first term.  They are doing the best they can, but it’s a very difficult task, forecasting the future.

As has been widely reported, the spending cuts are such a small fraction of the total federal budget but even these small cuts seem to be having a positive effect on the economy.  Here in South Florida, as I look around, I realize there is a huge construction boom underway.  I was in L.A. a couple of weeks ago and observed the most new construction projects underway in recent memory.  (I am not talking about all the government funded infrastructure projects such as the “405 modernization” or the Port of Miami Tunnel.)

If in fact the economy begins to grow, it will be fun to listen to the “spin” coming out of the White House trying to explain why the disaster scenario did not materialize, and why they knew all along that the sequester was a positive thing for the economy.  That’s fine with me if it shows politicians that real government reforms regarding spending and taxes can do even more to simulate our economy.  If “spending cuts” turn out to be the juice that boost the economy we may see politicians competing to be known as the biggest “cutter” of spending rather than the biggest “spender” of taxpayer money.  Then again, maybe not, but we can dream!