INSIGHTS Blog

This November you are going to make a choice about who you think is better for the economy, a Republican or a Democrat. There are other reasons to choose one way or another, but I have no expertise about defense, security, education, immigration, etc. So, I will restrict the discussion to the economy.

In the 1980s I was a real estate entrepreneur.  I bought apartment buildings in need of attention, gave it to them and in a few years sold the buildings at a profit. In 1982 I purchased my biggest ever building, a 90-unit apartment building in West Philadelphia. It was in need of a great deal of repair, but it was also mostly occupied by rent-paying tenants. The building was originally built in 1928 and it turned out that there were decades of deferred maintenance.

On our death beds who thinks, “I really wish I had more money”? The race is not about who dies with the most money. It’s always been about how much can we enjoy our lives and provide enjoyment for others. How much did we love and were loved? Only a fool faces death wishing they had more money in this moment. All of which begs the question – why build that nest egg?

I graduated Germantown High School in Philadelphia in 1968.  That might have been the least momentous thing to happen that year.  In so many, many was 1968 was a very ugly year.

For a long time Garrison Keiler hosted a weekly variety show on Public Radio called Prairie Home Companion.  It was set in the fictional Minnesota town of Lake Wobegon “where all the women are strong, the men are good looking, and the children are all above average.”  If you think about that sentence, you will realize very quickly that nothing about it could possibly be true.  The definition of average means that all the children cannot be above average. 

The main complaint about paper money, specifically the US Dollar, by gold enthusiasts, is the slow erosion of purchasing power, otherwise known as inflation. The natural conclusion is that if inflation is not a good thing, then its opposite, the appreciation of money, must be a good thing. Sorry, no. It’s actually worse. A lot worse.

Adam Smith is sometimes called the Father of Capitalism.  The Scottish economist published his great book, “The Wealth of Nations” in an interesting year.  1776.  Hmmm.  I wonder if anyone on this side of the pond read that book when it came out?

Every fall, after the leaves have fallen and the trees are bare, and hopefully before the first snow, my wife and I drive to Florida. It’s a long drive made easier by the many convenience stores, restaurants and hotels that line the highways of America. We stay overnight for at least one night during this drive at some middle market hotel. This is a very familiar part of life in America and has been for my entire life. But that is not true everywhere in the world.

People involved in creating this new technology are now sounding alarms. They worry that the future will be some form of the dystopia envisioned in such movies as The Matrix, The Terminator, AI, and others in which the machines take over. They know far more about this technology than I do so it is with a little humility that I beg to differ.

My family and I took a road trip to Southwest Florida last month (part work, part vacation) and while my wife and I enjoyed the scenic view from the front seat of our car, our kids periodically called out from the back, "Are we there yet?" In total, the drive was a 3,054 miles roundtrip. Needless to say, we heard that question several times over throughout our drive. The same can be asked of both the Federal Reserve's fight on inflation and a recession.

I was lifting weights in the gym. A friend who knows what I do started talking with me about some bonds he was representing. They paid 100% interest per year and were backed by real estate. A few of you may be laughing, but a few others of you may be asking, really? Where can I get that?

When I was in high school, I worked after school in a factory loading trucks.  This was hard work.  It was a very long time ago so the rate I was paid might seem pathetic by today’s standards, but it was pretty small even by the standards of the day, at less than $1.25 per hour.  I worked for the shipping manager.  He spent most of his time in a small office sitting at a desk.  I don’t recall ever seeing him lift anything heavier than the telephone. 

I’m reminded of Ronald Reagan’s definition of a recession and of a depression. “A recession is when your neighbor loses his job. A depression is when you lose your job.” Humorous and clear and a little illustrative of our topic. What President Reagan was saying in his homespun way is that it’s a matter of degrees. A matter of severity. Market corrections are similar.