The INSIGHTS Blog

Big increases in tariffs have been tried twice before in American history. It’s worth knowing what happened in those previous times.

By the time you read this, the Super Bowl will have been played, and major league baseball teams are in spring training. The Super Bowl has been played every year since 1967. It was played during the pandemic. It was played during various crises. It is, of course, a great spectacle that Americans love, as witnessed by the huge television viewership and the ever-skyward march of ticket prices, now in the range of $4,000 plus per ticket. It's a game. And it’s big business.

There is a sense in this country that we have never been more divided and that may be true, but clearly division is not a new thing. Not in America.

It seems that I am never able to stray far from Niels Bohr’s statement, “Prediction is very difficult, especially when it pertains to the future.” But even by those standards, at this moment in time we are faced with big changes in so many variables that it’s all but impossible to have a vision of the future.

This January our national government will have an almost complete turnover of power from one party to the other. Let’s see what most likely stays the same, what changes and what might get smashed.

I’ve written about this on several occasions. I keep coming back to it because it’s important. Somehow Republicans have managed to cement themselves in the public’s mind as the better party for the economy. It’s a myth that’s really far from the truth and understanding this could be very important to your financial health.

In the worldwide community of investment professionals there’s a lot of talk about discipline.  Humans are emotional creatures.  We like to think our decisions are logical.  Almost certainly that’s because we use logic in the decision-making process.  But often the use of logic is less in making the decision and more in justifying the decision that you made based on emotion.  And so, in these cases logic ends up masking the emotional basis for our decision. 

In recent years, many Republicans have taken to complaining about the Biden Economy. They see that as a negative and complain about how bad things are, forgetting - intentionally or unintentionally - the last recession was during President’s Trump’s term in office, unemployment remained below 4% longer than at any time in the last 50 years, and inflation in the US is lower than the rest of the G-7 nations. Emotions, political opinions, and investing don't mix.

Many of you may not know that in addition to being a Financial Advisor, I am also a freelance professional photographer. When I photograph a wedding, I take two cameras, a wide variety of lenses, at least two of each kind of light, four light stands, and so on. Wherever possible, I have at least two of everything, and sometimes more. The reason I do this is because things break. And they are most likely to break when you are using them.

In George Orwell’s classic novel, 1984, he imagined numerous linguistic manipulations. The fictitious government wanted everyone to use Newspeak. As Orwell imagined it, the government imposed a way of speaking in order to control people’s ability to think critically. In May a Guardian/Harris poll about the economy was released. It found that 56% of Americans think we’re in a recession. I have to stop right there and after I’m done shaking my head, point out that no, we are not in recession.

We’re emotional creatures, whether we wear our emotions on our sleeve or not. And when it comes to our money and personal finances, our emotions don’t magically go away. Quite the contrary. Money is personal and it can be very emotional.

There have been 16 recessions and 1 depression. The Great Depression and 12 of the 16 recessions started during Republican administrations. Further – either a recession or a depression occurred during every Republican administration of the last 100 years. Why?