February, as with all months, features various ‘national’ days. I just learned that Working Naked Day is this Friday … not sure if I should come into the office or work from home. Otherwise, the red-letter days in February are Valentine’s Day and President’s Day, the themes for this month’s note. If politics or economics is not your thing, just skip to the good stuff beneath the heart.
“Never confuse correlation with causation … presidents respond to the unique challenges of their time and cannot control outside events. Similarly, presidents inherit not a blank slate economy but a spot on the business cycle.” – Brian Riedl, Manhattan Institute
Americans often say they are unhappy with the way the president is ‘handling’ or ‘managing’ the economy. This typically means paychecks not keeping up with the cost of living or internet-shopping temptations. But the president is not some Wizard of Oz pulling levers and spinning wheels behind a curtain. While presidents naturally wish for healthy economies and happy citizens, their job (description here) is to faithfully execute the laws of the United States. Outside of this, presidential desires are frequently thwarted by Congress (the people who write the laws) and the courts (the ones who interpret the laws). Furthermore, it can take time for policy seeds to germinate, grow, and bear fruit. The robust economy that Bill Clinton enjoyed during the ‘90s was due in large part to Ronald Reagan’s efforts in the ‘80s. Mr. Clinton’s term began just after the Cold War ended and globalization was on the upswing. At the same time, technology-enhanced baby boomers were hitting their productivity stride. Fortune favors … the lucky.
Despite lessons from history, some people believe a strongman will be their savior and answer their prayers. To dispel this notion, look no further than today’s autocratic China. Xi Jinping is president for life. The Chinese Communist Party has no political rival. And yet, Xi and the CCP are currently pinned down by decelerating economic growth, rampant cronyism and corruption, high youth unemployment, high sovereign debt, and major problems within their banking and property sectors (here). Today’s standard-of-living score? USA 6, China 1*. And for those enthralled by Viktor Orbán’s authoritarian ‘paradise’ over in Europe, America beats Hungary 4–1*.
The final kicker: heads of governments—like all mortals—will always be subordinate to the market gods. In the back half of 2022, Britain’s Prime Minister Liz Truss was done in by a gilt (UK government bond) market that howled when she announced her fiscally incontinent scheme to goose the British economy. UK tabloids, in typical fashion, had great fun pointing out that Truss’s time in action was outlasted by a head of lettuce (here). The fact remains: markets and economies are too large, too complex, and too integrated with an even more complex global system for any man, woman, or political faction to possibly manage.
“The politician is someone who sells his soul for the good opinion of people he despises by the inch but worships by the mile.” – Kevin D. Williamson, National Review
What is the connection between romantic love and money? Where love is true … there is none.
“After all these years, I see that I was mistaken about Eve in the beginning; it is better to live outside the Garden with her than inside it without her.” - Adam's Diary, Mark Twain
"Soul meets soul on lovers’ lips." - Percy Bysshe Shelley, English Romantic poet
"Every heart sings a song incomplete until another heart whispers back.” - Plato, Greek philosopher
"Two souls with but a single thought, two hearts that beat as one." - John Keats, English Romantic poet
"In love, one and one are one." - Jean-Paul Sartre, French philosopher
"One word frees us of all the weight and pain in life. That word is love." - Sophocles, Greek tragedian
“On your deathbed, the only thing you will care about is ‘how it had gone’ in matters of the heart.” – Martin Amis, The Pregnant Widow
* 2022 Gross Domestic Product (GDP) per capita – United States ($76,329), Hungary ($18,390), China ($12,720) – World Bank national accounts data.
Any opinions are those of James Aldendifer and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. Investing involves risk and you may incur a profit or loss regardless of the strategy selected. Links are being provided for information purposes only.
