I was eight years-old when Ronald Reagan was first elected. Like Donald Trump, he was an outsider, elected after years of a dismal economy under a President who tried Liberal policy after Liberal policy to fix it, only making. Like with Donald Trump’s predecessor, many of the actions Reagan’s predecessor was taking were probably keeping the economy in the doldrums.
The effect of President Reagan’s presidency on my generation was enormous. We saw that the Conservative, free-market principles, really worked. If you cut taxes, the economy would surge as people worked more. There were jobs everywhere because light regulations allowed businesses to do productive things instead of fill out reams of paperwork and businesses actually wanted to be located in the US. We learned that if you gave people the freedom to take care of themselves, they mostly would.
Then came George H.W. Bush. America returned from an outsider to a party insider. We then started seeing typical Republican actions – talking about free markets and lower regulations, but not really fighting to reduce regulations and government influence in the markets. He even reluctantly went along with the Democratic Congress and raised taxes after his famous, “Read my lips” statement in the debate.
Under President Clinton we of course saw taxes raised a great deal and all sorts of new regulations come into play. We saw something interesting under Clinton, however, largely due to the push from Newt Gingrich and the Republican Congress elected under the Contract with America pledge. We saw a requirement that those on welfare, who were able, go back to work. I remember hearing stories of women who had gone into the workforce after knowing only welfare saying that they had dignity for the first time in their lives. The other thing that was striking was something I didn’t realize until Bill Clinton mentioned it in a speech he was giving at the 2008 Democratic Convention for Barack Obama – that everyone was working in the late 1990s, and the economy was on fire. I came to realize that a side effect of getting everyone to work is that you have a lot more things being produced, meaning there is more wealth to go around.
With the second George Bush, again we saw the typical Republican talk about free-enterprise but no a lot of fight for free markets. We even saw regulation of the light bulb – phasing out twenty-five cent incandescent bulbs for $3 CFLs and $10 LEDs. When the mortgage meltdown came in the end of 2008, rather than seeing the government simply support the money markets and protecting depositors as they could have done, we saw the government bailing out the large banks and insurance companies. The people who made the bad mistakes kept their companies and their jobs, while the taxpayer was left holding the bag. This was clearly crony capitalism, not free-enterprise.
Now, like Reagan, we have an outsider. In fact, Donald Trump is even more of an outsider than Reagan since Ronald Reagan was at least Governor of California before he became President of the United States. Trump has never held an ected office or even been an officer in the military – a first for America. Donald Trump talks about using free enterprise principles – low taxes, reducing regulation, reducing the cost to repatriate money from overseas — to help those in America who have been exploited by the Democrats and ignored by the Republicans. Hopefully he will do as he promises and the Republicans in the House and Senate won’t block him. And, hopefully, Republicans will see the support he has gotten despite not being the most elegant speaker or tactful politician and realize that really using free-enterprise principles is the path to a strong economy. And that is the path to keeping the Presidency.
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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.
