A reader recently took me to task over comments that I had made in the April issue of Fidelity Investor. I thought that his comments, and my reply, were worth sharing.
April 15, 2010
Subject: Political Comments?
Dear Jim, your snarky comments about health care in the April issue,
coupled with the assertion that President Obama is the “most socialist leaning
President since the free markets began” is beyond the pale. I don’t subscribe
to hear rehashed Fox news political opinion, and don’t believe it has any
relevance to your analysis. In fact, it only makes me question your objectivity
and ability to produce thoughtful analysis. SC
My response: Steve, I completely agree that my
comments in the last issue were overly snarky, though not inaccurate in my
view. Sometimes, I can’t resist fighting fire with fire, but doing so is less
Let me try and put my view into a
less snarky, more investment-relevant, but nonetheless still prosaic and
patriotic context. A decade back, I used to complain that as an investment
strategist I’d had to also become an economist. Lately, I’ve had to add
political scientist to my learning curve; so integral and integrated has
government become in the marketplaces at home and abroad. While each of us have
our formed or informed political views they’re not what I’m talking about here.
Instead, as investment strategists,
I have to be politically focused, not politically biased, and open to the ways
in which the changing of each and every guard, foreign and domestic, puts our
investment assumptions en guard. I know these are politically charged times for
the markets we invest in. I also know that trying to address such charges is
like being called to diffuse a bomb: red or blue, cut the wrong wire and you
risk an explosion.
But, if I step back from the froth
and fumes that such charges dictate, I can see investment patterns and themes
that are cyclical and not merely emotional, rational not rhetorical.
A century after my ancestors
migrated here, the imperial government they fled authorized its biggest
political backer and fund raiser, which faced bankruptcy due to corruption and
mismanagement, to sell its products without imposing upon the company the usual
duties and tariffs. With these privileges, the Government sanctioned company
could undersell small businesses and monopolize the trade.
Not only did this action create an
unfair commerce to the small businesses, it sparked American passions about the
issue of taxation without representation.
The result: the clandestine December
16th, 1773 Boston Tea Party.
I mention this steep of history for
today’s setting: more than three centuries after my ancestors made land fall, a
self-proclaimed Tea Party was recently back in Beantown, Sarah Palin and all.
I wonder what Old Judge Lowell would
have to say about the hubbub, the celebrities, as well as the cause célèbre,
let alone the issue of big government increasingly wiling to scapegoat citizens
rather than converse with them? He’d likely welcome the ability of such a crowd
to be able to gather in the light of day rather than under the dark of night to
engage in the political process. He’d certainly welcome a government big enough
to support rather than suppress such a gathering. He’d know that a crowd of
independents is either not a crowd or not independent. He’d also likely
understand, as we all do, that it’s hard to hear one’s self think, let alone be
heard, in any crowd.
My thinking: beyond the Kool Aid of
liberal truthers and the tea-sipping conservative birthers, beyond the
ideological believers that make up the core of our current two party system,
the independent minded middle class, which is really the investment class who
have saved for their own retirement rather than relied on the government to
provide it, is getting increasingly sick and tired of self-serving politicians,
policies and processes which ignore a common denominator and shared desire for
a more balanced approach to governing, a greater balance of opportunity for
all, and a more balanced checkbook when it comes to spending on both goals.
We understand that it’s our future
that hangs in such a balance. But we seem to have forgotten that it has done so
throughout the history of our country. My investment view: the desire for a
better balance is not the purview of any party or movement. It is the principle
of a people. Us.
As such, our history as a country
suggests that, despite age-old tactics of scapegoating, racebaiting, racisim,
image making and mongering, and the ratcheted electioneering rhetoric from the
power brokers that be, this is a hopeful moment for investors.
Born of the ability to openly debate
and invest in a better future, Americans remain the shining example of being
able to achieve just that. Against the grain of those who stand for their own
vested interests, investors in America stand to benefit for centuries to come.