Wednesday, June 11, 2008


A few people have wondered why I would let young 'dexter go this summer for reasons that are based on projections of future federal government-induced troubles for the business. The short answer is, "I ain't runnin' a charity around here! He was an 'at will' employee and my 'will' is to save money now!" Many people who have never made a payroll, never paid monthly vendor & utility bills, never worried about whether a monthly or quarterly sales goal would be met, seem to think that a business owner can wait for the flood waters to rise before filling the sandbags. Unfortunately most of the people in the House and Senate of the United States fit in this category of economic idiot. These are the people who don't say "boo" in the lean years but want to tax away everything you make in the flush years. Certainly the two guys running for President have never had the concerns of a business owner or manager. At least in the case of McCain he married into a business savvy family when he snagged Cindy. But I see scant evidence that any of their acumen rubbed off on him. The other guy? He has no clue. Zero. I try wading through his soaring rhetoric and there is very little of value there to explore. What is there is pretty much boilerplate Marxism.
--One must look ahead to thrive. The best way to look ahead at the political landscape is by following political futures trading. I use InTrade for this. Taking a look at the latest political futures we find that a Democrat controlled House will be sworn in next January. It's a lead pipe cinch at 95.5. The Senate? Democrat control is a certainty as it trades at 93.8. The 2006 Democrat takeover election ushered in a new populist/ protectionist mood in WashDC. My guess is that this extremely destructive trend will be extended with this November's congressional election.
--What about the Presidency? Well, Obama is trading at 61.3 while McCain is at 34.5. That could change, of course, but I try to strip the opinion out and let the market tell me what's happening. In fact, when you go a level deeper and look at electoral vote futures by state it looks pretty good for Obama. In the states that will be contested Obama has solid futures trading advantages in PA, CO, IA, MI, OH, NM, WI. He's showing small leads in VA, NH & NV. As for McCain, he's ahead in FL & MO. That's it. In any event, because of the way the 2003 tax reforms had to have an expiration date stamped on them (thanks to weak-kneed Sens. like Linc Chafee and John McCain, btw) there isn't much a President McCain would be able to do to stop the inevitable growth-crushing tax rate hikes that are coming.
--There is virtually no way that we avoid more regulation, higher tax rates, more job destruction, more protectionist trade policy, and less free trade in 2009/2010. Meanwhile Poindexter is in Washington DC today interviewing for an analyst's job. He's a smart kid, he figured out that the nation's biggest growth industry for the next couple years at least will be Big Government, Incorporated.