As much as we caution investors against making knee-jerk reactions to the news, your investments and your long-term planning don’t exist in a vacuum either. That’s why when I attend conferences like the Barron's Top Independent Advisors Summit or the Schwab Impact Conference, I like to come back with a report that I think will be beneficial to my clients and listeners. It’s just another way that we at Keen Wealth try to give the folks we work with a comprehensive financial-planning experience.
Matt Wilson and I recently travelled to Washington, D.C. for a series of briefings organized by my friends at CEO Coaching International. And yes, on the one hand, it seems like the tumult in Washington and the coming midterm elections could have serious implications for things like tax planning, estate planning, and even health care. But I also came away from these discussions feeling a bit more hopeful about our country’s politics than I have in quite some time, and I remain bullish on our economic outlook for the rest of the year.
On today’s show, I invited CEO Coaching International’s Chris Larkins to give his own perspective on what we learned in D.C. In addition to being a successful entrepreneur and CEO coach, Chris has a comprehensive political background. His expertise helps us cut through the noise that’s been clogging our TVs and social media streams and delivers solid, practical insights on the state of our politics and economy.
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Key Insights from Chris Larkins on What’s Happening in Washington
1. Civil discourse is still the way forward …
What I really appreciated about the trip was how balanced and thoughtful our speakers were. After hearing from Simon Rosenberg, President of the New Democrat Network and a former member of Bill Clinton’s war room, we listened to former Republican Governor Robert Ehrlich, who served a successful term in deep-blue Maryland. Sure, both men had perspectives that were in line with their respective parties. But they made their points without insulting anyone, and they didn’t spare their own parties from criticism.
“To the extent that Governor Ehrlich and Mr. Rosenberg took partisan swipes at the other side, this was not cable news where you have people shouting at each other across the table,” Chris says. “You had Simon poke fun at Hillary Clinton and even his former boss, Bill Clinton, when appropriate. You had Governor Ehrlich make jokes about the Trump Administration when appropriate. When Governor Ehrlich was asked about Simon's complaint that the Republicans passed the new version of health care without allowing the Democrats to read it, Ehrlich's response was, ‘You're telling me the Democrats are complaining about a health care bill that no one read?’ Even the Democrats in the room laughed.”
2. … but it’s not the norm.
When this trip was originally organized, we had no idea we’d be inside the Capitol Building during the most contentious Supreme Court nomination in ages. You could definitely feel the tension, the suspense, the passionate points of view, and yes, the vitriol just walking around Washington.
“It's been a long time in American history since we had another period like this, where civil discourse has so thoroughly broken down,” Chris says, “when people are more interested in calling each other names than actually getting into debate and finding common ground.”
Ironically, the “good government” movement that led to the elimination of earmarks about a decade ago has made good government more difficult in some respects. Chris notes that politicians have less incentive to make compromises because it’s harder to incorporate those compromises into a finished bill. Even reasonable expenses like fact-finding missions that might bring our leaders in contact with broader ideas can come under fire from political watchdog groups.
3. Our leaders agree more than they might realize.
That’s why another speaker, Democratic Representative Mark Takano of California, mentioned that he’s in favor of reinstating earmarks but making the process transparent.
Surprisingly, Republican Representative Morgan Griffith of Virginia, who was offering the counterpoint at this event, said that he agreed with that proposal.
“Congressman Takano looked at him really quick, and said, ‘Oh, you do support that?’” Chris recalls. “With sincere surprise. You had two polar opposites in Congress who agree on the same thing, and they never realized it.”
Not all of the commonality that we heard in Washington was that specific on a policy level. But time and time again, speakers reiterated the importance of doing what’s best for taxpayers, how our system of checks and balances should operate, and the importance of proper government oversight and regulations.
The trick is getting our leaders to translate those broad agreements into effective laws.
Says Chris, “I wouldn't be surprised if sometime after that meeting, Representatives Takano and Griffith found occasion to speak to each other and said, ‘How can we work together on earmark reform?’ That's one of the things that gave me hope.”
4. The results of the midterm elections are anybody’s guess.
“My first prediction is that there's a 50% chance that my predictions are wrong,” Chris quips. A month is an eternity in politics, so there’s still plenty of time for world events to shape voters’ minds before they head to the booths in November. But if the elections were held today, Chris thinks the Democrats would have a good shot at retaking the House, and that the Republicans might pick up a seat or two in the Senate. And while neither side will be happy with divided government, the markets could respond positively to a more stable political environment.
“Sometimes divided government produces the best results,” Chris says. “Newt Gingrich working with Bill Clinton. Tip O'Neill working with Ronald Reagan. Senate Majority Leader George Mitchell of Maine, on the Democratic side, working with George H.W. Bush in the early '90s. Sometimes that divided government produces really good results. I'm hopeful that there's a possibility for that.”
After experiencing some surprising moments last week, I’m also feeling hopeful that our lawmakers – for all their quibbling – are still willing to have important debates and discussions. There’s more happening on the Hill than what’s highlighted in the daily news. And however the elections shake out, my team at Keen Wealth is prepared with practical strategies to help maximize your investments.
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Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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