Investing–The New Rules: Sarah Palin Will End Economic Crisis

Palinomics!

Governor Sarah Palin is going to bring the economic crisis to an end. That’s Rob Bennett’s prediction. The twist is that Bennett claims Palin may be able to accomplish the task “before she becomes President.” Is Bennett going out on a limb–or climbing onto the limb and sawing it off?

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Investing — The New Rules
Palinomics

#8–June 21, 2010

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Governor Sarah Palin is going to bring the economic crisis to an end.

That’s my prediction.

I think she may do it before she becomes President. It would make a good talking point in the debates to be able to say that you solved the nation’s most pressing problem before even taking office, wouldn’t it?

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I was reminded of my favorite moment from the Palin/Biden debate by Jay Nordlinger’s entry at the National Review blog last week. Here’s what Jay had to say:

”In the general election of 2008, the candidates talked a lot about the home-mortgage crisis, as well they should have. And they said how evil Wall Street was — how evil the lenders were. They had hoodwinked the people and all.

“But Sarah Palin did something quite unusual — she certainly did this in the vice-presidential debate. She said that the borrowers had a role to play too: something to answer for. Didn’t our parents tell us to live within our means? she said. “We need to make sure that, as individuals, we’re taking personal responsibility through all of this.”

“You hear about “speaking truth to power.” Everyone loves to do that: “speak truth to power.” There is such a thing as speaking truth to the people, too. Politicians, understandably, are reluctant to do this. Palin isn’t.”

Palin’s gutsiness on this point resonated with lots of ordinary folks. Both Republicans and Democrats participating in a Frank Luntz focus group responded with enthusiasm to Palin’s assertion re the economic crisis that “we have an opportunity to learn a heck of a lot of good lessons from this and say ‘never again will we be take advantage of.’”

Precisely so.

Our economic and political systems are under threat today. The Get Rich Quick investing strategies promoted relentlessly for the past three decades have set back our retirements by many years. The financial misery caused by the Crony Capitalists backing the Buy-and-Hold “strategy” has caused many to lose confidence in our free market economy and the next stock crash will undoubtedly cause many more to do so.

But all is not lost! As Palin observes, with crisis often comes opportunity. The reason why the defense of Buy-and-Hold has been so savage is that the Crony Capitalists promoting it know well that the average person loves the idea of being able to invest more effectively and hates the Get Rich Quick aspects of today’s conventional investing wisdom. The phrase that haunts the Crony Capitalists when they are trying to drift off to sleep at night is: What if they find out?

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ALSO at DBKP:
* Investing–The New Rules: Dollar-Cost Averaging is a Loser
* Investing–The New Rules: John Bogle’s Evil Twin?
* Investing–The New Rules: Stock Return Predictor Not a Case of ‘Too Good to be True’
* Investing–The New Rules: The Stock Investor’s Weather Report
* Investing–The New Rules: Harness the Power of The Stock Return Predictor
* Investing–The New Rules: Get the Odds on Your Side
* Stock Investing: Much of Today’s Understanding is Primitive

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There’s an old saying that argues that “you cannot con an honest man.” That’s what Palin is getting at when she says that we need to focus more on the personal responsibility aspects of today’s crisis. We were not responsible for the con. But we permitted it. It is by wising up to what was done to us that we empower ourselves to make up for the losses we have suffered and to get about the business of learning of the investing strategies that insure that “never again will we be taken advantage of.”

I’ve been writing about the flaws of Buy-and-Hold and of the need to make the transition to Valuation-Informed Indexing for eight years now. There have been hundreds of people who have offered kind words of encouragement and gratitude. But there has been something important lacking in our discussions going back to the first day. “Where is the anger about what has been done to millions of middle-class people?” I keep asking myself. “Why do people not stand up for themselves?”

We need to get mad! That’s when good things will begin to happen. That’s when we will see the Buy-and-Hold house of cards tumble to the ground.

One of the women interviewed by Luntz pointed to an encouraging sign when she observed that “we all feel angry.” None too soon, I might add! And one of the men interviewed by Luntz added that “I felt it [Palin’s comment re the need for us to own up to our personal responsibility for the economic crisis] was a 911 moment, it was a patriotic thing.”

Yes. The amount of overvaluation in the stock market in January 2000 was $12 trillion. A free market economy cannot take a $12 trillion hit without it doing serious damage to all of our plans for the future and even to our confidence in our system of government,. The Crony Capitalists who push Buy-and-Hold are not terribly concerned about the human misery they have caused. They have their own problems.We are on our own re this one.

We can do this! We don’t need the “experts” to tell us how to invest. Common sense is what works. Common sense tells us that we should not have stayed with heavy stock allocations when stocks were priced to provide a long-term negative return. There aren’t too many politicians today who have what it takes to dare to say that out loud. Governor Palin is friends with real live people who are suffering real live pain as a result of this crisis. That makes a difference.

Common sense may not be spoken today because it has come to represent a threat to people who are making huge amounts of money persuading people to ignore its call. But all signs are that things are going to start unraveling fast after the next crash. Governor Palin is the only political leader I can think of who is today positioned to be able to retain people’s confidence when the work of our betters leads to its inevitable bad end.

Palinomics is going to be comprised of one part common sense and one part personal responsibility and one part optimism and one part courage. In today’s United States, that’s a winning combination that no other politician appears to be willing or able to advance. It gets us back to a free market system that works.

by Rob Bennett
images: DBKP file

Rob’s interview with ABC News is here. His bio is here. And please don’t even think of failing to read these Important Cautionary Words.

ADDITIONAL SITES referencing this piece:

1) Conservatives 4 Palin

2) Texas for Palin

3) Free Republic

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