Thoughts from the Frontline

“Taxation is the price we pay for failing to build a civilized society.” – Mark Skousen “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” – Ronald Reagan

Vizzini: He didn’t fall?! Inconceivable! Inigo Montoya: You keep using that word. I do not think it means what you think it means. – From The Princess Bride “A tariff is a scale of taxes on imports, designed to protect the domestic producer against the greed of his consumer.” – Ambrose Bierce “Vast possibilities matured into realities before their very eyes. Nevertheless, they saw nothing but cramped economies struggling with ever-decreasing success for their daily bread.” – Joseph Schumpeter on the Industrial Revolution

“Too large a proportion of recent ‘mathematical’ economics are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.”  – John Maynard Keynes “Simplicity does not precede complexity, but follows it.” – Alan Perlis “Stop trying to change reality by attempting to eliminate complexity.” – David Whyte

I have been in Washington DC for the last three days. The ostensible reason was to participate in a board meeting of a public company, Ashford Inc. (AINC). We manage hotel REITs that own three hotels here in DC, and the group decided to move our board meeting up a few weeks and hold it in DC during the inauguration. That gave me the opportunity to set up a few meetings to try to gain some insight into what the first 100 days, the first six months, and the first year of the Trump administration might look like.

“The best way to predict the future is to create it.” – Peter Drucker “Do not dwell in the past, do not dream of the future. Concentrate the mind on the present moment.” – Buddha

“Quantity is being confused with abundance and wealth with happiness.” – Tom Waits “The shift from sailing ships to telegraph was far more radical than that from telephone to email.” – Noam Chomsky

“Experience is simply the name we give our mistakes.” – Oscar Wilde “Mistakes are the usual bridge between inexperience and wisdom.” – Phyllis Theroux “Economists are often asked to predict what the economy is going to do. But economic predictions require predicting what politicians are going to do – and nothing is more unpredictable.” – Thomas Sowell

“Monetary policy has less room to maneuver when interest rates are close to zero.” – Ben Bernanke “Many Americans rely on interest income from their savings to help cover their cost of living.” – John Delaney

“Price is what you pay. Value is what you get.” – Warren Buffett “There is no safe store of value.”  – Alan Greenspan “In the short-run, the market is a voting machine – reflecting a voter-registration test that requires only money, not intelligence or emotional stability – but in the long-run, the market is a weighing machine.” – Attributed to Benjamin Graham by Warren Buffett in a 1993 Berkshire Hathaway letter

“Move to Italy. They know about living in debt: They don’t care.” – John Lydon “Italians were eating with a knife and fork when the French were still eating each other.” – Mario Batali

This will be a shorter letter, in keeping with the need for holiday fun and relaxation. However, last week’s letter with my thoughts on what Trump should do generated more responses than any other letter had in the last 17 years. As you might suspect, with a topic so controversial, not everyone agreed with me. But there were many good questions and comments and some thoughtful disagreements, so I want to address a few of those. And I will specifically go into why I seemingly deviate from core conservative principles regarding taxes. It’s all about debt and the consequences of debt – that’s the overriding factor for me. And I’ll try to make the case that there are times when we just have to make hard, even philosophically unpalatable, choices.

“The problems of victory are more agreeable than those of defeat, but they are no less difficult.” – Winston Churchill “Crying is all right in its way while it lasts. But you have to stop sooner or later, and then you still have to decide what to do.” –  C.S. Lewis, The Silver Chair “I must have a prodigious amount of mind; it takes me as much as a week, sometimes, to make it up!” – Mark Twain