Why People Run for Public Office and How They Quickly Become Compromised  - Politicrossing
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Why People Run for Public Office and How They Quickly Become Compromised 

When they first assume office, politicians even with the best of intentions can run afoul in many ways.

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 In today’s highly toxic political environment, why would anyone choose to serve in government? Most people, presumably, run for office to achieve one or more goals. These goals might include serving the public good, achieving fame and positive notoriety, and obtaining more personal power.

At the county and local level, some individuals run for elected office with a primary goal of becoming more widely known, as opposed to merely getting elected. Attorneys, accountants, bankers, entrepreneurs, and service providers who’ve run for office have long since discovered that campaigning, in and of itself, is an effective form of public relations and promotion.

Seeking the Pot of Gold

Some people run for U.S. Congress with a specific cause in mind. Even in those cases, progress towards other goals is still a factor. It’s certainly acceptable both to serve a constituency and to gain some recognition — two goals that contemporary professionals often pursue.

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Politicians with even the best of intentions when they first assume office, alas, can run afoul in many ways. Three traps, among many others, that are most insidious include cronyism, profiting from insider knowledge, and capitulating to the mainstream press. Let’s look at each of these three traps.

Trap #1: Cronyism

Suppose you’re newly elected to Congress. You’re excited. You want to do well. You want to ensure that your constituency is represented to the utmost degree. Many people along the way, undoubtedly, have helped you. And, that is where temptation lies. Certain individuals might ask for favors. Or, you will feel beholding to some people, even if they have not asked for favors.

When the opportunity arises to award a contract or benefit a vendor, the natural propensity of human beings is to favor who they know, who they like, or who those with whom they are familiar. As such, objective criteria might suffer, such as who can do the best job, who has submitted the best proposal, who has a proven track record, and who can we absolutely rely upon time and time again.

In U.S. history, from newly elected state senators to presidents, reliance upon cronies has come back to haunt politicians. This was the case with Presidents Jackson, Grant, Harding, Hoover, Johnson, Clinton, W. Bush, and Obama, among others. Critics claim that Trump belonged on the list, but this was not so historical comparison. Joe Biden is steeped in cronyism beyond hope and reason

Trap #2 Profiting from Insider Knowledge

Politicians are privy to information that the rest of the population is not. They learn about impending trade deals, state or regional economic plans, and international relations. Politicians and public figures must tread carefully: How one and one’s family benefits, as a result of the insider knowledge, invariably becomes public at some point.

Two contemporary politicians, exposed by the same investigative author, have so egregiously flouted the norms of the respective positions, one wonders why they are still held in high esteem. Hillary Clinton, as U.S. Secretary of State, unceasingly traded on her position to bolster the finances of the Clinton Foundation and of her family. This has been exhaustively documented in the book, Clinton Cash, by Peter Schweizer.

Another politician, now acting as president, and four members of his family, has benefitted extensively over several decades from insider knowledge and influence peddling. His name is Joe Biden. Profiles in Corruption, also by Peter Schweizer, documents how the Biden family has profited enormously during Joe’s 47 years in Washington. Whether you’re on the Left or the Right, it is difficult to find fault with Schweizer’s sources and conclusions.

Capitulating to the Mainstream Press

Politicians and public figures lose their way via capitulation to the mainstream press. Our society is over-saturated by media. The mainstream media leans decidedly left, and hounds politicians and government officials who lean right, at least from the day each person assumes office. Senator Mitt Romney (R-UT), perhaps always a RINO, is chief among GOP politicians who capitulate to the Left-wing press. His cringe-worthy statements against his own party are well-documented

John Roberts, Chief Justice of the Supreme Court, is another example. Roberts’ conservative views increasingly have been moderated over the years as a result of the relentless pounding he endures from The New York Times, The Washington Post, ABC, NBC, CBS, NPR, and numerous other media outlets. Steadfast and determined individuals, committed to their ideals, such as Justice Samuel Alito and Justice Clarence Thomas, do not succumb to the constant pressure of the press.

Can politicians and public figures on the Left be unduly influenced by media outlets on the right? Presumably, but it rarely happens. The Right doesn’t enjoy the massive media clout that the Left has enjoyed for more than 75 years. And the Left, which once subtly enforced a strict code of ideological compliance, is not so subtle anymore, as we all know.

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Jeff Davidson is the world's only holder of the title "The Work-Life Balance Expert®" as awarded by the U.S. Patent and Trademark Office. He is the premier thought leader on work-life balance, integration, and harmony. Jeff speaks to organizations that seek to enhance their overall productivity by improving the effectiveness of their people. He is the author of Breathing Space, Simpler Living, Dial it Down, and Everyday Project Management. Visit www.BreathingSpace.com for more information on Jeff's keynote speeches and seminars, including: Managing the Pace with Grace® * Achieving Work-Life Balance™ * Managing Information and Communication Overload®



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Micro-tasking, not Multitasking, for Effective Performance

Professionals who can micro-task are in demand; multitaskers are doing themselves and their organizations a disservice.

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Much as been discussed about multitasking and fortunately, much of what has been written exposes the myth that multitasking represents. Instead of making us more productive and having a greater output, we tend to slow down on the very things that were trying to speed up on, and we end up making more errors.

Micro-tasking, by contrast, is the ability to compartmentalize and to focus in quick, short intervals on a variety of items that compete for attention — a vital skill for career professionals. Micro-tasking is effective for quick decisions, and for handling routine and short term tasks term nature. Multitasking is the attempt to handle two important tasks at the same time. It is not to be confused with micro-tasking.

A Skill to Cultivate

Some workers have little choice in the short run but to work in a distracting, noisy environment. Some employees, in particular, were retained to be able to quickly shift their attention from one issue to another, focusing on each issue as needed.

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In an interruption-based environment, such as a hospital, police station, retail store, or airline ticket counter, the ability to micro-task is a valuable skill. Throughout the course of a day, a manager in such settings might encounter a variety of people asking questions and voicing concerns. For sale managers micro-tasking can make all the difference in making quota or not.

Tasks that require our sharp attention necessitate that we slow down, focus, keep interruptions at bay, and work as effectively as we can, toward completion. Handling two tasks simultaneously, each of which require sharp attention, is a prescription for poor results.

Be in Demand

Professionals who can micro-task are in demand. Others, who engage in multitasking, are doing themselves and their organizations, a disservice.

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When the Market Crashes, There is Only One Place to Hide

Here’s the short, simple reality to understand: in powerful down markets, every asset class gets clobbered.

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Pile of Cash

“This is Wall Street, Dr. Burry. If you offer us free money, we are going to take it.”

-Smug, Know-Nothing Goldman Sachs Chicky in The Big Short

My firm didn’t operate too differently from the above statement, frankly. but there was that one time we said no…

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In 2007 or 2008 – I don’t recall exactly – a mutual fund client asked us to create a defensive portfolio they could launch as a new product.

Sounds simple enough, right? Except, they weren’t looking for a portfolio loaded with utilities, healthcare and consumer staples.

What they wanted was a portfolio of stocks that would rise when the market was falling (it already was falling, but Wall Street is just as good at closing the barn door after the animals have left as are elected officials).

I suspected this would be tough to create. Once we ran our studies, indeed we realized this was an impossible request and for the first time ever, we declined the portfolio request.

Here’s the short, simple reality to understand: in powerful down markets, every asset class gets clobbered. *

Put in a more fancy-pants sounding, Wall Streety way: during crashes, correlation skyrockets. In this case, it was effectively impossible to create a portfolio of stocks that would rise in a crashing market; all stocks crater in that environment.

Correlation is measured on a scale of -1 to 1. A reading of 1 defines perfect correlation, -1 is perfect inverse correlation and 0 means no correlation at all.

A reading of 1 is easy to understand but think of the others this way. The correlation of wearing surgical masks and the spread of covid almost certainly resides near zero. Jen Psaki’s relationship with the truth? Probably a -.9 or so.

As an aside, both high and low correlations have value. For instance, we had a good friend in college who we came to realize had a sense of direction that had to be very close to a full negative 1. If he were in the car and thought we should turn left, the rest of us knew with total certainty to go right.

With correlation, readings at or near 1 and -.1 are rare in anything that actually requires study, so measurements above .4 already start to imply strong correlation.

When we looked at the historical track record we found that in severe downturns, all asset classes fell with the market at correlations above .5. It was eerie.

What about foreign stocks? Um, no… that’s actually a double whammy of bad news. Not only do their markets get hammered at least as hard as ours, currency declines magnify those losses. We can all appropriately hate what our leaders are doing to destroy the U.S. Dollar, but in a world of fiat currencies it is ours the world runs to as the safe haven. Most foreign currencies decline in value as a result.

Cryptos? Who the hell knows, but why would they be spared if gold isn’t?

Wait, what about gold? Yeah, it will probably act like a safe haven in a down market but in this case that probably means it will just decline less than stocks overall. For instance, while the Dow literally got cut in half from October, 2007 to February, 2009, gold’s peak-to-trough decline in 2008 was fully 25%.

By being down “only” 25%, did gold perform better than the market? Yes, but correlation of the direction of the movement skyrocketed even in this safe-haven asset class.

Quick disclaimer: I currently own gold and silver and will be holding these positions. But I hold them in the proper size and I am also expecting them to initially decline when the market really tanks.

Important note: if you’re holding gold and silver mining companies – which, after all, are just stocks – you can expect them to get hammered just as hard as all the stocks around them. The relative outperformance of bullion itself won’t save them; again, just go look at 2008.

Okay, so what the heck should someone do right now?

Well, I don’t like giving “right now” investment advice so I’ll say what I have been saying all year to close friends and family: if you’re fully invested, raise at least some cash in your portfolio. I’ve been advising a minimum of 20% but that figure will vary depending on your personality.

As I’ve been telling them, think of it this way: if I’m wrong and the market keeps ramping higher on the back of all this stimulus – and that indeed is the only reason the market has continued its 2021 surge, btw – and you’re still 80% invested, you’ll still be making a lot of money and you’ll feel okay about it. Sure, you’ll mutter that I was early with this advice – I have been all year and still could be depending on central bank responses to this decline – but you won’t resent me for the input.

If you stay fully invested, however, and the market tanks by 40%, you’ll feel ill. Having some cash on the sidelines provides for a rainy day, keeps something available with which to buy stocks near future lows and, most importantly, will do wonders for both your decision making and your psyche.

When people get stuck for cash – margin calls, mortgage payments, whatever the need may be – they make all sorts of bad decisions. They’ll sell whatever they have to and often, it’s psychologically easier to sell their “winners” along the way than it is the stocks that have been crushed the most. What many people end up with at bottoms is a portfolio full of the crappiest individual names.

‘Oh great,’ you may be thinking, ‘you’re telling us this on a day when the market is already down 500 points. Thanks a lot.’

True. Actually, I’ve had this post 80% drafted for the last 10 days or so, it just felt like that this might be the jarring market day in which readers would take it seriously. Let me explain by doing a little mind reset with you:

You may have a 401k that had risen, say, from $200k to $500k over the last three years (until 2 weeks ago). Awesome! But unsustainable.

After the market weakness of the last couple weeks, maybe its value has declined to $450k. If you’re the type that thinks my advice makes sense, but you don’t want to sell any stocks or mutual funds because they just fell from $500k, your mindset is all wrong. Sorry to be so blunt but it’s true.

Here’s what you actually have on your hands: a 401k that has risen from $200k to $450k over the last three years. Still awesome, also unsustainable.

If you think you’re the one genius who can nail market tops perfectly and you’re now certain that the market will soon regain its recent highs, re-read my last sentence and get your head on straight.

That said, at this moment I do have to admit that I don’t know if this is the start of the big correction. On the one hand, a few too many people for my taste are looking for that crash. On the other, how insanely optimistic did the market have to be that only now it is noticing the slow-moving Evergrande disaster in China that has been known for a year and plainly visible for nearly a month?

Regardless, the point is this: if this is the start of the big correction – or even a true bear market – then this is only the beginning.

We’re at such stratospheric valuation heights – the highest in history, generally – that the next big correction will take stocks down 30, 40 or even 50%.

So yes, it’s still okay to be raising at least some cash today. Even today.

Tighten up stop losses. Raise cash right now from zero to 5% if your end goal is 20%. Redirect future 401k deposits to the money market fund rather than the high-growth stock funds you’ve been riding.

In short: take action. Don’t be paralyzed and again keep in mind this simple reality: in powerful down markets, nothing gets spared. The only place to hide is in cash.

This post has me re-awakened. More soon…
FDG

*Historically, there has been one other place to hide in down markets: high grade, U.S. bonds. That will likely still turn out to be the case – indeed, bonds are rallying today – but what’s the point? The rates offered by today’s bonds are so meaningless as to be roughly equivalent with cash so my preference at this moment in time is for cash.

 

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