In August, at the LPL Financial National Conference, I had the honor of hearing the 43rd President of the United States speak. He spoke of his experiences as President, ranging from the 9/11 attack, the Afghanistan and Iraq wars, and the financial crisis. Regardless of your political views, there is no doubt that this was one of the most challenging times in our nation’s history. It was great to hear his perspective of what was taking place behind the scenes during this historical time period.
One particular section of his speech I thoroughly enjoyed was when he spoke about entrepreneurship, freedom, innovation, and vision. He emphasized the importance of low taxes, and that freedom makes prosperity possible.
During these times of uncertainty, we must remember the fundamentals of economics. As economic data indicates, the economy is improving. We have to wonder if this is due to a true recovery or if it’s due to so much government stimulus. In the long run, the level of government spending drives the level of taxes. It was Chief Justice John Marshall who famously said, “The power to tax involves the power to destroy.” If you tax it enough, you destroy it all together. At the end of the day, we must remember that government spending is expensive. The economy is nothing more than the sum total of all of the transactions that occur. The more economic activity, the larger the economy and the more people improve their lives.
We continue to remain in a conservative strategy and watch government spending with a skeptical eye. Concerns are still there regarding banking, commercial real estate, the ending of certain government spending programs, and geopolitical activities. The question remains, “Is this economy for real or are we in a bear market rally?”
After his speech and taking questions and answers, I had the opportunity to meet George W. Bush in person. It was truly a historic moment for me to meet a world leader who led our country through such turbulent times.
