November 10th, 2008

A HANDBOOK TO THE OBAMA PRESIDENCY

The election is over and it’s time to root for our president.

You may find the notion corny, but as a fan of politics and American history, I know that one of the foundations of our great nation is the fundamental notion of one of the most famous clichés in history; the majority rules…with the consent of the minority. Most people forget and/or leave out the second half of that great quote, which is pathetic, since the second half is the powerful part. Either way, it is time for the minority (the 48% that didn’t vote for him) to consent to giving President Barack Obama a chance at least.

No one should be rooting for Obama to fail. Even the most ideological right wing whacko should acknowledge that any major failures on the part of Obama sets an already struggling (relatively) America further back. Rooting for the president to fail so that he can be voted out in four years is a small, narrow minded view of the nation as a whole. Obama will have a tough fight on his hands in November 2012 regardless of what he does or doesn’t do in his first term.

Given that, there is no doubt a high level of anxiety of what will occur in the next four years. Perhaps the most comical reason I heard during the entire election campaign for voting for Obama was the utterance, “well it can’t get any worse,” referring to the current state of affairs in America and the past 8 years apparently of George W. Bush. To such voters I advise more than a little caution. It can always get worse; in America today compared to the rest of the world, it could get much much worse so let’s avoid such asinine talk, shall we? Incidentally, I know that most people hate facts, logic and reason, but the last time a president was elected under the notion that things couldn’t get worse was following years of Republican rule, turmoil, scandal and an un-winnable war; 1976, when America elected unknown Jimmy Carter under the guise that “things couldn’t get worse.” They did, in fact they got much worse, and it took 10 years for the nation to begin recovering. I am not predicting or hoping for such an event in an Obama presidency, but at the same time I refuse to blindly cling to clichés and vacuous platitudes as a recipe for the next four years.

As the nation prepares for the most liberal, most inexperienced, most un-accomplished president in modern history, there are legitimate reasons to be concerned and cautious. Even if Obama were to simply do what he said he was going to, many of us should be very concerned about our personal finances. Beyond that, we know that all presidents over-reach once they are in office, and Obama, with total control of a democratic congress is perfectly positioned to do far more than he ever said or promised he would. It is ironic that with no real Obama record of accomplishments from the past to point to, we are left with his campaign slogan to carry us forward; hope. We must hope that he doesn’t govern from the far left and we must hope that he chooses advisers who help educate him on how to at the very least stay out of the way of the greatest nation on Earth. Hope is all we have. Crap.

In light of what we do know about Barack Obama, the democratic congress, and the possibility of legislations that will be enacted I have put together a list of things to consider as you prepare for the next four years. Some I advise, others I simply mention for your own edification. In any case, I would get to work; Obama takes over in less than 2 months and will begin enacting his agenda on day one; so you best be prepared.

Sell Capital Gains: If you have any sort of large investment that is ready to turn a big profit, sell it before 2008 ends. This would include rental properties, land, large stock deals and anything else that you invested in long ago which will cause you to have to pay what is called “capital gains taxes.” Obama is going to increase the tax you pay on smart investing by at least 10% and probably more. You either need to sell it now, or resign yourself to holding the investment for at least 5 more years, lest you pay steep penalties for your success. 

Start a business designed to fail: It’s no secret that Obama is going to tax the living shit out of successful people in America. The secret is how low that threshold goes. When Bill Clinton was elected president, he promised a middle class tax cut and then delivered an enormous tax increase to everyone. Since all we can do with Obama is hope, I say we’re wiser to prepare for the worst. One way to lower your taxable income while not necessarily diminishing your quality of life would be to open a small business, right now, that will suck up your discretionary income under the guise of “business expenses,” while not actually having a chance of being a successful business. Obama has this brilliant idea to punish success, so you need to go into business to fail. Start a legitimate business that caters to your personal interests that you know can’t succeed so that it won’t be taxed, but you will reap the rewards of the business expenses incurred by the company. For example; start up a business called “Ilove totravel.com,” and buy the website, some letterhead and a business phone line. Then, travel your ass off, tax free, by using your “business account,” (which is nothing more than a large portion of your income which is being “invested” in your upstart business). Sound dirty? If it does, then you hate success, ingenuity and capitalism.

Buy a ton of cigars right now: I told you months ago about the horrific SCHIP program, which is a government run form of socialized medicine under the false guise of protecting children. Last year, the democrats barely missed vastly increasing the funding of SCHIP by instituting a massive cigar tax on America which would run most cigar shops out of business and make most cigars un-affordable to most people. With the Democrats having full control, it is hard to imagine the SCHIP legislation not passing in 2009. Buy a big humidor and a ton of cigars you love now, because they may cost more than $30 each by the time the congress is done with their latest form of behavior control.

Secure long term funds: Hopefully you have some form of safe, long term, retirement money somewhere. It is hard to imagine an Obama presidency not making things more volatile in the short term at least economically. Tax increases and big spending destroy economies and we’re about to get a ton of both. Move a portion of your money into interest guaranteed CDS and annuities to avoid being a victim of further fall out.

Watch your 401k: There is a lot of buzz right now about a variety of ways that congress wants to seize control of America’s 401k plans, under the guise of “protecting you.” Some of the plans include taxing your contributions; others include not allowing you to invest the money the way you want to. Keep an eye on this and consider dissolving your 401k and/or moving it into a private account. There’s no telling how far congress might reach on this one, so one idea is to start up that business we discussed earlier and invest a large sum of your money into what’s called a SEP-IRA. It’s a self-employed 401k that theoretically, should be safe from congress.

Buy Gold: If you believe that Obama is a wimp who will allow further turmoil in the world and may even fall asleep at the switch, thus allowing Iran to gain nuclear weapons and/or another terrorist attack in America, then buy gold. There are plenty of ways to invest in gold though bankers, stock brokers and the internet and if you believe that the world is headed for further uncertainty, then you should be invested in gold. When everything else falls apart, cash is worthless and gold becomes king.

Hoard Guns? Gun shops are seeing a run on handguns and rifles as people stock up now, getting ahead of what they believe will be an assault on their second amendment rights. I haven’t jumped on this bandwagon yet as I see no indication that Obama or the democrats will overreach into gun laws. There are too many southern democrats who know that Americans love guns too much to further restrict their rights. However, I do cede that if another “Virginia Tech” type massacre were to occur, the democrats would use such a tragedy to enact further restrictions on gun purchases and ownership. As a man who owns a few guns, I have always believed that you can’t have too many, so stock up anyways.