(written April 10, 2012 – part of my Great Upload of 2013)
So I got special, spousal dispensation to go to a mutual fund dinner the other night. As a thank-you for generating a lot of fees for the company, attendees got dinner (including drinks — pity that I don’t), a pen, paper pad, mints, and chocolate wrapped up to look like a silver bar. (Milk chocolate; they didn’t spring for the good stuff. Even financial houses have their limits, I suppose.) I guess it’s kind of like how some credit cards offer a cash-back option, which kicks back a fraction of the interest their victims clients pay them!
I met my account representative for the first time, as well; and discovered to my great pleasure that I’m taller than him. (There’s a complex in there somewhere, I’m sure of it. :) ) The funny thing is, I think he was assigned to me because the company thought I was Jewish — the tip-off being when they sent me a New Year’s greeting last September, in time for Rosh Hashanah. I wonder whether, given the economic strength of the Chinese ethnic minority in south-east Asia, financial advisor types over there send Lunar New Year cards to clientele with Chinese-sounding last names?
Summer came early to many parts of the US this spring; in March, record high temperatures outpaced lows by a 35:1 margin, and a couple states even broke their month-of-April temperature records! It also came early to the precious metals markets, starting with a suspiciously-instantaneous $50 drop in gold on Feb 29. (What self-interested seller would unload so much product so suddenly as to crater the prices they can get for it?) Up ’til then, copper’s curiously-coveted cousins had followed their usual pattern of floating upwards until roughly summertime blockbuster-movie season, leaving me sitting giddily (and smiling Cheshire-ly) in the catbird seat. Two months on, it feels more like a litter-box. :)
A couple weeks back, things got so aberrationally low that I even sold the company stock that I bought last year, netting a vanishingly small profit of about $120 after fees. (Timbits for everybody! Whee!) The money was reallocated to a gold-related mutual fund, which promptly moved… floor-ward. (Timbits offer postponed.) As pleasing as it is to get stuff on discount, there’s always a twang of regret when you see a lower clearance price, later! Of course, there’s nothing much to do but wait for the “sale” to end, and regular prices to return. Such is the nature of the “long game”. :)
(Note: “buying and waiting for the sale to end” is an astonishingly poorly-advised strategy when it comes to individual companies, but works fairly well on an index-of-companies basis. While individual companies are prone to bankruptcy, stock indexes tend to bounce back: they tend to include not just weakened companies going out of business, but the stronger ones driving the weak ones into extinction!)
How to miscalculate debts owing…
During the evening, one of the gold-pushing, silver-tongued speakers made a cringe-worthy comment to the effect that the US has a $12 trillion economy, but had outstanding obligations of $100 trillion. This meme has been making the rounds, and the reader/listener is generally supposed to conclude either that the US dollar is doomed (so they should stampede into gold as a store of value), or that the welfare state is doomed (and so we have to cut taxes on the rich. Wait, what?).
Here, the magician’s trick is to compare the size of this year’s economy, with the cumulative cost of every expense reaching decades into the future. It would be as if we told Leo, “our household annual income is X; the cost to raise you for the next 18 years is way bigger, so here’s a copy of Oliver Twist, keep in touch”. Similar chicanery is used in “tax freedom day” calculations, which overlook the fact that the yin of taxes paid is matched by the yang of public services.
Of course, I shouldn’t be overly critical of the low-taxation philosophy pushed by right-wing American think-tanks and their Canadian franchisees (e.g. the Fraser Institute). If a recent book is to be believed, one of the reasons Canada even exists today is that when the Americans tried to manifest their destiny in the War of 1812, American hawks refused to raise taxes enough to pay for a proper army, making it possible for a combination of British soldiers, Canadian militiamen, First Nations warriors, and Laura Secord, to repel them. :)
A toast to low taxes … in America, that is!
So, this coming barbeque season, on the bicentennial our southern cousins’ northern invasion, feel free to raise an occasional glass to toast the role that low taxes — another country’s low taxes — played, in the history of how Canada came to be the nation it is today! :)