How sausage is made

I recently returned from a three day trip to Washington D.C. where I attended the annual Security Traders Assoc. conference and met with a few of our elected officials as a representative from the board of the San Francisco affiliate of the STA. Generally the convention is in a more exotic location, but this year since Wall St. is everybody's favorite punching bag and with so much pending legislation that will fundamentally alter US equity markets, the organizers thought it would be prudent to really focus on the political end of our existence.


Any way you slice it the trip was interesting. It is not often one gets to take a peak inside the sausage factory to actually observe the sausage being made. Our mission for the first day was for each affiliate chapter to meet with their respective representatives and present our agreed upon talking points. Since we have the luck to reside in Nancy Pelosi's district, our task was to present our talking points to her office. I say her office because she's much too busy to sit and listen to what her constituents have to say in person, so we met with her senior advisor instead with the hope that he would present at least the bullet points of our meeting to her. Although there were finer points to our message,  the gist of what we wanted to get across was twofold: you will create many unintended consequences with legislative overreaction if you choose to punish Wall St; and as easy as it is to demonize the greedy, short-sighted excesses of the minority on Wall St in order to agitate public opinion, there are many thousands of hard working, tax paying regular people in the financial services industry that are quite the opposite of the greedy, short-sighted individuals who make the front page of the WSJ. We wanted to put a human face on Wall St. Whether or not they can recognize a human face is up for debate, but you can't say we didn't try.

Here are some of the highlights:

Me to Pelosi's Senior Advisor: "Gov't spending is 24% of GDP and Tax receipts are 15% of GDP this year. If you raise taxes on the top 2% of wage earners, those who make <$250k/yr, the extra income will only cover the deficit for 9 days. I imagine raising cap gains tax 5% as proposed will have about the same effect. How do you justify a tax increase when the result is like throwing bricks in the Grand Canyon?"
Senior Advisor: "I'm not the tax guy, you'll have to ask her." So I asked her, and she's not replied yet. It's been 1 week.
Same exact question to Rep. Kanjorsky (D-PA) during the Q&A session of a speech.
Answer to me: "Well I just hung up the phone with a certain gentleman from Arkansas this morning(referring to Clinton) and he reminded me of back in 1994 when we had a budget surplus...meanders off track....HEY that's a negative attitiude!"
ME: "That's reality sir"
Kanjorsky: "well blah blah blah blah (meanders for another 3 minutes about who knows what) my grandkids are really cute." At least that's what I heard.

Chairman of the STA to Sr. Pelosi Advisor:"..and the perception is that Obama and Pelosi and are anti-business..."
Sr. Pelosi Advisor: "Yes, that's the perception, but nobody ever backs it up with facts. In fact, we're right now trying to lower taxes for small businesses with a bill that will be voted on tomorrow, but is facing stiff opposition from the GOP."

I wondered why the GOP would be opposed to lowering taxes for small business owners, but I did not ask him. However later in the day I got the Republican point of view on the measure...

Me to Tom Price (R-Georgia): "Dr. Price, what exactly is it that your side of the aisle objects to about the bill the Democrats are proposing that will lower taxes for small businesses?"
 Rep Price: "What they want to do is buy stock in community banks so they can control them and dictate exactly to whom they can lend. Do you want Government deciding who gets loans and who doesn't? I don't think that's government's role, and I will fight it to my end." 

The Democrats really screwed the pooch when they jammed Obamacare down our throats, now it is pretty much accepted fact that the Republicans will win back control of the House in November. I sincerely hope they do not have a "now what?" moment and squander this opportunity by governing like the dog that finally caught the truck. Here's some advice: do not turn a deaf ear to the simple message America is screaming. Live within your means Washington; we don't need or want the tentacles of government permeating every aspect of our lives; and please get out of the way and let us get on with creating growth through ingenuity. That's what America is all about.