Tuesday, April 25, 2006


Serious Investors Turning To (and perhaps into) Democrats

Now this is interesting:

Democrats Beat Republicans in 2005 Funding on Wall Street

Democrats outdid Republicans last year in attracting political donations from investment banks, brokerages and fund managers for the first time since 1994, helped by support from hedge funds and companies such as Merrill Lynch & Co.

Democrats got $13.6 million, or 52 percent of the financial industry's $26.3 million in political donations in 2005, said the Center for Responsive Politics, a nonpartisan Washington group that researches the influence of money on elections and public policy. In the two years leading up to the 2004 presidential election, Republicans received 52 percent of the $91.6 million given by the industry.

"Wall Street wants change" on issues such as the Iraq war and the budget deficit, said James Torrey, chairman of the Torrey Funds, which manages about $1 billion. "I'm finding people who are registered Republicans who are saying to me, `what can I do to help?'"

What can they do?

For a start, start trying to make money instead of just beat taxes. There's a saying that "pigs get fat, but hogs get slaughtered." Investors who want to make money legally have plenty of ways to do so... and pay taxes on inflation-adjusted returns at any rate that has been part of the tax code since its inception. Great fortunes were made under FDR and Truman. Even Reagan deserves a little bit of credit-- for joining the agreement to set the taxes on investment income to be the same as they were on other forms of income, which as I recall worked out to a tax increase.

But some investors got greedy, and figured out that instead of paying a piece of their gains, they could buy off politicians and corrupt America more cheaply. The system has become so corrupt that Ken Lay can actually stand in front of a jury and say that it was all just a misunderstanding.

So now, America is no longer necessarily the first stop for investment. Except for oil and defense, blue chips have sucked wind for years while India, China, Brazil, and other foreign countries have booming markets.

But the hog slaughter is yet to come. It's when people wake up and the dollar has reached parity with the peso.

Living on 250,000 pesos isn't all that comfortable if you've come to expect a lifestyle of $250,000 dollars.

If investors would vote their wallets, they sure wouldn't be voting Republican.
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