The Devil You Don’t: The Mormonization of American Politics

(or why I will not be voting for Mitt Romney)

Those who know me well are astonished to discover that I will not be voting for Mitt Romney. Several flabbergasted friends have asked me to put my thoughts in writing. So I will oblige them. By almost any political, theological, or philosophical metric I would be considered a conservative.   I  have some 30 years of experience as an investment manager, private trustee, and  General Partner of a Private Investment Partnership. I have also served two traditionalist parishes as an Anglican priest and was a campus coordinator for Inter-Varsity Fellowship at Rice University. But it is not as a teacher of philosophy (my graduate training), a former pastor, or a person of faith that I address this issue. It is as an investment professional. I have profited greatly from the freedom to allocate capital across  markets. And yes, that includes alternative investments like private equity. On this,  I agree with both Mitt Romney and Corey Booker. Private equity is a very creative use of capital. Many investors, including teacher retirement, public employee, and union pension funds benefit from private equity investments. It is gross hypocrisy for Democrats to attack Bain Capital when the pension funds of so many working people have assets allocated to private equity funds. I think I understand how markets work and have a reasonably firm grasp of economics. And that is where my problem with Mr. Romney begins.

Anyone with even a scant knowledge of market economics realizes how close this country came to complete economic disintegration in 2008. I do not blame Obama, I do not blame George W. Bush. In fact, I blame no one: not even the folks who bought homes they couldn’t afford with money they didn’t have from mortgage companies that didn’t care about the consequences. Is it fraud if both parties defraud each other? Now there’s a metaphysical question. While I acknowledge that the looming deficit is a problem that demands attention, the principal culprit for the current recession is the business cycle. To affirm that economic markets and world economies can escape the natural cycle of boom and bust is preposterous. Economies expand and economies contract.  “Progress” comes with a price. The price has a name. It is called risk. No risk, no reward.  You either pay it or you ditch capitalism altogether. It’s just that simple. Those of us who make a living attempting to identify and profit from these cycles are well aware of this. To pretend otherwise is the height of folly. Peruse a 100 year chart of the Dow Jones Industrial Average and what do you see? You see ups and downs with an obvious bias towards the upside. As a "stand-in" for the general economy, the DJIA works pretty well. Here's the good news. Eventually, we will pull out of this. What America lacks, quite frankly, isn't a plan. It's patience.

 

Why Patience is a Virtue

We need to separate the problem of colossal deficit spending (and it is most certainly a problem) from the issue of what can be done (basically, nothing) to “rescue” the economy from the normal fluctuations of the business cycle. We do not—thank goodness—live in a world without risk. If we did, our economic system would fall apart. And yes,  there are some risks that cannot be legislated away. Death, taxes, and the business cycle would certainly fall into this category. Washington politicians, however, would have us believe otherwise.  They imagine a Disneyesque economic world where no one suffers and no one pays a price. Washington's emotional elevator only goes up. This New America is a socio-economic “Lala-Land”, a place where everyone “deserves” a fair break and where everyone, rich or poor, feels they are entitled. The rich feel they are entitled to escape taxation; the poor feel they are entitled to escape the consequences of the business cycle. Give me a break. If there’s a price to pay, we all must share the cost. Having worked with extremely wealthy individuals for over thirty years, I feel "entitled" (pardon the pun) to speak.  It is not only poor folks who feel they are "owed" something. Unfortunately, our culture rewards creative entitlement thinking.

"I'm entitled!" Creative American at Work

Human economic behavior is not always rational. Neither, apparently, is human political behavior.  Voting for Mitt Romney is the most dangerous and irresponsible act imaginable. He has indicated he would not have voted for the so-called “Bail Out” and would not do so in the future if there were another near collapse of the economic system. A man with a hundred million dollars can weather a catastrophic economic collapse, perhaps even profit from it. The rest of us will not be so fortunate. Even the conservative economist Milton Friedman has acknowledged that the Great Depression could have been avoided if the Federal Reserve had not botched monetary policy by refusing to extend credit to failing banks. The “Bail Out” (first formulated by a Republican administration and passed as bi-partisan legislation) did successfully re-liquefy banking and it is also why we have a Great Recession rather than a Great Depression.

Personally, I have no problem with government intrusion into markets. I can't think of many professional investors who do. In a financial crisis, emotions need to cool. Markets need to breathe. Someone needs to flip the market "off switch". A drop of 5000 points in the DJIA (approximately 40%) is infinitely more destructive of capital than anything Obama ever dreamed of cooking up. Do the math.  A 40% drop in the US equity markets would erase over $6 trillion USD in capitalization.  A one day "flash crash" of 1000 points can erase over a trillion dollars. This actually happened on May 6, 2010. Yes, government interference is also a risk. It is called "policy risk". Anyone who naively believes that markets are truly free has never made a living using them. Markets are neither free nor fair. And thank God they're not. If they were, none of us could make a living. We would be unable to take advantage of inefficiencies and  inequalities. The idea of a "free market" is a myth. Whatever else you can say about Obama, he did one thing right. He continued Bush’s “Bail Out” and retained Ben Bernake as head of the Federal Reserve. He had no choice. If Mitt Romney thinks we can let banks go under and come out of it absent a Depression and a complete social melt down, he’s worse than naive: he's crazy. There are risks worth taking and risks that aren't.  If things come apart globally and the contagion spreads to the US, you do not want a Mitt Romney at the helm. The only people who will profit from the carcasses of dead banks and failed economies are vulture capitalists and astute private equity investors profiting from their recapitalization. And that is how it should be.

But how will I feed my family?

The problem with Mitt Romney is that he actually believes that he can reverse the business cycle with a little pixie dust. It is the economic equivalent of magical Mormon underwear. If either Obama or Romney were really serious about coming out of this slump they’d pull American troops out of Iraq and Afghanistan, stop foreign assistance to Pakistan and other Muslim countries, ditch Israel (wake up call--it's not just Muslim countries that persecute Christians), cut the corporate tax rate to zero (you want to see the market jump?), legalize (and tax the hell out of) marijuana and tax people with incomes of over a million dollars a year at a 50% marginal rate. If things worked out, great! If not, at least we could fire up the bong and forget about it all.  Of course, I am being facetious. But so is Mitt Romney if he thinks he has a magic bullet to goose this “Up in Smoke” economy.

Roll me another

Then there is the question of Mr. Romney’s religion. I realize this is a sacred cow. But should it be? Would we elect a Scientologist to the office of President? What does it say about a man whose religious beliefs include the bizarre account of a lost 13^th tribe of Israel traveling to the Americas in a submarine? What does it say about a man who believes that one day he will rule over his very own planet as a god? None of it makes sense. After all, who in their right mind would want to be president if they knew one day they'd be  God? Mormons have done a very good job of positioning themselves as mainstream religious believers. Don't buy it. Investigate what Mormons actually believe and ask yourself what the difference between a Scientologist and a Mormon is. The answer is “Not much.” 

 Come blow your horn.

 

Sadly, my fellow Republicans have become so confused and so gullible that they actually view Romney as a viable candidate. It is as if  they have decided the greater the problem, the more "out there" the solution has to be. Extremism in the pursuit of anything is still extremism. I find it especially distressing that Christians view him as a fellow traveler. I suppose that is true if you are planning an intergalactic trip or want your unbelieving dead grandma baptized. But I will leave the ridiculousness of his religious beliefs to Mr. Romney, Harry Reid, Orrin Hatch, and the angel Moroni (rhymes with “baloney”). John Stuart Mill once observed that you can only tolerate what you truly hate. So I will try to be especially tolerant of Mr. Romney’s “religious” beliefs.  In any case, the weirdness of the current American political scene neatly mirrors the weirdness of Mormonism.   You see, there were a bunch of Golden Plates with “the truth” written on them. Joseph Smith buried them and then, god-dawg, he lost the damn things. But praise God! He still remembered every word Moroni spoke.  But why should I pillory the Mormons for what they believe? The American public seems to have some equally weird beliefs. We actually think politicians (pick a party) can ring in a new era of economic prosperity. But as bizarre as Romney’s religious beliefs are, I think his views on the “Bail Out” are even weirder and more than enough to disqualify him from serious consideration as a Presidential candidate. I personally  cannot vote for anyone who voted against the "Bail Out" or who has pledged to block one should we face another financial panic. I am a conservative, but I am not a stupid conservative. At the end of the day, the goal is to have something left worth conserving,  There's not enough cash in the world (or the FDIC) to protect demand deposits if the financial system collapses and banks go under. I think Romney knows this too, but is so eager to get elected he is willing to posture for the outre crackpots of our party. At least, I hope that's what he's doing. When our political system makes us choose between a Romney and an Obama, I think it is time to reconsider the kind of political system we have. The idiots who think America will be better off with Romney are no less foolish than the idiots who voted for Obama in the first place. Let's face it. Whichever devil  you vote for---the devil you know or the devil you don’t---it’s still one hell of a choice.