Short Post on Winning the 2024 Election and Solving Cost of Living Crisis
Level 2 - Value Investor
Welcome Avatar! It’s an election year and crypto is becoming political. For fun we’re going to explain how to win the election since no one will listen to an “online cartoon bull”.
Before starting the above is a good meme for our thoughts on US politics. From what we’ve seen a Democrat vs. Republican has not changed the ability to succeed in the USA. As we’ve said time and time again: “If you can’t make it here, you can’t make it anywhere”
The debate topics are always the same: 1) debt, 2) inflation, 3) cost of living, 4) borders/immigration, 5) laws related to women and minorities, 6) health care, 7) environment/global warming stuff, 8) Taxes, 9) the economy/employment and 10) education.
No matter what happens its the same old topic points.
At this point, we only care about it within the context of markets. Since we’re heavy into crypto you can bet everything we’d support any party that is pro-crypto. In an ideal world, both become pro-crypto (and publicly so)
On a realistic/practical level we don’t think the President impacts your ability to succeed on any level. The USA is still the easiest place in the world to get rich.
How to Win - Cost of Living and Opportunity
If the goal is to win, you have to run on two things this year: 1) economic opportunities and 2) improving the cost of living crisis.
Historically, any time the economy is doing well the incumbent wins the election. In addition, it is rare/practically impossible to run when you’re in a recession.
This means the only way to have a fighting chance is to have a message with economic expansion and improving living standards. Currently, neither of these things are occurring post COVID printing press.
Economic Expansion
Crypto: Surprisingly, the crypto industry has gotten big enough to move the needle here. We really doubt that a lot of the new hype entering crypto would be here if it wasn’t a political issue.
With ~15% of Americans owning at least a little bit of crypto, both parties are realizing an anti-crypto stance is a death wish. A 3-5% swing is massive in an election and crypto is legitimately a swing issue at this point. The vast majority don’t care much about crypto but the ones that do will view anti-crypto policies as a direct attack on their opportunities.
Cost of Living Crisis
Haven’t seen a lot of compelling campaigns here. Generally speaking (if asked today) looks like Trump is going to win based on the pro-economy stance he has taken. By going positive on Crypto first the Dems are now scrambling to look neutral instead of negative (Thank Warren and Gensler!)
This is an open field in our opinion.
Prices are up 30-40% because the USA printed $10,000,000,000,000+ in a rough 12 month period.
How do you fix that?
None of the responses from either party have been any good. We’re referring to both Dems and Republicans.
If you raise income taxes, the rich are not impacted since they don’t really pay tax anyway (can’t get taxed if you don’t sell).
If you try and cut corporate taxes, asset prices go up since you’re increasing the net income by definition (even at the same P/E ratio the asset is going up significantly).
Instead, you likely need real policy change. A real policy change would be a consumption based tax that only impacts ultra wealthy people. We find it comical that a Honda Civic has the same tax rate as a Lambo or Ferrari. It is also comical that rental properties can be run at cash flow neutral due to “depreciation” on an asset that goes up in value of the long-term.
Example From Singapore
This is just a small example. Notice the phrase “tiers”.
Essentially, if you drive a Lambo you pay a higher tax rate than the guy driving a Honda. If you live in a Mega Mansion you pay a higher tax rate than the person who lives in a standard 1,200-2,000 sq/foot home.
Emphasis the tax rate is higher
Simple BTB Solution
If you wanted a guess, the easiest way to win elections now would be on Cost of Living. While crypto is our focus and all we care about (we don’t vote), the reality is that the middle/upper-middle class is getting smoked by cost of living.
Our solution is right here in this post: 1) stop trying to tax income, 2) stop trying to change corporate tax rates - that just benefits the mega companies who are already rich and 3) focus on a tax related to consumption/luxuries.
We’re not exactly sure where the line to draw is on every state but this is really the only way to solve the issues in an intelligent way. If rental properties don’t get massive deductions and have to pay higher tax rates then the housing inventory issue would be solved over night. Sure. Some people are willing to own rentals at cash flow neutral (not losing money) since they get the appreciation over time. How many would be willing to *lose* 3% a year? or 5% a year?
Anyone with a good background in sales/affiliate would tell you “the fear of loss and pain is a stronger sell than potential profits and pleasure.
Don’t Panic Nothing Will Happen
As a reminder, you’re reading a cartoon blog. Absolutely no one in the political sphere is going to read this and say “woah better take action”. So please don’t panic if you’d be negatively impacted by our consumption/rental/luxury goods tax.
This should be a pretty easy tell that politicians simply don’t care. All of them are complaining about the high cost of living and housing. Yet… zero solutions have been offered. They would rather have BlackRock cash bid on entire Zip Codes vs. increasing the tax rate on rental properties (or reducing the amount of outright scam deductions people can take).
Trump is running on “Roaring stock market and lower taxes for everyone” - this just benefits rich people since they own the stocks and own companies.
Biden is running on “higher taxes on income” - this also just benefits the rich since no one rich has a high income (Gates, Bezos, Zuck etc. all have pennies for salaries and get stock instead).
No one will offer a solution.
Therefore what should we do in the real world? Just vote for the politician who is pro-crypto and save yourself instead.
Conclusion
Right now it looks like Trump is going to win due to pro-crypto tilt and pro-economic expansion tilt. That said, the real problem in the USA (as a whole) is the cost of living crisis.
We’ve offered a pretty clear solution. Adjust the tax rates on luxury goods, mansions and rentals so you can increase housing inventory. This would force wealthy people to sell or eat 3-5% in losses every year (eating all of their potential upside from appreciation in an average neighborhood).
None of this is going to happen though. Since politicians don’t want to hurt their own portfolio of rental properties.
If you have a better solution let us know in the comments!
Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce.
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Elections are just a way to keep 50% of the peasants sedated for a few years. And then flip flop to the other 50%.
They main thing they are trying to avoid is pissing off 80-100% of the peasants.
That is when real problems start.
I don't think most people view the election through this lens. It's far too rational. Most people tend to vote on social issues because those are emotional points they can understand.
Women seem to vote based on pro-abortion. Minorities vote on who they think serves their race first and foremost. Gays vote for the pro-LGBT candidate. That's over half the country right there. This is why they malign conservatives as “racists, sexist, bigots” when it’s not true at all.
It only seems that straight white guys vote based on economy and what's best for the country as a whole.