If you call 911 in a large American city, there is no guarantee that anyone is going to answer and promptly send out police to help you. So, gun sales have soared. Some people who have never before owned a weapon or who have even opposed the use of firearms are now experiencing a new kind of fear that has prompted them to do something very new and different.
That’s basically what’s happening to our whole economy; tens of millions of Americans are crying out—dialing 911—pleading for someone to come to the rescue, and nobody's answering. This K-shaped recovery is not working for the majority of Americans.
I don’t think our nation can endure a situation where life at The California Club and The Porcellian carry on as though nothing has changed and asset price inflation becomes a substitute for wage growth. There is only so far that the top arm of a K can continue higher before something revolutionary sweeps up everyone on the bottom arm. Over the last couple of days, I have read literally dozens of financial and political blogs that all compare our current circumstances to those that led to the French Revolution.
Where the arm of this K might be four years from now is what really interests investors. By then, the baby boomer generation will be gone from public office, and whatever movement comes next is likely to be angrier and significantly less tolerant of the status quo. However, civilization cannot continue without common sense in government.
Our new Congressional celebrity squad of Alexandria Ocasio-Cortez (D-NY), Ilhan Omar(D-MN), Ayanna Pressley (D-MA), and Rashida Tlaib (D-MI) have all claimed to be socialists. It’s likely that their rock star status contributed to the results of a 2019 Gallup Poll that suggested that about half of American youths now view socialism as positively as capitalism, and in another poll, seven of ten millennials surveyed said they would like to vote for a socialist.
I don’t know how this will change how we manage investment portfolios. I’d say probably not much. I don't agree with all the doom-and-gloom pundits and their comparisons to the French Revolution, but I'm certainly on board with letting history be our guide. …And throughout the vast majority of history, as is the case with many recent gun-buyers, we find that self-protection usually outweighs abstract ideology and that today’s revolutionary will indeed be tomorrow’s sellout. Same as it ever was.
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