Christmas Edition 2023

Christmas ,Wooden,Crib,With,Lights,Background

As we’ve done for many years around the Christmas Season, we are re-issuing the provocative message sent out by the folks at First Trust as well as offering Jeff’s personal thoughts on the concept of capitalism in our modern society.  It is very frightening to see capitalism cast in such an ugly light in our current era.  It’s not just unfortunate, it’s downright dangerous.  Nothing is perfect and there is room for improvement in the system.  But an outright attack on capitalism is misguided.

Please read and enjoy and know that we wish you peace in all ways throughout the Holiday Season and New Year!

Compassionate Capitalism

I am not a politically charged person.  I am not a conspiracy theorist.  And I don’t believe the end of the world – financially or literally – is lurking around the corner.  I am a realist that does his human best to be open minded and pragmatic, believing that the best way to help myself and my family is to help others. 

I believe in something I call “Compassionate Capitalism”. 

In a nutshell, I reject the notion that capitalism is inherently bad or evil.  I recognize, of course, that some capitalists are criminals and just bad people in general.  But I believe the fault lies with the person, not the concept of capitalism.  And I believe strongly that capitalism is the surest form of security and prosperity for a society. 

But at the end of the day, the fruits of capitalism are only sweet if accompanied by compassion.  There are many among us that are genuinely not fortunate enough to share a starting point in life that we could say is equal.  There are many among us that are stricken by diseases that don’t allow them to live and work as they once were able.  There are many among us that have made mistakes that require the grace of others to restore us to our better selves.  Well, that’s probably a lie…..I’d suspect we have all once needed the grace of others since we have surely all made mistakes. 

Such is life.  And it is wonderful! 

Working hard to advance your station in life and being compassionate toward others are not mutually exclusive, not in the least.  And this isn’t at all a political view.  I would have to think both sides of the aisle would nod in agreement at the notion that working hard for yourself and being compassionate toward others is a good thing.  In my mind, it’s a vital piece of the fabric of society.

Government has a place in all of this.  I don’t know any honest and successful capitalist who believes government should be shut down.  Instead, it should be right-sized.  Guardrails are wonderful things in the business world, but unscalable walls are something different.  Believe me, I love regulations in the financial services industry.  I love them throughout the business world.  We all need the accountability and oversight that keep the bad apples (the uncompassionate capitalists, or those simply with no moral compass) from running to the Wild West and endangering society.  But there is an all-important happy medium.  Like so many things, ‘government’ isn’t bad; but too much of it is. 

With this in mind, I forward the following piece sent to me by the economics team at First Trust, a group I’ve cited a few times before.   I have always found it an enjoyable read and hope you will as well.

Greedy Innkeeper or Generous Capitalist? 
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist

The Bible story of the virgin birth is at the center of much of the holiday cheer this time of year. The book of Luke tells us that Mary and Joseph traveled to Bethlehem because Caesar Augustus decreed a census should be taken. Mary gave birth after arriving in Bethlehem and placed baby Jesus in a manger because there was “no room for them in the inn.”

Some people believe Mary and Joseph were mistreated by a greedy innkeeper, who only cared about profits and decided the couple was not “worth” his normal accommodations. This version of the story (narrative) has been repeated many times in plays, skits, and sermons. It fits an anti-capitalist mentality that paints business owners as greedy, or even evil.

It persists even though the Bible records no complaints and there was apparently no charge for the stable. It may be the stable was the only place available. Bethlehem was over-crowded with people forced to return to their ancestral home for a census – ordered by the Romans – for the purpose of levying taxes. If there was a problem, it was due to unintended consequences of government policy. In this narrative, the government caused the problem.

The innkeeper was generous to a fault – a hero even. He was over-booked, but he charitably offered his stable, a facility he built with unknowing foresight. The innkeeper was willing and able to offer this facility even as government officials, who ordered and administered the census, slept in their own beds with little care for the well-being of those who had to travel regardless of their difficult life circumstances.

If you must find “evil” in either of these narratives, remember that evil is ultimately perpetrated by individuals, not the institutions in which they operate. And this is why it’s important to favor economic and political systems that limit the use and abuse of power over others. In the story of baby Jesus, a government law that requires innkeepers to always have extra rooms, or to take in anyone who asks, would “fix” the problem.

But these laws would also have unintended consequences. Fewer investors would back hotels because the cost of the regulations would reduce returns on investment. A hotel big enough to handle the rare census would be way too big in normal times. Even a bed and breakfast would face the potential of being sued. There would be fewer hotel rooms, prices would rise, and innkeepers would once again be called greedy. And if history is our guide, government would chastise them for price-gouging and then try to regulate prices.

This does not mean free markets are perfect or create utopia; they aren’t and they don’t. But businesses can’t force you to buy a service or product. You have a choice – even if it’s not exactly what you want. And good business people try to make you happy in creative and industrious ways.

Government doesn’t always care. In fact, if you happen to live in North Korea or Cuba, and are not happy about the way things are going, you can’t leave. And just in case you try, armed guards will help you think things through.

This is why the Framers of the US Constitution made sure there were “checks and balances” in our system of government. These checks and balances don’t always lead to good outcomes; we can think of many times when some wanted to ignore these safeguards. But, over time, the checks and balances help prevent the kinds of despotism we’ve seen develop elsewhere.

Neither free market capitalism, nor the checks and balances of the Constitution are the equivalent of having a true Savior. But they should give us all hope that the future will be brighter than many seem to think.

The Takeaways:

  • To whatever extent you can positively influence a young person; please teach them the benefits of true capitalism.  Please try to show them that compassionate capitalism is a real and worthwhile concept.  It is what has brought America to prosperity in previous generations, and it is what will bring the promise of a bright and loving future for their children.
  • We here at Winn Partners Financial Group want to wish you and your families all the best for the Holiday Season.  May we all rejoice in the ability to celebrate our faith freely under the enormous blanket of love and grace of God.

Disclosure

All e-mail sent to or from this address will be received or otherwise recorded by the International Assets Advisory, LLC corporate e-mail system and is subject to archival, monitoring or review by, and/or disclosure to, someone other than the recipient. This information is obtained from sources believed to be reliable; however, its accuracy or completeness is not guaranteed. Investing in securities underlying in currencies other than the U.S. dollar involves certain considerations comprising both risk and opportunity not typically associated with investing in U.S. securities.  The security may be affected either favorably or unfavorably by fluctuation in the relative rates of exchange between currencies, by exchange control regulations, or by indigenous economic and political developments.  As with any investment, there is no guarantee against potential loss.  Past performance is not an indication of future performance. International Assets Advisory, LLC and its affiliates, employees and/or directors may have positions in these securities, and may as principal or agent, buy from or sell to customers. All securities are subject to price and yield change and subject to availability. Mutual funds, Unit Investment Trusts and Variable Annuities are sold by prospectus only.  Please read the prospectus carefully for important information about fees and risk considerations.

Securities offered through International Assets Advisory LLC Member FINRA/SIPC. The information provided is based on carefully selected sources, believed to be reliable, but whose accuracy or completeness cannot be guaranteed. Any opinion herein reflects our judgment at this date and is subject to change without notice. This should not be construed as an offer or solicitation to buy or sell securities.  Investors should consider the investment objective, risks, and charges and expenses before investing in an investment company product.  Stocks, options, and mutual funds are subject to market volatility and the chance that they may lose value.  Bonds are subject to changes in interest rates, risks of defaults by issuer, and the loss of purchasing power due to inflation, or the risk that an issuer will be unable to make interest or principal payments.  Additionally, bonds and short-term investments entail greater inflation risk than stocks. Any fixed-income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.

 Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be either suitable or profitable for a client or prospective client’s wealth management investment portfolio.

This information is not intended to be legal or tax advice. Please consult a tax, legal, or financial professional with questions.

Investing in securities underlying in currencies other than the U.S. dollar involves certain considerations comprising both risk and opportunity not typically associated with investing in U.S. securities.  The security may be affected either favorably or unfavorably by fluctuation in the relative rates of exchange between currencies, by exchange control regulations, or by indigenous economic and political developments. As with any investment, there is no guarantee against potential loss.  Investments in securities and insurance products are:

NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE

Category: News, Worth Considering No Comments

Comments are closed.