This guy got destroyed by the system

My friend Richard got destroyed by the system.

As a financial advisor in Sacramento, California, he spent years building a thriving firm and has even landed a few celebrity clients.

Richard did well for himself. Successful. Married. Wonderful kids. Financially secure.

But back in 2008 things started to turn sour.

His wife left him and took the kids, along with half of everything else.

The divorce forced the liquidation of many of their assets, including a substantial investment portfolio he had built up.

Richard didn’t want to sell; by the time the divorce was being fought, it was 2009 and the stock market had crashed.

But Richard had no choice. They liquidated and suffered major losses.

Most painfully, since Richard’s business was so successful, the judge ordered him to pay alimony of nearly $20,000 per month.

It didn’t matter that, practically overnight, most of his new business had dried up due to the Great Recession.

Thus began the long indentured servitude known as alimony.

The idea behind alimony is to make sure that the ex-spouse can maintain a comfortable standard of living while s/he gets rebuilds a life and financial base.

It shouldn’t be abused as a lottery ticket.

In Richard’s case, it’s been 7+ long years and nearly $2 million in alimony paid. But the payments never stop.

Even though the kids are now grown and out of the house, his ex-wife has zero incentive to go out and find a job to support herself.

Why would she bother working hard when she can do nothing and collect $20k from her ex-husband?

Yet due to the length of time they were married, and California’s ridiculous legal code, there’s no end in sight for Richard’s alimony payments.

So Richard has the government taking 50% (between federal and state income tax) from his left pocket, and his wife taking nearly a quarter of a million dollars per year out of his right pocket.

Naturally if he stops paying either one of them he’ll face the long arm of the law.

Speaking of the law, the Dodd-Frank Act that was passed several years ago to reform the financial system totally crippled his business.

It’s one of the costliest and most painful regulations ever created for financial services businesses, and Richard constantly has regulators breathing down his neck.

It’s amazing. Despite taking half of his income, the government makes it increasingly difficult for Richard to produce.

Richard turned 50 this year, and he was miserable.

Instead of slowing down and enjoying life, he’d been working harder than ever to earn less than ever, with very little time left over to build a personal life for himself.

His problems also started to manifest in other ways. He’d gained weight, and was drinking more, and I doubt he’d gone on a date since 2013.

Sadly, Richard is not an isolated case. There are countless people across the country who have been destroyed by the system.

He came to me for help earlier this year, which I was more than happy to extend.

Initially we established a new financial advisory business for Richard in a more favorable jurisdiction.

That jurisdiction was Puerto Rico.

Under Puerto Rico’s generous incentive laws, Richard’s new firm is able to provide financial services for worldwide clients without the pain of onshore US regulations.

It’s made things much easier for him so that he can focus on servicing his clients’ needs and winning new business, as opposed to filling out forms and pleasuring regulators.

The new firm is growing rapidly as a result. And best of all, his Puerto Rico profits are taxed at just 4%, instead of the 50% he was paying in California.

Richard still has the California business. And to reduce the taxes there, my advisors set him up with something called a “Captive Insurance Company”.

This one is a real goldmine.

It’s completely normal for businesses to have certain insurance expenses, for example fire insurance, earthquake coverage, liability, etc.

These are all legitimate, tax-deductible business expenses.

A “Captive Insurance Company” is a separate business that you might own or control, which basically acts as your own insurance company.

So instead of paying insurance premiums to State Farm or All State, you’re paying premiums to your own insurance company.

This is completely and totally legal, and there’s an entire section on this in the US Tax Code.

Like any insurance premium, the premiums you pay to your own insurance company are tax deductible to your original business.

So Richard’s California-based financial advisory firm is able to deduct the insurance premiums that it pays to Richard’s captive insurance company.

Under US law, captive insurance companies qualify for tax-free status as long as their net premiums are below $2.2 million per year.

Richard’s California-based financial advisory firm is now paying his captive insurance company for several new, completely legitimate insurance policies.

For example, his captive company insures his financial advisory firm against risks like cybersecurity and civil unrest.

It makes sense for any business to insure against these risks.

The California company’s profit is now lower, which means that it pays less tax.

Meanwhile, the insurance premiums paid to his captive insurance company are subject to ZERO tax.

So he’s paying less federal and state tax from the California business, 4% tax in Puerto Rico, and 0% tax on his insurance company’s profits.

These are just two of the steps that we’ve taken. But the end result is pretty clear.

Richard is less-regulated, so he’s able to focus more on building and growing his business.

He’s earning more, and he’s able to keep more of what he earns.

Most of all he’s happier. He’s laid off on the booze, started hitting the gym, traveling more, and actually having a personal life.

It’s been a huge transformation.

All that it took to completely turn his life around were the proper tools to solve his problems, the knowledge about how to use them, and willingness to execute.

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This guy got destroyed by the system

My friend Richard got destroyed by the system.

As a financial advisor in Sacramento, California, he spent years building a thriving firm and has even landed a few celebrity clients.

Richard did well for himself. Successful. Married. Wonderful kids. Financially secure.

But back in 2008 things started to turn sour.

His wife left him and took the kids, along with half of everything else.

The divorce forced the liquidation of many of their assets, including a substantial investment portfolio he had built up.

Richard didn’t want to sell; by the time the divorce was being fought, it was 2009 and the stock market had crashed.

But Richard had no choice. They liquidated and suffered major losses.

Most painfully, since Richard’s business was so successful, the judge ordered him to pay alimony of nearly $20,000 per month.

It didn’t matter that, practically overnight, most of his new business had dried up due to the Great Recession.

Thus began the long indentured servitude known as alimony.

The idea behind alimony is to make sure that the ex-spouse can maintain a comfortable standard of living while s/he gets rebuilds a life and financial base.

It shouldn’t be abused as a lottery ticket.

In Richard’s case, it’s been 7+ long years and nearly $2 million in alimony paid. But the payments never stop.

Even though the kids are now grown and out of the house, his ex-wife has zero incentive to go out and find a job to support herself.

Why would she bother working hard when she can do nothing and collect $20k from her ex-husband?

Yet due to the length of time they were married, and California’s ridiculous legal code, there’s no end in sight for Richard’s alimony payments.

So Richard has the government taking 50% (between federal and state income tax) from his left pocket, and his wife taking nearly a quarter of a million dollars per year out of his right pocket.

Naturally if he stops paying either one of them he’ll face the long arm of the law.

Speaking of the law, the Dodd-Frank Act that was passed several years ago to reform the financial system totally crippled his business.

It’s one of the costliest and most painful regulations ever created for financial services businesses, and Richard constantly has regulators breathing down his neck.

It’s amazing. Despite taking half of his income, the government makes it increasingly difficult for Richard to produce.

Richard turned 50 this year, and he was miserable.

Instead of slowing down and enjoying life, he’d been working harder than ever to earn less than ever, with very little time left over to build a personal life for himself.

His problems also started to manifest in other ways. He’d gained weight, and was drinking more, and I doubt he’d gone on a date since 2013.

Sadly, Richard is not an isolated case. There are countless people across the country who have been destroyed by the system.

He came to me for help earlier this year, which I was more than happy to extend.

Initially we established a new financial advisory business for Richard in a more favorable jurisdiction.

That jurisdiction was Puerto Rico.

Under Puerto Rico’s generous incentive laws, Richard’s new firm is able to provide financial services for worldwide clients without the pain of onshore US regulations.

It’s made things much easier for him so that he can focus on servicing his clients’ needs and winning new business, as opposed to filling out forms and pleasuring regulators.

The new firm is growing rapidly as a result. And best of all, his Puerto Rico profits are taxed at just 4%, instead of the 50% he was paying in California.

Richard still has the California business. And to reduce the taxes there, my advisors set him up with something called a “Captive Insurance Company”.

This one is a real goldmine.

It’s completely normal for businesses to have certain insurance expenses, for example fire insurance, earthquake coverage, liability, etc.

These are all legitimate, tax-deductible business expenses.

A “Captive Insurance Company” is a separate business that you might own or control, which basically acts as your own insurance company.

So instead of paying insurance premiums to State Farm or All State, you’re paying premiums to your own insurance company.

This is completely and totally legal, and there’s an entire section on this in the US Tax Code.

Like any insurance premium, the premiums you pay to your own insurance company are tax deductible to your original business.

So Richard’s California-based financial advisory firm is able to deduct the insurance premiums that it pays to Richard’s captive insurance company.

Under US law, captive insurance companies qualify for tax-free status as long as their net premiums are below $2.2 million per year.

Richard’s California-based financial advisory firm is now paying his captive insurance company for several new, completely legitimate insurance policies.

For example, his captive company insures his financial advisory firm against risks like cybersecurity and civil unrest.

It makes sense for any business to insure against these risks.

The California company’s profit is now lower, which means that it pays less tax.

Meanwhile, the insurance premiums paid to his captive insurance company are subject to ZERO tax.

So he’s paying less federal and state tax from the California business, 4% tax in Puerto Rico, and 0% tax on his insurance company’s profits.

These are just two of the steps that we’ve taken. But the end result is pretty clear.

Richard is less-regulated, so he’s able to focus more on building and growing his business.

He’s earning more, and he’s able to keep more of what he earns.

Most of all he’s happier. He’s laid off on the booze, started hitting the gym, traveling more, and actually having a personal life.

It’s been a huge transformation.

All that it took to completely turn his life around were the proper tools to solve his problems, the knowledge about how to use them, and willingness to execute.

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via IFTTT

6 Secretary of State Appointments Trump Could Make That Wouldn’t Suck

A number of names have been bandied around as potential Secretary of State nominees for Donald Trump: John Bolton, Newt Gingrich, Rudy Giuliani, even Mitt Romney. None of these selections would be especially surprising but neither do they represent any kind of break from “the establishment” against which many Trump voters voted.

Finding a person who doesn’t accept status-quo assumptions about foreign policy and America’s supposedly indispensable place in the world—or even one who is just willing to take a fresh look at U.S. relations with the rest of the globe—isn’t easy. Decades of bipartisan foreign policy have produced generally pro-intervention analysts, activists, and politicians.

Some Ron Paul supporters who see a spark of noninterventionism in Trump have launched a petition for Trump to nominate the former Republican congressman as secretary of state. A Change.org petition notes the Washington Post‘s Jennifer Rubin was concerned about such a possibility while Paul called it an “unlikely scenario.” At the age of 83, it’s difficult to see Paul as a cabinet member under any circumstances. That said, Paul definitely agrees with Trump’s election-night refrain about wanting the United States to have friendly relations with any country willing to have friendly relations with the U.S. And considering one underlying principle of a Paul State Department would be not inserting the U.S. into every imaginable conflict (diplomatic or otherwise) around the world, Secretary Paul not traveling overseas all the time would be a benefit.

Paul would make an intriguing, establishment-challenging and, most importantly, non-interventionist choice for secretary of state. He would be a great selection. There is also zero chance of that happening. Here are other selections Trump could make that would be pretty good:

Bob Corker

Sen. Rand Paul (R-Ky.) has emerged as a potent Republican critic of the Trump transition. Last week he said he could find enough votes to block a Bolton nomination, and also criticized the idea that Giuliani might be nominated. “Giuliani is a great friend of the president-elect,” Paul acknowledged. “Maybe there could be another position in the cabinet that wouldn’t be putting him in a place where he is at odds with the president’s vision on foreign policy.”

The Republican majority in the Senate has been whittled down from 54 to 51 or 52 (a December 10 run-off will determine whether Louisiana sends a Democrat or Republican to the Senate to replace David Vitter), so Paul does not need to find all that many votes to block any Trump nomination, especially if it’s one that finds little or no support among Democrats.

Paul suggested Sen. Bob Corker (R-Tenn.) as a potential secretary of state nomination for Trump, saying he would “sail through” with more than a dozen Democrats also supporting him. “I would say, while not being libertarian, [Corker] is more of a reasonable, realist kind of person,” Paul told Reason last week. “I think he would be less likely to say tomorrow we need to drop bombs on Iran.”

For Paul, any potential secretary of state nominee that “didn’t learn the lesson of the war in Iraq” would not earn his support. Corker has compared the U.S. invasion of Iraq to beating a hornet’s nest with a big stick. He was also one of three Republican senators in the Foreign Relations Committee to vote in favor of the U.S.-Russia strategic arms reduction treaty (START) and one of 13 Republicans who voted in favor of it on the Senate floor. Corker was also skeptical of the 2009 Afghan troop surge. “I have no idea what it is, other than sending additional troops,” Corker told AFP. “I hope we dig a lot deeper.”

Corker has said he was “in the mix” for a possible Trump administration role.

James Webb

Former Sen. James Webb (D-Va.) briefly ran for the Democratic nomination for president in the 2016 election cycle, dropping out less than four months after announcing his run. “Some people say I am a Republican who became a Democrat, or that I often sound like a Republican in a room full of Democrats or a Democrat in a room full of Republicans,” Webb said at the time. “I fully accept that my views on many issues are not compatible with the power structure and the nominating base of the Democratic Party.”

In retrospect, Webb, who appealed to the kind of swing voter in the Rust Belt that tipped the election to Donald Trump, may have been the strongest announced candidate Democrats had. On foreign policy, too, Webb provided an alternative that was less hawkish than Clinton, whose enthusiasm for war and intervention surely turned off some voters in the Midwest and beyond.

Webb, as Jim Henley noted in the November 2008 issue of Reason, was one of the “forthright anti-war candidates” Democrats finally decided to run in 2006 to take “real advantage of public dismay with the war.” But Democrats, as Henley noted, were never fully comfortable with such positions, even when they exploited them. The success of 2006, Henley noted, “came in the face of the usual intraparty counsel to avoid losing ‘credibility on national security’.”

Webb’s failure to launch in the presidential election was in part a symptom of the broader death of authentically anti-war candidates over the past several decades, even in the face of continued military failures in the 21st century. Webb has been a proponent of Congress reasserting its role in decisions about making war and was a critic of the U.S. war in Iraq and the 2011 intervention in Libya.

John Duncan

Rep. John Duncan (R-Tenn.) has served in Congress since 1988. While he voted in favor of the Gulf War resolution in 1991, he subsequently voted against the Iraq War in 2002, against bills to fund the war in Iraq, and in favor of setting a withdrawal date in 2007. He also voted against a bill to fund the Afghanistan war in 2010. Duncan was one of 10 members of Congress to try to sue President Obama over the intervention in Libya, for which the president received no Congressional authorization. Howard Phillips, the founder of what would become the Constitution party, called Duncan “one of the unsung heroes of Constitutional conservatism.”

He was one of only six Republican members of Congress to vote against the 2002 authorization of the use of military force in Iraq. At the time, he said he thought the vote could end his political career, as everyone in his very conservative Republican district was telling him to vote in favor of the Iraq war.

He had learned his lesson from his support of the First Gulf War, saying he realized in the aftermath of the war that the threat had been “greatly exaggerated.” Duncan also noted the role of partisan politics in manufacturing support for poor U.S. foreign policy. “Eighty percent of the House Republicans voted against the bombings in Bosnia, Kosovo, and all that,” he told the American Conservative in 2005. “I’m absolutely convinced that if Gore or Clinton had been in the White House, 80 percent of the Republicans would have been against [the Iraq War too].” Such an understanding of the blinding nature of partisanship when it comes to U.S. foreign policy would be a huge asset in a Trump cabinet.

T.J. Rodgers

Trump and his transition team would be remiss if they only considered politicians for roles in the cabinet. Even the State Department could benefit from being guided by someone with extensive experience in the private sector. T.J. Rodgers, the founder of Cypress Semiconductor (and a supporter of Reason Foundation, the nonprofit that publishes this website), is one such candidate.

Throughout his career, Rodgers has been an unabashed defender of free-market capitalism. Given how much the freeing of markets have improved living standards and the quality of lives around the world and how only free markets can actually sustain sustainable development, the world and the United States would benefit from a secretary of state who was an unabashed advocate of real capitalism. Such advocates are not as common, or outspoken, in an American business world increasingly intermingling with government, but Rodgers has repeatedly warned against cronyism here and abroad. Appointing someone who understands this as secretary of state could go along way in restoring justified optimism among Americans and around the world.

Tulsi Gabbard

Yesterday Rep. Tulsi Gabbard (D-Hawaii) met with President-elect Trump, and is reportedly being considered for an appointment at State, Defense, or the United Nations. Gabbard, a combat veteran who volunteered for a 12-month tour of duty in Iraq while serving in the Hawaii Army National Guard, would make an excellent choice for secretary of state, one that would send a clear and unequivocal message about Trump’s interest in breaking from the deadly bipartisan foreign policy status quo.

After her meeting with Trump, she said she “felt it important to take the opportunity to meet with the president-elect now before the drumbeats of war that neocons have been beating drag us into an escalation of the war to overthrow the Syrian government—a war which has already cost hundreds of thousands of lives and forced millions of refugees to flee their homes in search of safety for themselves and their families.”

Gabbard has been an opponent of U.S. intervention in Syria since coming to Congress in 2013, arguing that “intervention in Syria goes against America’s national security, international credibility, economic interest, and moral center.”

While she served in Iraq, she has said she was against the war, and has also called for an end to the Afghanistan war “as soon as possible,” saying the U.S. should never have been in those places to begin with. She is also among a growing faction of members of Congress known as “Saudi skeptics,” voting against U.S. arms sales to Saudi Arabia, and co-sponsored the House version of Rand Paul’s legislation to stop arms sales to Saudi Arabia. In 2014, she backed Michigan Republican Rep. Justin Amash’s amendment to defund the National Security Agency over its warrantless surveillance program.

Gabbard stepped down as vice chair of the Democratic National Committee in February so that she could endorse Bernie Sanders in the Democratic presidential primaries, after complaining that the DNC had not scheduled enough primary debates.

Wesley Clark

The former Democratic candidate for president earned credibility among non-interventionists for his opposition to the war in Iraq, but it wasn’t enough to help him win the Democratic nomination in 2004. Clark has been skeptical about turning to military force first in U.S. foreign policy but also accepts that the U.S. is and ought to remain in a position of global leadership.

“You cannot win the war on terror by military force,” Clark told Democracy Now‘s Amy Goodman in 2007. “It is first and foremost a battle of ideas. It is secondly a law enforcement effort and a cooperative effort among nations. And only as a last resort do you use military force.”

“The truth about the Middle East is, had there been no oil there, it would be like Africa. Nobody is threatening to intervene in Africa,” Clark noted to Goodman. “The problem is the opposite. We keep asking for people to intervene and stop it. There’s no question that the presence of petroleum throughout the region has sparked great power involvement.”

In his 2014 book Don’t Wait for the Next War: A Strategy for American Growth and Global Leadership, Clark lays out what Walter Russell Mead called in the Wall Street Journal a Hamiltonian vision for U.S. foreign policy, where “a strong federal government closely linked to powerful firms in the private sector will promote economic development at home and ensure national security abroad.” In this approach, the U.S. would keep its ability to project power globally but try to avoid conflict when possible.

The problem there is that the ability to project the power sometimes becomes enough to drive policymakers into conflicts. The intervention in Libya, which Clark criticized, could be seen through this framework. Many of the immediate costs of intervening were already baked in to the daily cost of maintaining the U.S. military and its ability to project power.

In a 2011 op-ed in the Washington Post, Clark warned that the American intervention that was then starting in Libya did not meet standards that ought to be met for U.S. interventions. Those include a clear national interest at stake, where the result would be deemed worth the cost of intervention; knowing the purpose of the intervention and how military action would achieve it; determining the political end game before the intervention begins; building public support, obtaining diplomatic and legal authority, and bringing allies into the process; avoiding U.S. and civilian casualties; and getting it over with quickly. Clark is an advocate of continued U.S. intervention in Syria, although it would not appear to meet all of the standards he laid out. Last year, he wrote that the idea of the U.S. and its allies creating “safe zones” for refugees “offers the best, lowest cost and the surest means of regaining some stability in the region.”

Clark is no non-interventionist, but he is certainly a skeptic of intervention and an advocate for caution, which would make him a useful, if unavoidably flawed, member of a Trump cabinet.

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Why Trump Should Offer Tulsi Gabbard a Senior Role in His Administration

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Anyone who’s been reading me for more than a couple of days understands that I have serious reservations about Donald Trump. My concerns stem primarily from his authoritarian tendencies, as well as his stated disregard for civil liberties. Nevertheless, as I outlined in my post-election piece, Americans Roll the Dice With President Donald Trump, I very much want Trump to succeed, because this country needs him to succeed. Tens of millions of our fellow citizens are suffering under the weight of undue financial burdens, largely the result of an economy completely controlled by unethical and ruthless oligarchs thanks to their bought and paid for political stooges. This unholy union needs to be shattered before this country can be “made great again.”

Will Trump actually do what needs to be done? I have my doubts, but doubt isn’t going to lead to positive change. In these early months before Trump picks all of his personnel, it is imperative that we signal to him what would be acceptable behavior, and what would be considered unforgivable betrayal.

As such, from the very beginning I have advocated that Trump work closely with those forces in the opposition who actually want to make economic existence once again bearable for countless struggling Americans. Trump should ignore corporatist frauds irrespective of their political leanings (red/blue sports team colors), and unite the public along productive populist policy lines as opposed to blind, counterproductive partisan loyalties.

continue reading

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This guy got destroyed by the system

My friend Richard got destroyed by the system.

As a financial advisor in Sacramento, California, he spent years building a thriving firm and has even landed a few celebrity clients.

Richard did well for himself. Successful. Married. Wonderful kids. Financially secure.

But back in 2008 things started to turn sour.

His wife left him and took the kids, along with half of everything else.

The divorce forced the liquidation of many of their assets, including a substantial investment portfolio he had built up.

Richard didn’t want to sell; by the time the divorce was being fought, it was 2009 and the stock market had crashed.

But Richard had no choice. They liquidated and suffered major losses.

Most painfully, since Richard’s business was so successful, the judge ordered him to pay alimony of nearly $20,000 per month.

It didn’t matter that, practically overnight, most of his new business had dried up due to the Great Recession.

Thus began the long indentured servitude known as alimony.

The idea behind alimony is to make sure that the ex-spouse can maintain a comfortable standard of living while s/he gets rebuilds a life and financial base.

It shouldn’t be abused as a lottery ticket.

In Richard’s case, it’s been 7+ long years and nearly $2 million in alimony paid. But the payments never stop.

Even though the kids are now grown and out of the house, his ex-wife has zero incentive to go out and find a job to support herself.

Why would she bother working hard when she can do nothing and collect $20k from her ex-husband?

Yet due to the length of time they were married, and California’s ridiculous legal code, there’s no end in sight for Richard’s alimony payments.

So Richard has the government taking 50% (between federal and state income tax) from his left pocket, and his wife taking nearly a quarter of a million dollars per year out of his right pocket.

Naturally if he stops paying either one of them he’ll face the long arm of the law.

Speaking of the law, the Dodd-Frank Act that was passed several years ago to reform the financial system totally crippled his business.

It’s one of the costliest and most painful regulations ever created for financial services businesses, and Richard constantly has regulators breathing down his neck.

It’s amazing. Despite taking half of his income, the government makes it increasingly difficult for Richard to produce.

Richard turned 50 this year, and he was miserable.

Instead of slowing down and enjoying life, he’d been working harder than ever to earn less than ever, with very little time left over to build a personal life for himself.

His problems also started to manifest in other ways. He’d gained weight, and was drinking more, and I doubt he’d gone on a date since 2013.

Sadly, Richard is not an isolated case. There are countless people across the country who have been destroyed by the system.

He came to me for help earlier this year, which I was more than happy to extend.

Initially we established a new financial advisory business for Richard in a more favorable jurisdiction.

That jurisdiction was Puerto Rico.

Under Puerto Rico’s generous incentive laws, Richard’s new firm is able to provide financial services for worldwide clients without the pain of onshore US regulations.

It’s made things much easier for him so that he can focus on servicing his clients’ needs and winning new business, as opposed to filling out forms and pleasuring regulators.

The new firm is growing rapidly as a result. And best of all, his Puerto Rico profits are taxed at just 4%, instead of the 50% he was paying in California.

Richard still has the California business. And to reduce the taxes there, my advisors set him up with something called a “Captive Insurance Company”.

This one is a real goldmine.

It’s completely normal for businesses to have certain insurance expenses, for example fire insurance, earthquake coverage, liability, etc.

These are all legitimate, tax-deductible business expenses.

A “Captive Insurance Company” is a separate business that you might own or control, which basically acts as your own insurance company.

So instead of paying insurance premiums to State Farm or All State, you’re paying premiums to your own insurance company.

This is completely and totally legal, and there’s an entire section on this in the US Tax Code.

Like any insurance premium, the premiums you pay to your own insurance company are tax deductible to your original business.

So Richard’s California-based financial advisory firm is able to deduct the insurance premiums that it pays to Richard’s captive insurance company.

Under US law, captive insurance companies qualify for tax-free status as long as their net premiums are below $2.2 million per year.

Richard’s California-based financial advisory firm is now paying his captive insurance company for several new, completely legitimate insurance policies.

For example, his captive company insures his financial advisory firm against risks like cybersecurity and civil unrest.

It makes sense for any business to insure against these risks.

The California company’s profit is now lower, which means that it pays less tax.

Meanwhile, the insurance premiums paid to his captive insurance company are subject to ZERO tax.

So he’s paying less federal and state tax from the California business, 4% tax in Puerto Rico, and 0% tax on his insurance company’s profits.

These are just two of the steps that we’ve taken. But the end result is pretty clear.

Richard is less-regulated, so he’s able to focus more on building and growing his business.

He’s earning more, and he’s able to keep more of what he earns.

Most of all he’s happier. He’s laid off on the booze, started hitting the gym, traveling more, and actually having a personal life.

It’s been a huge transformation.

All that it took to completely turn his life around were the proper tools to solve his problems, the knowledge about how to use them, and willingness to execute.

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via IFTTT

6 Secretary of State Appointments Trump Could Make That Wouldn’t Suck

A number of names have been bandied around as potential Secretary of State nominees for Donald Trump: John Bolton, Newt Gingrich, Rudy Giuliani, even Mitt Romney. None of these selections would be especially surprising but neither do they represent any kind of break from “the establishment” against which many Trump voters voted.

Finding a person who doesn’t accept status-quo assumptions about foreign policy and America’s supposedly indispensable place in the world—or even one who is just willing to take a fresh look at U.S. relations with the rest of the globe—isn’t easy. Decades of bipartisan foreign policy have produced generally pro-intervention analysts, activists, and politicians.

Some Ron Paul supporters who see a spark of noninterventionism in Trump have launched a petition for Trump to nominate the former Republican congressman as secretary of state. A Change.org petition notes the Washington Post‘s Jennifer Rubin was concerned about such a possibility while Paul called it an “unlikely scenario.” At the age of 83, it’s difficult to see Paul as a cabinet member under any circumstances. That said, Paul definitely agrees with Trump’s election-night refrain about wanting the United States to have friendly relations with any country willing to have friendly relations with the U.S. And considering one underlying principle of a Paul State Department would be not inserting the U.S. into every imaginable conflict (diplomatic or otherwise) around the world, Secretary Paul not traveling overseas all the time would be a benefit.

Paul would make an intriguing, establishment-challenging and, most importantly, non-interventionist choice for secretary of state. He would be a great selection. There is also zero chance of that happening. Here are other selections Trump could make that would be pretty good:

Bob Corker

Sen. Rand Paul (R-Ky.) has emerged as a potent Republican critic of the Trump transition. Last week he said he could find enough votes to block a Bolton nomination, and also criticized the idea that Giuliani might be nominated. “Giuliani is a great friend of the president-elect,” Paul acknowledged. “Maybe there could be another position in the cabinet that wouldn’t be putting him in a place where he is at odds with the president’s vision on foreign policy.”

The Republican majority in the Senate has been whittled down from 54 to 51 or 52 (a December 10 run-off will determine whether Louisiana sends a Democrat or Republican to the Senate to replace David Vitter), so Paul does not need to find all that many votes to block any Trump nomination, especially if it’s one that finds little or no support among Democrats.

Paul suggested Sen. Bob Corker (R-Tenn.) as a potential secretary of state nomination for Trump, saying he would “sail through” with more than a dozen Democrats also supporting him. “I would say, while not being libertarian, [Corker] is more of a reasonable, realist kind of person,” Paul told Reason last week. “I think he would be less likely to say tomorrow we need to drop bombs on Iran.”

For Paul, any potential secretary of state nominee that “didn’t learn the lesson of the war in Iraq” would not earn his support. Corker has compared the U.S. invasion of Iraq to beating a hornet’s nest with a big stick. He was also one of three Republican senators in the Foreign Relations Committee to vote in favor of the U.S.-Russia strategic arms reduction treaty (START) and one of 13 Republicans who voted in favor of it on the Senate floor. Corker was also skeptical of the 2009 Afghan troop surge. “I have no idea what it is, other than sending additional troops,” Corker told AFP. “I hope we dig a lot deeper.”

Corker has said he was “in the mix” for a possible Trump administration role.

James Webb

Former Sen. James Webb (D-Va.) briefly ran for the Democratic nomination for president in the 2016 election cycle, dropping out less than four months after announcing his run. “Some people say I am a Republican who became a Democrat, or that I often sound like a Republican in a room full of Democrats or a Democrat in a room full of Republicans,” Webb said at the time. “I fully accept that my views on many issues are not compatible with the power structure and the nominating base of the Democratic Party.”

In retrospect, Webb, who appealed to the kind of swing voter in the Rust Belt that tipped the election to Donald Trump, may have been the strongest announced candidate Democrats had. On foreign policy, too, Webb provided an alternative that was less hawkish than Clinton, whose enthusiasm for war and intervention surely turned off some voters in the Midwest and beyond.

Webb, as Jim Henley noted in the November 2008 issue of Reason, was one of the “forthright anti-war candidates” Democrats finally decided to run in 2006 to take “real advantage of public dismay with the war.” But Democrats, as Henley noted, were never fully comfortable with such positions, even when they exploited them. The success of 2006, Henley noted, “came in the face of the usual intraparty counsel to avoid losing ‘credibility on national security’.”

Webb’s failure to launch in the presidential election was in part a symptom of the broader death of authentically anti-war candidates over the past several decades, even in the face of continued military failures in the 21st century. Webb has been a proponent of Congress reasserting its role in decisions about making war and was a critic of the U.S. war in Iraq and the 2011 intervention in Libya.

John Duncan

Rep. John Duncan (R-Tenn.) has served in Congress since 1988. While he voted in favor of the Gulf War resolution in 1991, he subsequently voted against the Iraq War in 2002, against bills to fund the war in Iraq, and in favor of setting a withdrawal date in 2007. He also voted against a bill to fund the Afghanistan war in 2010. Duncan was one of 10 members of Congress to try to sue President Obama over the intervention in Libya, for which the president received no Congressional authorization. Howard Phillips, the founder of what would become the Constitution party, called Duncan “one of the unsung heroes of Constitutional conservatism.”

He was one of only six Republican members of Congress to vote against the 2002 authorization of the use of military force in Iraq. At the time, he said he thought the vote could end his political career, as everyone in his very conservative Republican district was telling him to vote in favor of the Iraq war.

He had learned his lesson from his support of the First Gulf War, saying he realized in the aftermath of the war that the threat had been “greatly exaggerated.” Duncan also noted the role of partisan politics in manufacturing support for poor U.S. foreign policy. “Eighty percent of the House Republicans voted against the bombings in Bosnia, Kosovo, and all that,” he told the American Conservative in 2005. “I’m absolutely convinced that if Gore or Clinton had been in the White House, 80 percent of the Republicans would have been against [the Iraq War too].” Such an understanding of the blinding nature of partisanship when it comes to U.S. foreign policy would be a huge asset in a Trump cabinet.

T.J. Rodgers

Trump and his transition team would be remiss if they only considered politicians for roles in the cabinet. Even the State Department could benefit from being guided by someone with extensive experience in the private sector. T.J. Rodgers, the founder of Cypress Semiconductor (and a supporter of Reason Foundation, the nonprofit that publishes this website), is one such candidate.

Throughout his career, Rodgers has been an unabashed defender of free-market capitalism. Given how much the freeing of markets have improved living standards and the quality of lives around the world and how only free markets can actually sustain sustainable development, the world and the United States would benefit from a secretary of state who was an unabashed advocate of real capitalism. Such advocates are not as common, or outspoken, in an American business world increasingly intermingling with government, but Rodgers has repeatedly warned against cronyism here and abroad. Appointing someone who understands this as secretary of state could go along way in restoring justified optimism among Americans and around the world.

Tulsi Gabbard

Yesterday Rep. Tulsi Gabbard (D-Hawaii) met with President-elect Trump, and is reportedly being considered for an appointment at State, Defense, or the United Nations. Gabbard, a combat veteran who volunteered for a 12-month tour of duty in Iraq while serving in the Hawaii Army National Guard, would make an excellent choice for secretary of state, one that would send a clear and unequivocal message about Trump’s interest in breaking from the deadly bipartisan foreign policy status quo.

After her meeting with Trump, she said she “felt it important to take the opportunity to meet with the president-elect now before the drumbeats of war that neocons have been beating drag us into an escalation of the war to overthrow the Syrian government—a war which has already cost hundreds of thousands of lives and forced millions of refugees to flee their homes in search of safety for themselves and their families.”

Gabbard has been an opponent of U.S. intervention in Syria since coming to Congress in 2013, arguing that “intervention in Syria goes against America’s national security, international credibility, economic interest, and moral center.”

While she served in Iraq, she has said she was against the war, and has also called for an end to the Afghanistan war “as soon as possible,” saying the U.S. should never have been in those places to begin with. She is also among a growing faction of members of Congress known as “Saudi skeptics,” voting against U.S. arms sales to Saudi Arabia, and co-sponsored the House version of Rand Paul’s legislation to stop arms sales to Saudi Arabia. In 2014, she backed Michigan Republican Rep. Justin Amash’s amendment to defund the National Security Agency over its warrantless surveillance program.

Gabbard stepped down as vice chair of the Democratic National Committee in February so that she could endorse Bernie Sanders in the Democratic presidential primaries, after complaining that the DNC had not scheduled enough primary debates.

Wesley Clark

The former Democratic candidate for president earned credibility among non-interventionists for his opposition to the war in Iraq, but it wasn’t enough to help him win the Democratic nomination in 2004. Clark has been skeptical about turning to military force first in U.S. foreign policy but also accepts that the U.S. is and ought to remain in a position of global leadership.

“You cannot win the war on terror by military force,” Clark told Democracy Now‘s Amy Goodman in 2007. “It is first and foremost a battle of ideas. It is secondly a law enforcement effort and a cooperative effort among nations. And only as a last resort do you use military force.”

“The truth about the Middle East is, had there been no oil there, it would be like Africa. Nobody is threatening to intervene in Africa,” Clark noted to Goodman. “The problem is the opposite. We keep asking for people to intervene and stop it. There’s no question that the presence of petroleum throughout the region has sparked great power involvement.”

In his 2014 book Don’t Wait for the Next War: A Strategy for American Growth and Global Leadership, Clark lays out what Walter Russell Mead called in the Wall Street Journal a Hamiltonian vision for U.S. foreign policy, where “a strong federal government closely linked to powerful firms in the private sector will promote economic development at home and ensure national security abroad.” In this approach, the U.S. would keep its ability to project power globally but try to avoid conflict when possible.

The problem there is that the ability to project the power sometimes becomes enough to drive policymakers into conflicts. The intervention in Libya, which Clark criticized, could be seen through this framework. Many of the immediate costs of intervening were already baked in to the daily cost of maintaining the U.S. military and its ability to project power.

In a 2011 op-ed in the Washington Post, Clark warned that the American intervention that was then starting in Libya did not meet standards that ought to be met for U.S. interventions. Those include a clear national interest at stake, where the result would be deemed worth the cost of intervention; knowing the purpose of the intervention and how military action would achieve it; determining the political end game before the intervention begins; building public support, obtaining diplomatic and legal authority, and bringing allies into the process; avoiding U.S. and civilian casualties; and getting it over with quickly. Clark is an advocate of continued U.S. intervention in Syria, although it would not appear to meet all of the standards he laid out. Last year, he wrote that the idea of the U.S. and its allies creating “safe zones” for refugees “offers the best, lowest cost and the surest means of regaining some stability in the region.”

Clark is no non-interventionist, but he is certainly a skeptic of intervention and an advocate for caution, which would make him a useful, if unavoidably flawed, member of a Trump cabinet.

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6 Secretary of State Appointments Trump Could Make That Wouldn’t Suck

A number of names have been bandied around as potential Secretary of State nominees for Donald Trump: John Bolton, Newt Gingrich, Rudy Giuliani, even Mitt Romney. None of these selections would be especially surprising but neither do they represent any kind of break from “the establishment” against which many Trump voters voted.

Finding a person who doesn’t accept status-quo assumptions about foreign policy and America’s supposedly indispensable place in the world—or even one who is just willing to take a fresh look at U.S. relations with the rest of the globe—isn’t easy. Decades of bipartisan foreign policy have produced generally pro-intervention analysts, activists, and politicians.

Some Ron Paul supporters who see a spark of noninterventionism in Trump have launched a petition for Trump to nominate the former Republican congressman as secretary of state. A Change.org petition notes the Washington Post‘s Jennifer Rubin was concerned about such a possibility while Paul called it an “unlikely scenario.” At the age of 83, it’s difficult to see Paul as a cabinet member under any circumstances. That said, Paul definitely agrees with Trump’s election-night refrain about wanting the United States to have friendly relations with any country willing to have friendly relations with the U.S. And considering one underlying principle of a Paul State Department would be not inserting the U.S. into every imaginable conflict (diplomatic or otherwise) around the world, Secretary Paul not traveling overseas all the time would be a benefit.

Paul would make an intriguing, establishment-challenging and, most importantly, non-interventionist choice for secretary of state. He would be a great selection. There is also zero chance of that happening. Here are other selections Trump could make that would be pretty good:

Bob Corker

Sen. Rand Paul (R-Ky.) has emerged as a potent Republican critic of the Trump transition. Last week he said he could find enough votes to block a Bolton nomination, and also criticized the idea that Giuliani might be nominated. “Giuliani is a great friend of the president-elect,” Paul acknowledged. “Maybe there could be another position in the cabinet that wouldn’t be putting him in a place where he is at odds with the president’s vision on foreign policy.”

The Republican majority in the Senate has been whittled down from 54 to 51 or 52 (a December 10 run-off will determine whether Louisiana sends a Democrat or Republican to the Senate to replace David Vitter), so Paul does not need to find all that many votes to block any Trump nomination, especially if it’s one that finds little or no support among Democrats.

Paul suggested Sen. Bob Corker (R-Tenn.) as a potential secretary of state nomination for Trump, saying he would “sail through” with more than a dozen Democrats also supporting him. “I would say, while not being libertarian, [Corker] is more of a reasonable, realist kind of person,” Paul told Reason last week. “I think he would be less likely to say tomorrow we need to drop bombs on Iran.”

For Paul, any potential secretary of state nominee that “didn’t learn the lesson of the war in Iraq” would not earn his support. Corker has compared the U.S. invasion of Iraq to beating a hornet’s nest with a big stick. He was also one of three Republican senators in the Foreign Relations Committee to vote in favor of the U.S.-Russia strategic arms reduction treaty (START) and one of 13 Republicans who voted in favor of it on the Senate floor. Corker was also skeptical of the 2009 Afghan troop surge. “I have no idea what it is, other than sending additional troops,” Corker told AFP. “I hope we dig a lot deeper.”

Corker has said he was “in the mix” for a possible Trump administration role.

James Webb

Former Sen. James Webb (D-Va.) briefly ran for the Democratic nomination for president in the 2016 election cycle, dropping out less than four months after announcing his run. “Some people say I am a Republican who became a Democrat, or that I often sound like a Republican in a room full of Democrats or a Democrat in a room full of Republicans,” Webb said at the time. “I fully accept that my views on many issues are not compatible with the power structure and the nominating base of the Democratic Party.”

In retrospect, Webb, who appealed to the kind of swing voter in the Rust Belt that tipped the election to Donald Trump, may have been the strongest announced candidate Democrats had. On foreign policy, too, Webb provided an alternative that was less hawkish than Clinton, whose enthusiasm for war and intervention surely turned off some voters in the Midwest and beyond.

Webb, as Jim Henley noted in the November 2008 issue of Reason, was one of the “forthright anti-war candidates” Democrats finally decided to run in 2006 to take “real advantage of public dismay with the war.” But Democrats, as Henley noted, were never fully comfortable with such positions, even when they exploited them. The success of 2006, Henley noted, “came in the face of the usual intraparty counsel to avoid losing ‘credibility on national security’.”

Webb’s failure to launch in the presidential election was in part a symptom of the broader death of authentically anti-war candidates over the past several decades, even in the face of continued military failures in the 21st century. Webb has been a proponent of Congress reasserting its role in decisions about making war and was a critic of the U.S. war in Iraq and the 2011 intervention in Libya.

John Duncan

Rep. John Duncan (R-Tenn.) has served in Congress since 1988. While he voted in favor of the Gulf War resolution in 1991, he subsequently voted against the Iraq War in 2002, against bills to fund the war in Iraq, and in favor of setting a withdrawal date in 2007. He also voted against a bill to fund the Afghanistan war in 2010. Duncan was one of 10 members of Congress to try to sue President Obama over the intervention in Libya, for which the president received no Congressional authorization. Howard Phillips, the founder of what would become the Constitution party, called Duncan “one of the unsung heroes of Constitutional conservatism.”

He was one of only six Republican members of Congress to vote against the 2002 authorization of the use of military force in Iraq. At the time, he said he thought the vote could end his political career, as everyone in his very conservative Republican district was telling him to vote in favor of the Iraq war.

He had learned his lesson from his support of the First Gulf War, saying he realized in the aftermath of the war that the threat had been “greatly exaggerated.” Duncan also noted the role of partisan politics in manufacturing support for poor U.S. foreign policy. “Eighty percent of the House Republicans voted against the bombings in Bosnia, Kosovo, and all that,” he told the American Conservative in 2005. “I’m absolutely convinced that if Gore or Clinton had been in the White House, 80 percent of the Republicans would have been against [the Iraq War too].” Such an understanding of the blinding nature of partisanship when it comes to U.S. foreign policy would be a huge asset in a Trump cabinet.

T.J. Rodgers

Trump and his transition team would be remiss if they only considered politicians for roles in the cabinet. Even the State Department could benefit from being guided by someone with extensive experience in the private sector. T.J. Rodgers, the founder of Cypress Semiconductor (and a supporter of Reason Foundation, the nonprofit that publishes this website), is one such candidate.

Throughout his career, Rodgers has been an unabashed defender of free-market capitalism. Given how much the freeing of markets have improved living standards and the quality of lives around the world and how only free markets can actually sustain sustainable development, the world and the United States would benefit from a secretary of state who was an unabashed advocate of real capitalism. Such advocates are not as common, or outspoken, in an American business world increasingly intermingling with government, but Rodgers has repeatedly warned against cronyism here and abroad. Appointing someone who understands this as secretary of state could go along way in restoring justified optimism among Americans and around the world.

Tulsi Gabbard

Yesterday Rep. Tulsi Gabbard (D-Hawaii) met with President-elect Trump, and is reportedly being considered for an appointment at State, Defense, or the United Nations. Gabbard, a combat veteran who volunteered for a 12-month tour of duty in Iraq while serving in the Hawaii Army National Guard, would make an excellent choice for secretary of state, one that would send a clear and unequivocal message about Trump’s interest in breaking from the deadly bipartisan foreign policy status quo.

After her meeting with Trump, she said she “felt it important to take the opportunity to meet with the president-elect now before the drumbeats of war that neocons have been beating drag us into an escalation of the war to overthrow the Syrian government—a war which has already cost hundreds of thousands of lives and forced millions of refugees to flee their homes in search of safety for themselves and their families.”

Gabbard has been an opponent of U.S. intervention in Syria since coming to Congress in 2013, arguing that “intervention in Syria goes against America’s national security, international credibility, economic interest, and moral center.”

While she served in Iraq, she has said she was against the war, and has also called for an end to the Afghanistan war “as soon as possible,” saying the U.S. should never have been in those places to begin with. She is also among a growing faction of members of Congress known as “Saudi skeptics,” voting against U.S. arms sales to Saudi Arabia, and co-sponsored the House version of Rand Paul’s legislation to stop arms sales to Saudi Arabia. In 2014, she backed Michigan Republican Rep. Justin Amash’s amendment to defund the National Security Agency over its warrantless surveillance program.

Gabbard stepped down as vice chair of the Democratic National Committee in February so that she could endorse Bernie Sanders in the Democratic presidential primaries, after complaining that the DNC had not scheduled enough primary debates.

Wesley Clark

The former Democratic candidate for president earned credibility among non-interventionists for his opposition to the war in Iraq, but it wasn’t enough to help him win the Democratic nomination in 2004. Clark has been skeptical about turning to military force first in U.S. foreign policy but also accepts that the U.S. is and ought to remain in a position of global leadership.

“You cannot win the war on terror by military force,” Clark told Democracy Now‘s Amy Goodman in 2007. “It is first and foremost a battle of ideas. It is secondly a law enforcement effort and a cooperative effort among nations. And only as a last resort do you use military force.”

“The truth about the Middle East is, had there been no oil there, it would be like Africa. Nobody is threatening to intervene in Africa,” Clark noted to Goodman. “The problem is the opposite. We keep asking for people to intervene and stop it. There’s no question that the presence of petroleum throughout the region has sparked great power involvement.”

In his 2014 book Don’t Wait for the Next War: A Strategy for American Growth and Global Leadership, Clark lays out what Walter Russell Mead called in the Wall Street Journal a Hamiltonian vision for U.S. foreign policy, where “a strong federal government closely linked to powerful firms in the private sector will promote economic development at home and ensure national security abroad.” In this approach, the U.S. would keep its ability to project power globally but try to avoid conflict when possible.

The problem there is that the ability to project the power sometimes becomes enough to drive policymakers into conflicts. The intervention in Libya, which Clark criticized, could be seen through this framework. Many of the immediate costs of intervening were already baked in to the daily cost of maintaining the U.S. military and its ability to project power.

In a 2011 op-ed in the Washington Post, Clark warned that the American intervention that was then starting in Libya did not meet standards that ought to be met for U.S. interventions. Those include a clear national interest at stake, where the result would be deemed worth the cost of intervention; knowing the purpose of the intervention and how military action would achieve it; determining the political end game before the intervention begins; building public support, obtaining diplomatic and legal authority, and bringing allies into the process; avoiding U.S. and civilian casualties; and getting it over with quickly. Clark is an advocate of continued U.S. intervention in Syria, although it would not appear to meet all of the standards he laid out. Last year, he wrote that the idea of the U.S. and its allies creating “safe zones” for refugees “offers the best, lowest cost and the surest means of regaining some stability in the region.”

Clark is no non-interventionist, but he is certainly a skeptic of intervention and an advocate for caution, which would make him a useful, if unavoidably flawed, member of a Trump cabinet.

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via IFTTT

6 Secretary of State Appointments Trump Could Make That Wouldn’t Suck

A number of names have been bandied around as potential Secretary of State nominees for Donald Trump: John Bolton, Newt Gingrich, Rudy Giuliani, even Mitt Romney. None of these selections would be especially surprising but neither do they represent any kind of break from “the establishment” against which many Trump voters voted.

Finding a person who doesn’t accept status-quo assumptions about foreign policy and America’s supposedly indispensable place in the world—or even one who is just willing to take a fresh look at U.S. relations with the rest of the globe—isn’t easy. Decades of bipartisan foreign policy have produced generally pro-intervention analysts, activists, and politicians.

Some Ron Paul supporters who see a spark of noninterventionism in Trump have launched a petition for Trump to nominate the former Republican congressman as secretary of state. A Change.org petition notes the Washington Post‘s Jennifer Rubin was concerned about such a possibility while Paul called it an “unlikely scenario.” At the age of 83, it’s difficult to see Paul as a cabinet member under any circumstances. That said, Paul definitely agrees with Trump’s election-night refrain about wanting the United States to have friendly relations with any country willing to have friendly relations with the U.S. And considering one underlying principle of a Paul State Department would be not inserting the U.S. into every imaginable conflict (diplomatic or otherwise) around the world, Secretary Paul not traveling overseas all the time would be a benefit.

Paul would make an intriguing, establishment-challenging and, most importantly, non-interventionist choice for secretary of state. He would be a great selection. There is also zero chance of that happening. Here are other selections Trump could make that would be pretty good:

Bob Corker

Sen. Rand Paul (R-Ky.) has emerged as a potent Republican critic of the Trump transition. Last week he said he could find enough votes to block a Bolton nomination, and also criticized the idea that Giuliani might be nominated. “Giuliani is a great friend of the president-elect,” Paul acknowledged. “Maybe there could be another position in the cabinet that wouldn’t be putting him in a place where he is at odds with the president’s vision on foreign policy.”

The Republican majority in the Senate has been whittled down from 54 to 51 or 52 (a December 10 run-off will determine whether Louisiana sends a Democrat or Republican to the Senate to replace David Vitter), so Paul does not need to find all that many votes to block any Trump nomination, especially if it’s one that finds little or no support among Democrats.

Paul suggested Sen. Bob Corker (R-Tenn.) as a potential secretary of state nomination for Trump, saying he would “sail through” with more than a dozen Democrats also supporting him. “I would say, while not being libertarian, [Corker] is more of a reasonable, realist kind of person,” Paul told Reason last week. “I think he would be less likely to say tomorrow we need to drop bombs on Iran.”

For Paul, any potential secretary of state nominee that “didn’t learn the lesson of the war in Iraq” would not earn his support. Corker has compared the U.S. invasion of Iraq to beating a hornet’s nest with a big stick. He was also one of three Republican senators in the Foreign Relations Committee to vote in favor of the U.S.-Russia strategic arms reduction treaty (START) and one of 13 Republicans who voted in favor of it on the Senate floor. Corker was also skeptical of the 2009 Afghan troop surge. “I have no idea what it is, other than sending additional troops,” Corker told AFP. “I hope we dig a lot deeper.”

Corker has said he was “in the mix” for a possible Trump administration role.

James Webb

Former Sen. James Webb (D-Va.) briefly ran for the Democratic nomination for president in the 2016 election cycle, dropping out less than four months after announcing his run. “Some people say I am a Republican who became a Democrat, or that I often sound like a Republican in a room full of Democrats or a Democrat in a room full of Republicans,” Webb said at the time. “I fully accept that my views on many issues are not compatible with the power structure and the nominating base of the Democratic Party.”

In retrospect, Webb, who appealed to the kind of swing voter in the Rust Belt that tipped the election to Donald Trump, may have been the strongest announced candidate Democrats had. On foreign policy, too, Webb provided an alternative that was less hawkish than Clinton, whose enthusiasm for war and intervention surely turned off some voters in the Midwest and beyond.

Webb, as Jim Henley noted in the November 2008 issue of Reason, was one of the “forthright anti-war candidates” Democrats finally decided to run in 2006 to take “real advantage of public dismay with the war.” But Democrats, as Henley noted, were never fully comfortable with such positions, even when they exploited them. The success of 2006, Henley noted, “came in the face of the usual intraparty counsel to avoid losing ‘credibility on national security’.”

Webb’s failure to launch in the presidential election was in part a symptom of the broader death of authentically anti-war candidates over the past several decades, even in the face of continued military failures in the 21st century. Webb has been a proponent of Congress reasserting its role in decisions about making war and was a critic of the U.S. war in Iraq and the 2011 intervention in Libya.

John Duncan

Rep. John Duncan (R-Tenn.) has served in Congress since 1988. While he voted in favor of the Gulf War resolution in 1991, he subsequently voted against the Iraq War in 2002, against bills to fund the war in Iraq, and in favor of setting a withdrawal date in 2007. He also voted against a bill to fund the Afghanistan war in 2010. Duncan was one of 10 members of Congress to try to sue President Obama over the intervention in Libya, for which the president received no Congressional authorization. Howard Phillips, the founder of what would become the Constitution party, called Duncan “one of the unsung heroes of Constitutional conservatism.”

He was one of only six Republican members of Congress to vote against the 2002 authorization of the use of military force in Iraq. At the time, he said he thought the vote could end his political career, as everyone in his very conservative Republican district was telling him to vote in favor of the Iraq war.

He had learned his lesson from his support of the First Gulf War, saying he realized in the aftermath of the war that the threat had been “greatly exaggerated.” Duncan also noted the role of partisan politics in manufacturing support for poor U.S. foreign policy. “Eighty percent of the House Republicans voted against the bombings in Bosnia, Kosovo, and all that,” he told the American Conservative in 2005. “I’m absolutely convinced that if Gore or Clinton had been in the White House, 80 percent of the Republicans would have been against [the Iraq War too].” Such an understanding of the blinding nature of partisanship when it comes to U.S. foreign policy would be a huge asset in a Trump cabinet.

T.J. Rodgers

Trump and his transition team would be remiss if they only considered politicians for roles in the cabinet. Even the State Department could benefit from being guided by someone with extensive experience in the private sector. T.J. Rodgers, the founder of Cypress Semiconductor (and a supporter of Reason Foundation, the nonprofit that publishes this website), is one such candidate.

Throughout his career, Rodgers has been an unabashed defender of free-market capitalism. Given how much the freeing of markets have improved living standards and the quality of lives around the world and how only free markets can actually sustain sustainable development, the world and the United States would benefit from a secretary of state who was an unabashed advocate of real capitalism. Such advocates are not as common, or outspoken, in an American business world increasingly intermingling with government, but Rodgers has repeatedly warned against cronyism here and abroad. Appointing someone who understands this as secretary of state could go along way in restoring justified optimism among Americans and around the world.

Tulsi Gabbard

Yesterday Rep. Tulsi Gabbard (D-Hawaii) met with President-elect Trump, and is reportedly being considered for an appointment at State, Defense, or the United Nations. Gabbard, a combat veteran who volunteered for a 12-month tour of duty in Iraq while serving in the Hawaii Army National Guard, would make an excellent choice for secretary of state, one that would send a clear and unequivocal message about Trump’s interest in breaking from the deadly bipartisan foreign policy status quo.

After her meeting with Trump, she said she “felt it important to take the opportunity to meet with the president-elect now before the drumbeats of war that neocons have been beating drag us into an escalation of the war to overthrow the Syrian government—a war which has already cost hundreds of thousands of lives and forced millions of refugees to flee their homes in search of safety for themselves and their families.”

Gabbard has been an opponent of U.S. intervention in Syria since coming to Congress in 2013, arguing that “intervention in Syria goes against America’s national security, international credibility, economic interest, and moral center.”

While she served in Iraq, she has said she was against the war, and has also called for an end to the Afghanistan war “as soon as possible,” saying the U.S. should never have been in those places to begin with. She is also among a growing faction of members of Congress known as “Saudi skeptics,” voting against U.S. arms sales to Saudi Arabia, and co-sponsored the House version of Rand Paul’s legislation to stop arms sales to Saudi Arabia. In 2014, she backed Michigan Republican Rep. Justin Amash’s amendment to defund the National Security Agency over its warrantless surveillance program.

Gabbard stepped down as vice chair of the Democratic National Committee in February so that she could endorse Bernie Sanders in the Democratic presidential primaries, after complaining that the DNC had not scheduled enough primary debates.

Wesley Clark

The former Democratic candidate for president earned credibility among non-interventionists for his opposition to the war in Iraq, but it wasn’t enough to help him win the Democratic nomination in 2004. Clark has been skeptical about turning to military force first in U.S. foreign policy but also accepts that the U.S. is and ought to remain in a position of global leadership.

“You cannot win the war on terror by military force,” Clark told Democracy Now‘s Amy Goodman in 2007. “It is first and foremost a battle of ideas. It is secondly a law enforcement effort and a cooperative effort among nations. And only as a last resort do you use military force.”

“The truth about the Middle East is, had there been no oil there, it would be like Africa. Nobody is threatening to intervene in Africa,” Clark noted to Goodman. “The problem is the opposite. We keep asking for people to intervene and stop it. There’s no question that the presence of petroleum throughout the region has sparked great power involvement.”

In his 2014 book Don’t Wait for the Next War: A Strategy for American Growth and Global Leadership, Clark lays out what Walter Russell Mead called in the Wall Street Journal a Hamiltonian vision for U.S. foreign policy, where “a strong federal government closely linked to powerful firms in the private sector will promote economic development at home and ensure national security abroad.” In this approach, the U.S. would keep its ability to project power globally but try to avoid conflict when possible.

The problem there is that the ability to project the power sometimes becomes enough to drive policymakers into conflicts. The intervention in Libya, which Clark criticized, could be seen through this framework. Many of the immediate costs of intervening were already baked in to the daily cost of maintaining the U.S. military and its ability to project power.

In a 2011 op-ed in the Washington Post, Clark warned that the American intervention that was then starting in Libya did not meet standards that ought to be met for U.S. interventions. Those include a clear national interest at stake, where the result would be deemed worth the cost of intervention; knowing the purpose of the intervention and how military action would achieve it; determining the political end game before the intervention begins; building public support, obtaining diplomatic and legal authority, and bringing allies into the process; avoiding U.S. and civilian casualties; and getting it over with quickly. Clark is an advocate of continued U.S. intervention in Syria, although it would not appear to meet all of the standards he laid out. Last year, he wrote that the idea of the U.S. and its allies creating “safe zones” for refugees “offers the best, lowest cost and the surest means of regaining some stability in the region.”

Clark is no non-interventionist, but he is certainly a skeptic of intervention and an advocate for caution, which would make him a useful, if unavoidably flawed, member of a Trump cabinet.

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via IFTTT

University Bullied Students to Change ‘America’ Theme Party Because Trump Won

LoyolaIn the wake of Donald Trump’s victory, some students and administrators at Loyola University Maryland aren’t feeling very American anymore. As a result, they put pressure on the student-government to change its “America” theme party for seniors to something less “alienating, divisive, and harmful.”

The theme was chosen last summer, long before Trump captured the White House. But the morning after Election Day, some students immediately began re-thinking the theme.

According to The Daily Caller, one female student told Loyola’s Student Government Association that she felt like “a victim of horrible hate words,” and expected to be re-traumatized at the party. The university administration intervened as well, pressuring SGA to change course.

“None of it is positive and it sounds very alienating, divisive and harmful,” said Executive Vice President Susan Donovan in an email. “We have made progress in providing a welcoming climate on campus and do we want to reverse that progress with a theme that divides us?”

Dean of Students Sheilah Horton fretted that the America-themed party “provides an opportunity for students to dress or behave in a way that offends or oppresses others.” She noted that even one negative event could cause the entire community to feel unsafe.

That’s all according to emails obtained exclusively by The Daily Caller.

Administrative efforts failed: the party took place as planned on November 18.

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“What If Market Consensus Is Wrong” – A Hedge Fund Ponders The Alternative

A week ago we posed a simple qustion:”is the market wrong” in bidding up risk assets in a time of rapidly tightening financial conditions. With the S&P likely set to rise above 2,200 today, a new all time high, the market at least for now, remains “right.” However, more doubt has emerged.

In a note from our friends at Fasanara Capital, CIO Francesco Filia repeats the question we posed last week, contemplating what may be a “delusion” emerging on the boundary between reflation/growth and a QE bubble unwind. As Filia puts it, “what if consensus is wrong: what if rates are rising due to the end of Quantitative Easing and not because of reflation/escape velocity on growth?” He continues:

Rates then rise without growth, perhaps even without much inflation. Indeed, rates started rising back in August, on momentous shifts in policy by BoJ (forced by capacity constraints and collateral damage). Such scenario is not good for equities, contrary to what currently believed by markets.”

Indeed, such a scenario would be the worst possible one: with potential stagflation on the horizon, the last thing markets can afford is a withdrawal in central bank support just as US deficit funding needs are set to spike, something we have been cautioning for the past two weeks.

In any event, if the market is wrong about this most fundamental signal, what else is it wrong about? Here are the key highlights of Fasanara’s thought:

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Delusions: Rates Rising on Reflation/Growth or QE Bubble Unwind?

What if consensus is wrong: what if rates are rising due to the end of Quantitative Easing and not because of reflation/escape velocity on growth? Rates then rise without growth, perhaps even without much inflation. Indeed, rates started rising back in August, on momentous shifts in policy by BoJ (forced by capacity constraints and collateral damage). Such scenario is not good for equities, contrary to what currently believed by markets.

With Trump rising to power against all the odds of bookies, pollsters, a militant press, a reflexive army of pundits and an all-guns-out establishment, it is all too clear who are the big losers of these elections. After the supposed shocks of Brexit and Amerexit, you may imagine less and less market participants to pay attention next to pollsters, bookies and analysts in informing investment decisions at the next check point.

But there is a bigger loser, and that is the Efficient Market Hypothesis itself, a cornerstone of modern financial theory, which states that all relevant information are embedded in prices, making them fair prices. Going into the event a win by Trump was widely perceived to be an outright disaster. Coming off the event, after an initial shock, equity markets staged one of the most impressive rebounds in history. Clearly, this is not an example of rationale investment behaviour. From Armageddon to Paradise on Earth in just few hours. The market had known full well what the aftermath of a Trump win looked like, had been given plenty time to strategize on that, and yet it all seemed really new news. Ex-post, narratives of cash on the sidelines, retail coming in, fiscal expansion /reflation reality sinking in, are all handy but unconvincing scapegoats.

We look at this as the thinking trap setting the stage for the next moment of market volatility, which may be more violent and damaging as it would have otherwise been – even in the absence of fundamentals further deteriorating to a point where the need for re-pricing would be self-evident. The market structure of large passive investors (index funds and ETFs / ETPs at ca. $4tn), mechanical trend-chasing algo strategies (the bulk of a $0.5tn industry) and volatility-driven investors base (Risk-Parity, structured notes, vol-levers at up to $3.75tn), making up close to 90% of daily equity flows, is such that this illusion of knowledge and anchoring behavioural bias happens at a point of great danger for markets. Needless to say, parallels can be drawn for moments in history where similar ex-post rationalizations, proclivity to dismiss risks and climb the wall of worry resulted in deep declines (years 1929, 1937, 1966, 1972, 1987, 2000 and 2007). We will not go in there, this time, not to always sound as bearish as we actually are. We shall look at it as an opportunity to position for an outcome we (and few others nowadays) are abandoned solo believing into, making its payoff as asymmetric as it could possibly be. The majority of most prominent bearish players recently capitulated, taking the gamble / excuse of a Trump-win (including smart-money big names like Dalio, Druckenmiller, Gundlach and Icahn). To us, the drumbeats of potential downside gap risk for bonds and equities remain loud. Recent events (Trump, Brexit, BoJ) come in confirmation of our contention of where we are headed (de-globalisation trends, geopolitical uncertainty, beginning of the end for QE, bond bubble busting); volatility/leptokurtosis is on the rise, market complacency is vulnerable to sudden wake-up calls, political tail-risks are on definite upward trend (especially in the EU).

Let’s go back to Trump and try to recap what the market currently thinks he stands for in terms of economic and financial environment: resurrection of inflation, escape velocity on GDP growth via defence and infrastructure spending, repatriation of trillions of US Corporates’ foreign profits, pro-growth de-regulation, aggressive corporate and income tax cuts, de-globalisation stance benefiting internal affairs over EMs and cross-border flows.

Inflation yes, but what GDP growth? A few comments:

  1. Ultra-loose monetary policy and full QE is more bullish equities than fiscal stimulus can ever be. This is the key element in our eyes, and we will expand on it below.
  2. Gavekal reminds us that higher government spending tends to lead to lower P/E ratios, on empirical evidence from the last decade, due to misallocation of resources past a certain point, at a time where low-hanging-fruit capital spending programs are not easy to see.
  3. What about inflation and equities? Gavekal research also reminds us that accelerating inflation leads to lower P/Es. Time wasted in re-modulating prices and wages, stockpiling of commodities and inventories, and the likes.
  4. Protectionism and trade wars typically lead to less global GDP, as main contributors to GDP growth by and large were EM in recent years, after all, despite weak commodities.
  5. De-regulation policies help but the debt pile is huge already, and one wonders if Capex re-lever is not yet priced in, given where P/E Shiller adjusted are.
  6. The repatriation of foreign profits will make cash-rich companies cash richer. Yet, they are awash in cash already and did not find a business proposition motivating enough to exchange savings for investments thus far. More cash alone will not change their utility function.
  7. Indeed, excess cash on the sidelines is often times a blue-sky narrative hiding a reality of debt rising even faster, resulting in higher net debt. The case of US Corporates is pictured here below.

So we have inflation yes, but what growth? And what if we get not much growth and not much inflation either?

Indeed, there is a bigger question to ask: are we sure rates are spiking higher on the back of a credible re-rating of growth/inflation and not because we are in the final phase of Quantitative Easing globally (BoJ, ECB, BoE) and ultra-loose monetary policy (Fed)?

Indeed, it is back in August that rates started rising from rock-bottom levels globally, on the BoJ back-pedalling from unlimited permanent QE. Later on in September, the BoJ introduced the ‘yield curve control’ mechanism, which only equates to QE if rates are above a certain threshold, while it means tapering/tightening if rates are below. To us, that is a de facto acknowledgement of reached capacity. Consistently, the ECB refrained so far from enlarging its QE program in duration or size. Consistently, the UK government came out in open criticism to the policies of the BoE, arguing that QE is not the answer to all questions. Below we reiterate our reasons on why we believe QE is running out of road and will be phased out relatively soon.

If we are right and rates spike primarily because of policy shifts from major Central Banks, then we may see rates continue to rise while inflation remains subdued, resulting in higher real rates. Higher real rates are an impediment to growth picking up much from here, and a heavy damage to the excess debt accrued in recent years, thus being inherently bad for equities. Rates then rise, bonds fall as full QE moderates / unwinds, while equity comes down and GDP growth falters – i.e. unwind of the QE trade of being long bonds / long equities.

On balance, absent damaging trade wars, we think Brexit and Trump have the potential to be positive medium-term developments for real people in the real economy, given the well-overdue reach to people’s discontent and the scope for redistribution of income and more inclusive growth. It does not make them necessarily positive for financial markets, though. Fiscal stimulus (here our research) do help the real economy, but nothing can ever be as good as full-steam QE for both equities and bonds. And if you assume that such bonds and equities fully price in ‘full QE’, which we do, then it is legit to expect a re-pricing.

The QE bubble – being a bubble – had never anything to do with valuations. It was cheap credit, buybacks, lack of investment alternatives as bond yields imploded to minuscule levels in most advanced economies. It was deflationary boom markets, where the economy did very poorly and ammo-rich Central Banks forced equity and bonds artificially higher. It all happened while debt in the system was rising faster than GDPs and earnings, resulting in deteriorating debt/GDP and net debt/EBITDA ratios all across countries and businesses – no exception. Now exit that monetary tailwind.

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Transitioning from ‘Full QE’ to ‘Some Fiscal Stimulus’: Bumpy Road

2016 will likely be remembered for the paradigm shift brought by the interconnection of Trump / Brexit / populism / protectionism / end of Full QE. Critically, the transition from ‘Full QE mode’ into ‘Some Fiscal Expansion mode’ will be no smooth ride for markets. There is nothing as good as ‘Full QE’ for bonds and equities. Full QE mechanically boosts equities and bonds higher, although with diminishing efficacy over time. Fiscal expansion, instead, has (i) execution risks (longer time to delivery, uncertainties over resource (mis)-allocation across industries & population cohorts), (ii) headwinds as rates and wages rise (thus squeezing corporate margins from all-time highs). Safe to assume volatility will rise / may spike. Possible to see large potential downside gap risks on bonds and equity.

 

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Regime Changes Happening On A Dangerous Market Structure

Amid such policy shifts, the potential downside is exacerbated by the thin ice of a dangerous market structure, dominated by rule-based / passive-aggressive investment strategies. Close to 90% of equity flows (from 7% 15 years ago) can today be attributed to either passive index funds or ETFs, Risk-Parity funds or Volatility-driven strategies, trend-chasing algos. Altogether, they now represent close to $8 trillion of AUM in firepower (rate of acceleration in recent years is staggering).

No wonder buy-the-dip is the strategy-elect these days. No wonder anything short of ‘buy-and-hold, fully invested’ underperformed in recent years. There is no way to know when and if such powerful forces may set in reverse motion at once, following a market downturn – nor, though, could one ever be surprised if that happens. Whether it does or not, off any catalyst or off no catalyst at all, will define the difference between a crash and a flash crash, a mild correction or a violent enduring re-pricing, a January 2016-type wacky market or a Lehman-moment.

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Positioning for QE Bubble Unwind, Populism/EU Disorder

At Fasanara Capital, we think it pays to be positioned for disorder from here. The asymmetry of payout profiles and risk-adjusted returns, let alone our macro assessment of where things stand, calls to position for an unwind of the QE bubble trade, which means bonds and equity down together, the polar opposite of Risk Parity funds or, more generally, balance portfolios (long equities, long bonds).

In a nutshell, the black clouds of regime changes has filled the horizon (full QE in retreat, Trump / Brexit / EU populism and political un-predictability, Dollar strength). It started raining already (rates spiking) and the illusion of knowledge bias / buy-the-dip mind-frames work as a thinking trap setting the stage for the next downfall. A market structure dominated by rule-based passive-aggressive machines make such downfall potentially way larger than it could have otherwise been.

The worst downside is for the EU, where (i) populism has built up over the years, now reaching a tipping point after the boost of Trump/Brexit and (ii) the transition out of ‘full QE mode’ is a bridge to nowhere. Willingness / capacity to fiscal stimulate in the EU is underwhelming. To adequately fiscal expand and drop money from helicopters you must be in need of your own currency: exit EUR.

 

Much more in the full note below (pdf):

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