August marks the start of school for much of the U.S. The Palm Beach County schools start August 13! If you still need to do school shopping, this weekend is Tax-Free Weekend in Florida. From Friday, August 3rd through Sunday, August 5th, clothing, footwear, and certain school supplies are tax free. The Florida Department of Revenue provides a complete list of eligible purchases. Many other states also have Tax Free Weekends with similar benefits.
Although most books aren’t tax-free this weekend, the affordable In 90 Pages books are worth the extra tax cents to get off to a good start. Word, Excel, and PowerPoint are essential skills for every student. Students are even often expected to know how to create a document, spreadsheet, and presentation with no extra instruction. The In 90 Pages series provides clear, step-by-step instruction, and an easy to use QUICK REFERENCE page keyed to the…
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Today, June 12, 2018, legendary macro investor Paul Tudor Jones did a commercial free interview on CNBC to promote tomorrow’s rollout of the new ETF “JUST”. Jones is someone I have followed for decades and is someone worthy of respect as he has built a multi-billion dollar fortune while privately preserving thousands of acres of land around the globe. Jones has long had the confidence of life and business strategist Tony Robbins and recently opened offices on Palm Beach, Florida.
“JUST” is based on backtesting the performance of socially responsible companies based on a nationwide poll of Americans to their definition of what it means for a company to be socially responsible. Based on that backtesting it is projected to outperform the Russell 1000 and the S&P 500. As one can imagine, there is a wide array of opinions about social investing and conscious capitalism.
First and foremost, there is nothing wrong with conscious capitalism and I personally would subscribe to many of its standards. Conscious capitalism is completely in tune with the base term of capitalism though some try and twist its true meaning. Before going further, I welcome JUST to the ETF stage so this is simply a brief examination of Jones’ interview and whether we need to “modernize capitalism.”
During the interview, Jones took issue with the Milton Friedman philosophy that the responsibility of a corporation is to return profits to its shareholders. Jones said, “When Milton Friedman said, that tax rates had just come from 91 percent to 70 and income inequality was one-fifth of what it is today. You can see how it was relevant at the time but fast forward to where we are today, it’s a different deal.”
I would argue that trying to redefine “capitalism” or “modernize” the word is an unneeded exercise. People need to understand what capitalism actually is as opposed to the distortions made by many. Capitalism is only the free voluntary exchange of value from one to another. That is it. There is no other valid definition. Where we run into the weeds is when we confuse cronyism and government force with capitalism. When a company uses government force or taxpayer money in the name of “economic development” to advance itself over its competition then that is NOT capitalism. When are corporate uses fraud and other deviant means to profit, then that is NOT capitalism.
An interesting fact not asked of Jones during the interview is that arguably the best investor alive today is Warren Buffett and he has long held through his Berkshire Hathaway (BRK) the same opinion of Friedman. Buffett holds that it is the duty of the corporation to profit well, compensate employees & stockholders, and through an employee’s personal income and investor’s profits of stock to donate to their preferred charity. It is not the corporation’s responsibility to be charitable, but to maximize profits. BRK and Buffett do not believe corporations should give charity directly but it is expected of their employees and shareholders to perform charity on their own terms. So, while Buffett is personally the single most charitable man in America, one would be hard-pressed to find any meaningful charity from BRK. It is because BRK has grown to such a level that Buffett is able to personally be as charitable as he is.
It is important to bring up Buffett because he is mostly an equities investor as JUST will be as well, while Jones is more of a macro investor which extends far beyond equities. It will be interesting to see how JUST develops and performs over the coming years in its returns to investors and society as a whole. And by the way, although I hold Buffett in high esteem, he is not without his own flagrant crony capitalistic exploits.
Jones and Buffett do agree that the government is a horrible redistributor of capital and it is best to leave it to private business through voluntary exchange rather than forced government takings. Buffett has said, “The free market’s the best mechanism ever devised to put resources to their most efficient and productive use. … The government isn’t particularly good at that. But the market isn’t so good at making sure that the wealth that’s produced is being distributed fairly or wisely.” On the same issue of government redistribution, Jones said during the interview, “THAT’S THE WORST OF ALL OUTCOMES BECAUSE THAT’S THE WORST WAY TO REDISTRIBUTE INCOME.” Through JUST and his other causes, Jones is looking to redistribute wealth organically, outside the inefficiencies and force of government.
“President Trump’s administration is reportedly seeking a 72 percent cut to the budget of Department of Energy programs related to energy efficiency and renewable energy,” The Hill reports. “Draft budget documents obtained by The Washington Post show the Trump administration will ask for $575.5 million in spending for the Energy Department’s Office of Energy Efficiency and Renewable Energy. The office’s current spending level is set at $2.04 billion for the fiscal year.”
That’s a great start and we should not just isolate this aspect of the energy sector; it should extend to ALL sectors. Renewable energy subsidies distort the free market and keep electricity prices high for all of us. This distortion is true in all areas of government subsidies.
Farm subsidies, crony capitalism, sugar, golf courses, corporate welfare, oil, etc. The list of subsidies provided by the federal, state and local governments is nearly endless. It has become so entrenched in our society that we no longer know the true cost of anything Americans purchase.
So, while the different levels of government in our country try to push various agendas to make our world “better,” they all-to-often go the wrong way and almost always with unintended consequences. Additionally, one cannot forget the corruption that quickly follows most subsidy programs.
This morning, February 2, 2018, the non-profit Palm Beach Naturists sent a demand letter to Palm Beach County Commissioners. It was a call for a family-friendly clothing-optional beach at one of their 11 public county beaches (see below). Last year, they were unofficially denied; however, the naturists still are retaining their right under Florida law to set up a clothing optional beach on their own. If the county does not act by their April 20, 2018, commission meeting, then the growing group says they will do it themselves, setting up their own signs and will decide which beach it will be.
They also have an online petition they just started which they expect to have over 1,000 signatures by the close of February. The group looks forward to “thousands of Palm Beach County residents and tourists will be able to enjoy a family-friendly clothing optional beach in our own backyard…
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