Two Contradictory Thoughts About Elections

The election is over.  I am left with two very contradictory feelings.  First is the one of appreciation – every four years we peacefully replace our government.

I remember my parents in the late 1970s discussing Soviet politics at our house with their close friend.  Their friend said something anti-Soviet.  I vividly remember the fear in my mother’s eyes when she realized I had overheard that part of the conversation.  Views that were contrary to “politics of the party” were not tolerated.  If I repeated what I heard in kindergarten, my teacher could report it to authorities and my parents (not me) would get in trouble – a six-year-old kid could only hear this sort of anti-Soviet talk at home (TV, radio, and newspapers were a pro-Soviet propaganda machine).   My parents would not be sent to the gulag, but they could lose their jobs.  If this sounds farfetched, my father’s best friend, a colleague and professor at Murmansk Marine Academy, was fired for possession of anti-Soviet propaganda – a copy of Solzenitsyn’s Gulag Archipelago.  It took him years to get another job, and it was almost twenty years later, when Soviet Union fell apart, that he was finally able to get a decent teaching job.

We do tend to take our democratic elections for granted and under appreciate the fact that we can openly express our views.  But there is also the other, new feeling, one of disgust.  Yes, disgust.   There is something deeply wrong with the US election process.  Between the presidential candidates and the congressional races $4.2 billion was spent (wasted) on the election.  To spend that kind of money, first you have to raise it.  Politicians whore around the country and sell their souls and beliefs to whomever will give them the most money.  And here is the sad truth: if you don’t raise money the other guy will, and then he can outspend  you – he can slaughter you, as his lies will be magnified louder with TV and radio ads, and the victory will be his.  As I am writing this I am realizing that allowing politicians to spend unlimited amounts of money on elections is not unlike allowing steroids in sport – even the strongest athlete will lose to a weaker opponent who is pumped on steroids.

Also, this election process will turn even a very honorable person into a liar or half-truth teller, because it is simply impossible to express complex ideas in thirty-second sound bites.  Even during the presidential debates, where candidates were allowed a few minutes to make their case, every claim both candidates made had to be fact checked the next morning.   We must be scratching an all-time low in politics when we feel the need to fact check the statements of the candidates running for the highest office in the land, the President of the United States, the office that should be the moral compass for the country.  If we accept lies and half-truths from them as politics as usual, what do you expect from just a mortal senator or a congressman?

The partisan politics of this country is simply insane.  I observed both Republican and Democrat friends who are otherwise rational people that I deeply respect turning into mindless robots when the conversation turned to politics.  It seemed that their cognitive abilities to think were wiped and replaced by a party program as they mindlessly repeated half-truths and lies that were propagated by the party mothership, without any critical thinking of their own.  It was simply scary.

But there is a silver lining with US politics.  Call me a disillusioned optimist, but no matter what the outcome of the election, this country has and will continue to survive bad congressmen, senators, and even bad presidents.

P.S.  In the musical note section I want to share with you Franz Liszt’s Piano Concerto No. 1, performed by Lang Lang.   As one of my favorite childhood memories, I remember walking home with my father on a sunny Sunday afternoon.  I was maybe nine years old.   There was the sound of classical music coming from the fourth-floor window of our apartment building.  Our neighbor was listening to music very loud.  My father said with admiration, “She is listening to Liszt.”   This was the first time I had heard of Franz Liszt.  I remember father explaining to me the “z” in his name and it was spelled differently from list, which in Russian means “leaf.”   I don’t remember the music, but I do remember a certain respect in my father’s voice for the neighbor and her preference in music.

Vitaliy N. Katsenelson, CFA, is Chief Investment Officer at Investment Management Associates in Denver, Colo.  He is the author of The Little Book of Sideways Markets (Wiley, December 2010).  To receive Vitaliy’s future articles by email, click here or read his articles here.

Investment Management Associates Inc. is a value investing firm based in Denver, Colorado.  Its main focus is on growing and preserving wealth for private investors and institutions while adhering to a disciplined value investment process, as detailed in Vitaliy Katsenelson’s Active Value Investing (Wiley, 2007) book.

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