Monday, February 22, 2016

Rich Man, Poor Man

Two men from opposite ends of the economic spectrum have had a significant impact on the political landscape this year.

Bernie Sanders, the self-described Socialist, and Donald Trump, the real estate magnate, have turned the political establishment upside down.

Trump is listed at #121 on the Forbes list of the richest Americans with $4.5 billion. Of course, Trump claims he is worth twice that.

Sanders earns his reputation as a Socialist honestly. Until he was age 40 he never had a steady job or paycheck. Of course, when he got a steady job it was a government job---Mayor of Burlington, Vermont.

Investor's Business Daily provided some useful background on "Bernie Sanders, The Bum Who Wants Your Money" in a recent editorial.

Sanders spent most of his life as an angry radical and agitator who never accomplished much of anything.  
One of his first jobs was registering people for food stamps, and it was all downhill from there.
Sanders took his first bride to live in a maple sugar shack with a dirt floor, and she soon left him. Penniless, he went on unemployment. Then he had a child out of wedlock. Desperate, he tried carpentry but could barely sink a nail. “He was a shi**y carpenter,” a friend told Politico Magazine. “His carpentry was not going to support him, and didn’t.”
Then he tried his hand freelancing for leftist rags, writing about “masturbation and rape” and other crudities for $50 a story. He drove around in a rusted-out, Bondo-covered VW bug with no working windshield wipers. Friends said he was “always poor” and his “electricity was turned off a lot.” They described him as a slob who kept a messy apartment — and this is what his friends had to say about him.

Despite the fact that Sanders was elected to the U.S. House of Representatives in 1990 and the U.S. Senate in 2006, he still is considered one of the poorest members in Congress despite over 25 years of a steady paycheck.

Save for a municipal pension, Sanders lists no assets in his name. All the assets provided in his financial disclosure form are his second wife’s. He does, however, have as much as $65,000 in credit-card debt.  

Nevertheless, Sanders is giving Hillary Clinton and the Democratic donor class a run for their money. And I am talking about a lot of money. Hillary has already spent over $100 million in her run for President. And the vast amount of the money she has raised has come from those contributing $1,000 or more.

Sanders, on the other hand, has raised almost $100 million of which over 70% has been received from people who gave less than $200.

Of course, Trump is as rich as Sanders is poor.

However, I have found it interesting that despite what Trump says about his superior business acumen, Trump could have done just as well retiring in 1982, invested the $200 million he had then according to Forbes, and letting the stock market do the rest.

From January 1, 1982 through December 31, 2015, the S&P 500 Index had a annual compound growth rate of 11.53%. That means that every $1 invested from that time forward would now be worth almost $41.


Therefore, $200 million in 1982 would now be worth more than $8 billion.  Take taxes and living expenses out and you are very close to what Forbes says Trump is worth today.

Is Trump a business genius? Or does a good start (aided by his father), combined with compound returns, explain his success?

Despite the difference in wealth between the rich man and poor man in the race for the Presidency this year, the two still share some similarities.

If elected, either would be the oldest person ever to assume the office of President. Sanders will be 75, Trump will be 70. Ronald Reagan was 69 when he first assumed office.

They both have been registered with various political parties over the years.

Trump has been a member of the Republican Party, Independence Party, Democratic Party and was officially unaffiliated for a number of years. He also began a campaign to gain the nomination  of the Reform Party for President in 2000 which he later abandoned.

Sanders first ran for public office as a member of the Liberty Union party. He was elected Mayor of Burlington as an Independent but always referred to himself as a Socialist. He has never run for a political office as a Democrat until his run for President.

Both have had multiple wives. Sanders is on his second wife. Trump is on his third.

Despite Bernie being a Socialist and Trump being considered a Capitalist, their campaigns seem to be similar enough that even Donald Trump could not tell them apart when Mika Brzezinski posed what turned out to be a trick question to Trump last week during a televise  Townhall on MSNBC. reports on the exchange.

“I wanted to describe a candidate to you,” she began. “The candidate is considered a political outsider by all the pundits. He’s tapping into the anger of the voters, delivers a populist message.”

“He believes everyone in the country should have healthcare, he advocates for hedge fund managers to pay higher taxes, he’s drawing thousands of people at his rallies and bringing in a lot of new voters to the political process, and he’s not beholden to any super PAC. Who am I describing?” she asked.

Trump took the bait on the trick question.

“You’re describing Donald Trump,” he said.

“Actually, I was describing Bernie Sanders,” Brzezinski said to laughter.

Rich Man. Poor Man.

It does not matter. Neither is right for this country.

And it is certainly no laughing matter for us if they ever sit in the Oval Office.

There is only one worse option and she is a Poor Woman ("dead broke" when she left The White House in 2000) who has now become a Rich Woman.

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