COVID vs. Capitalism

Lewisburg, PA – COVID crisis! Is it the end of life as we known it? Is there really going to be a ”new normal” moving forward? My guess would be a resounding NO!

I’m occasionally accused of being too optimistic, some might say Pollyanna. I submit to you that it’s easy to be optimistic when you’ve studied (a hobby of focus for decades now) the human condition! Understand we are dealing with only seven emotions, fear being one of the most controlling. I’ve said it before with previous blogs and conversations and I will say it again, this is nothing new!

How we’ve reacted to it politically, socially, and economically isn’t really anything new either upon final analysis. We have been down this road before, different versions of fearful horizons. We have always had a tendency to overreact and then gradually come back to center. It’s been our history for over 250 years. It was our history in Europe, along with Africa’s and Asia’s history as well! It is human history.

Those that win based on these fearful events in history; the bureaucrats, nurtured by our tax revenue with their insatiable need for power and control. The media, with their constant need to sell advertising time, professionally producing sensational outlandish reports laden with false comments with a void of any journalistic integrity. I submit to you it is across-the-board, there’s not a journalist out there that is immune. How can I say that with such confidence and fervency? I have studied and understand the human condition. Self-preservation dictates that these people act the way they do. By the way, it’s not to any American investor and/or regular individual’s best interest to be associated with any of these folks other than what is functionally needed to survive. The worst of it are our leaders, politicians, and parties that are trying to scare the life out of us with their hypocritical, one side, propaganda machines. All of them, at every level!

With that being said…..I submit to you there’s not a shred of evidence to support a “new normal”. There’s a lot of hype, opinion, conjecture, assumptions, and worst of it, fear laden gossip. Very little facts have been put out there, left, right, or center. Much like an onion, a shell of truth stuffed with lies. What’s become of all of it? Not a solution for COVID, but rather a test for capitalism!?

In times like these, what is able to absorb the global fear through innovation, technology, and rapid discoveries in medicine and science?

In times like these, what is able to absorb the global fear through innovation, technology, and rapid discoveries in medicine and science?

Capitalism! What Adam Smith, a good friend of Benjamin Franklin, referred to as the “invisible hand”.  The free market, private property, and capitalism have always been part of what makes America great. They are part of the freedom and individual liberties that the founding fathers sought to protect when they wrote our Bill of Rights. It is because of these freedoms that Americans have been able to create some of the greatest inventions in history, creating the most successful businesses in the world, and benefiting all Americans by providing them with jobs and great products. Americans’ high standard of living is one of the reasons America is a great place to call home.

In capitalism, people own property not the government, consumers are able to earn money by working and are able to spend their money on goods they need or want. They can also put their money to work by making investments in businesses or even start a business. The best part of capitalism is that you make the decisions, the government doesn’t get to decide for you. Other systems like socialism, the government controls everything and makes each decision.

The one area that has made the COVID crisis different than any other historical event is the amount of control the government has exercised. Many would say they’ve crossed the line constitutionally. Americans, the vast majority, were happy to comply, altering their entire lives. We actually handed over to the government more control than ever historically in the past. We all became our brother’s keeper, so to speak, for the benefit of those most vulnerable. As the data clearly shows those being our cherished elderly.

We are starting to see the rest of the story as the data compiles. That is, if you can get the honest scoop anywhere, again self-preservation has come into play. We are starting to see some of that “free government money” that’s being passed out and the different institutions that are getting their numbers in line to take advantage. Numerous states are trying to get on the gravy train as well it seems. In that regard we have what we might call a ”new normal”.

The underlying reality is that we all partake in free market capitalism. Whether it be through being employed, owning a business, or retired and reaping the fruits of your contributions through the years. It is to no one‘s best interest to see anything that would alter the well-being of what Americans have worked for their entire lives, especially the elderly.

My point, this is nothing new because the human condition is nothing new. I submit to you in a relatively short period of time this will be a memory, it will have very little if any residual effects. Much like we saw with 9/11 and so many other major events in our incredibly rich, as well jaded history.

Capitalism always has and capitalism always will prevail! Why? Because it is most in line with the human condition, self-preservation being a paramount desire. Remember the three rules of prudent investing own equities/stocks, diversify, and rebalance. This too shall pass!

About Paul Nichols

Paul is the founder of Financial Abundance, a Registered Investor Advisory firm and EDI, an Estate Planning Firm with offices in State College and Lewisburg. He has been working with individuals, families and businesses for over twenty years, including many Fortune 500 companies. He has educated tens of thousands of people through seminars, workshops and various international speaking engagements where he shared the stage with many notable individuals such as Ronald Reagan, Robert Kiyosaki (author of Rich Dad, Poor Dad), Mike Ditka, General Schwarzkopf, and Newt Gingrich to name a few.

In 2000, after many years of traveling to consult companies and individuals, Paul decided to relocate from Colorado to State College, PA (his wife’s hometown) to develop a local advisory firm.

Paul operates under the core belief that education plus understanding leads to clarity and confidence; resulting in peace of mind. He is a proud father of three and devoted husband of 20 plus years.

Some of Paul’s accomplishments:
Regular contributor to the Centre Daily Times, via the “It’s Your Money” blog
Featured in the movie Navigating the Fog of Investing
Regular contributor to Town & Gown as the publications Investor Coach
Host of the weekly iTunes Podcast, It’s Your Money
Member of the Western PA Better Business Bureau
Member of the Centre County Chamber of Business and Industry