The Rear View Mirror and the Windshield

2016 in Review and 2017 Predictions

The year 2016, the year of the new political wrangling! When I asked friends and clients what they remember most about 2016, the most frequent answer was they hoped they would never endure another election cycle like this one. The predictions made by the different polling surveys turned out to be all incorrect. In any case we turned up with a new President Elect. Most people who make their predictions about the coming year do just as well as the pollsters. My big thing is that I lived long enough to see the end of “Pokémon-Go” and never ran over one in the parking lot during the big craze faze!!! “Pink Slime” no longer makes the news and “Deflate Gate” is passe’.

The things that I am sure of for the coming year – The news will report that there is a fire somewhere in
California, snow in the northeast that threatens over 15,000,000 people, floods along the Mississippi River, drought in Wyoming and the Dakotas, lone wolf terrorists, 25 or 30 murders in Chicago over a weekend, “global warming, cooling….Climate Change….” , average temperature increase by .005 degrees this last decade, and on and on!! With more certainty, tax laws will change, (before you go yeah) be careful what you pray for because you may get it. Lowering tax rate comes with a million other changes, maybe like no interest deductions, no 1031 exchanges, allowable expenses etc. The tax reform act of 1986 promised many things, like simplifying the tax code. Like the Health Care Bill, you had to pass it in order to read it. It went from 1,800 pages to like 10,000 pages. How is that for simple? We had the ACRS (Accelerated Cost Recovery System) and buyers for commercial property would overpay for an income producing building because they could write off the excess depreciation against their ordinary income which was taxed as high as 90%. Tax reform act eliminated the ACRS and then there was no reason to own a shopping center or other commercial real estate unless you just want to take verbal abuse from testy tenants. This is also what started the S&L crisis and took down most of the Savings and Loans across the country.

Our politicians do not use any common sense or logic when drafting these new changes and what the unintended consequences of their good idea.They leave it to economists to tell them what to do. I am convinced that the main reason we have “Weathermen” on the news is just make the economists look good.

Most people will give up too early. Failure is an absolute essential to life and success.

Fear will be the number one thing to cause many to not move forward with anything. Embrace your fear, if you are not 100% comfortable doing something, then you are not challenging yourself and will flat line before you know it. Learn how to follow the money no matter what the changes come down the road.

Interest rates will fluctuate. The Dow Jones will move up and down. The sun will come up each day (unless you live to far north or to far south). Birds will fly south in the winter time. The prairie dog will not become extinct. The wolf needs no further introduction. There will always be a need for people that know how to drive, even if it is to program the car.

Winners will emerge and survive by being adaptable to whatever the politicians do and what is happening in your market. Learn how to THINK like a bank. Remember, half of the people that you know are below average.

A government which robs Peter to pay Paul, can always count on the support of Paul.George Bernard Shaw