Trade the Congressional Effect: How To Profit from Congress's Impact on the Stock Market

The Cumulative Effect of Unintended Consequences is Congressional Wealth Destruction

Why do I think the government has no clue about all the unintended consequences of its uncoordinated activities? Because the actual motive of people in government is to expand the power of the government, which each administrator measures in the size of their department, not to help the private sector. They do not have their own money at stake, so they can be very unconcerned and incoherent about the outcomes. From what I have seen, Fed Chairman Bernanke takes his job quite seriously, but even he was caught utterly speechless when JP Morgan Chase CEO Jamie Dimon asked him “whether anyone had considered the cumulative impact of all these regulations.”⁹ If the Fed Chairman cannot tell what the impact of all these regulations is going to be, how is the average citizen supposed to figure it out?

We have reached a point where the out-of-pocket costs to comply with new regulations is likely exceeded by the wealth destroyed by Congress as reflected in lower stock market prices. Earlier in the book we described the many different times that Congress considered laws, considered issues, and on a structural basis just had their own basic job description that drove them to do some things that were utterly dysfunctional. We have seen how each industry is depressed while Congress goes through a consideration of what additional regulations need to be implemented or threatened as a means of extorting and seeking ...