28 Oct Politics-Shmolitics!?

By Pasadena Private Lending President Mike McAdams

Pasadena Private Lending (PPL), as do all good businesses, try to maintain an even footing for positive client-relations when it comes to political issues. Given the amount of political news at the top of all our news feeds of late, and despite sensitivities of approaching the subject, this article will address politics in these polarized times. We will endeavor to stay neutral by starting with quotes with two oddly similar views from highly divergent sources.

“The Business of America is Business” is a quote attributed to President Calvin Coolidge, about as Republican a view as it might get. And then there is, “It’s the economy, stupid,” a pointed campaign slogan for Bill Clinton’s unseating of George H.W. Bush. Either way, from these quotes at least, politics may be seen as economics and vice versa.

It is equally hard to isolate politics from economics and investment markets at present. Government shutdowns reduce pressures on the federal budget but cut consumer spending (presumably by countless government employees). Tariffs increase federal revenues but raise costs to businesses and consumers. High interest rates impact the cost of the national debt as well as savings rates and mortgage rates impacting home affordability in divergent ways. Even immigration has an economic side as the cost of illegal immigration vs. the benefits of lower cost workers to construction and agriculture industries is an ongoing debate. Tax policy for electric vehicles interacts with environmental policies and issues from rare earth minerals to oil drilling.

The U.S. rush for AI supremacy with Federal monies to support its advancement, as critical as it may be for many national priorities, also bolsters share prices for the direct AI participant firms and all those in the indirect AI community. But in doing so, that intense focus sucked wind from the sails (and prices) of non-AI/non-tech stocks that make up the bulk of the S&P 500 for more diversified, index investors?

Whatever your political stripes, most economists agree that business decision makers are not fond of uncertainty. And academics tell us decisions get made based on assessments of likely outcomes. In the absence of likely outcomes, often investment decisions are postponed, decreasing short run economic activity.

To that point, I turn your attention to a portion of a survey by the National Small Business Association from May of this year; that is, even before the last few months of heightened political turmoil. The survey of thousands of US small business owners said that economic uncertainty and US political instability were their two most major concerns. Considering today’s business challenges, that is actually an unexpected finding. And, even if business owners might be more inclined to be conservative-leaning, which may or may not be true, they may not all be Trump/MAGA supporters and could be old-school Republicans or Libertarians who have their own gripes with the current administration. Either way, business owners of all stripes are trying to pay their bills and employees and make a few bucks and look for ways to grow… if the time and opportunities are right. And if they are not confident, politics becomes economics.

So, from a practical, business “first-above-all” position, I want to end this piece by quoting the social philosopher, Rodney King, who in the middle of the 1992 LA riots said, “Why can’t we all just get along?” Those words may have new application to the reality that forward economic momentum may be impacted in 2026 if both Democrats and Republicans do not find ways to resolve the maze of impasses driving uncertainty and potentially slowing investment. Until then, we all may have to continue to wonder whether politics itself will be the only certainty amongst the multitude of conflicting investment cross winds.