Jessica Gibbs (Co-Host): So, we’re doing something a little atypical today at “Off the Wall.”
David B. Armstrong (Co-Host): It is definitely atypical. It is a trigger warning upfront before the episode begins.
Jessica Gibbs (Co-Host): Usually we like to talk about wealth planning issues, things that are relevant, and things that we have experienced talking with clients about. As a planner, I talk a lot about tax planning, for instance, retirement planning, and when you should start taking your RMD (Required Minimum Distribution). All of that is determined by legislation, and who decides what the legislation is? It’s politicians! Our episode today features Reince Priebus, who is a supporter and promoter of Republicans. And he will share his views on what has been happening in the elections and the Republican Party because it all kind of falls under the same umbrella. For example, when Republicans were in control of Congress and the White House, they passed the Tax Cuts and Jobs Act of 2017. This transformed what people’s taxes were and how much they paid. It makes sense for us to look at what’s happening in politics, and how it’s going to affect the everyday person, both within wealth planning and in many other areas.
David B. Armstrong (Co-Host): One other thing is that a lot of the advice we give in wealth planning is based on listening to opinions and analyzing issues, using those points, and counterpointing multiple opinions to synthesize our own advice and opinion. And that’s one of the things we talk about at Monument all the time. We are all about straightforward, unfiltered opinions, and advice, and that’s our value proposition and differentiator. Nobody can imitate our advice in our opinion, no matter how hard they try. So, in the context of gathering information, listening to things, and forming an opinion, we thought that this would be a really interesting episode to get somebody’s opinion. Everyone’s an adult and can do with this information and opinion as they see fit, so half the people listening may agree with it and half the people listening may disagree with it. Despite this, we try to listen to all sides and are aware of our own confirmation bias. As you said, politics drives so much of what happens in this country so we thought this would be an interesting episode. So with that, let’s go ahead and cut over to the episode.
David B. Armstrong (Co-Host): Welcome to “Off the Wall” today. We have a great guest, Jessica here. Nice to see you live in the studio again!
Jessica Gibbs (Co-Host): Yes, we are back at the studio.
David B. Armstrong (Co-Host): Tell everyone about our guests; it’s a pretty exciting episode. Before you introduce the guest, let me just mention that Monument Wealth always has a neutral viewpoint, but we also put a lot of effort into making sure we hear both sides of the issue. We thought it would be incredibly fascinating to conduct a few interviews with folks who could talk about what is happening in politics and what has happened as a result of the midterm elections because it is Washington, DC. And now we have a great guest who will discuss that with us.
Jessica Gibbs (Co-Host): Politics is always fun to talk about. Everyone seems to like it, but I believe that when it comes to, particularly for our clients, this is where politics and the law collide. People’s lives and fortunes are being impacted by tax policies and other factors. With that in mind, our guest today is Reince Priebus. Almost everyone who is listening to this has probably heard of him.
Reince Priebus (Guest): If they can’t pronounce it; that’s a different issue.
David B. Armstrong (Co-Host): I was told to think about it as pints. Pints/Reince.
Reince Priebus (Guest): That’s perfect! Never miss a lesson.
Jessica Gibbs (Co-Host): Reince was the former White House Chief of Staff for President Trump, and he also served as chairman of the Republican National Committee from 2011 to 2017. So, welcome Reince!
Reince Priebus (Guest): It’s a pleasure to be on the program with you guys today, and I’m excited to be back in Alexandria. You have a point when you mention Washington, D.C.’s politics and pastimes; indeed, the political climate there is currently the wild, probably the wildest in modern history. So, here we are.
David B. Armstrong (Co-Host): We purposely did this after Thanksgiving so it wouldn’t cause any arguments at the Thanksgiving table. But it is always really interesting to hear people’s perspectives because I’m just going to rough it out here. But half the country is Democrat and half the country’s Republican. So one side doesn’t agree with the other a lot. But I think listening to different sides and understanding what’s happening and learning some inside baseball and things like that. It’s interesting. So I’m excited to hear what you have to say on some political stuff.
Reince Priebus (Guest): You bet!
Jessica Gibbs (Co-Host): Imagine we’re sitting around the dinner table discussing what happened in the midterm elections in 2022. What are your thoughts?
Reince Priebus (Guest): I think it is complex, like most things in life, and you’re right, David. It’s no secret that we live in a political era with very little middle ground left. What I mean by that is, in 1976, 36% of the American public identified as independent, and those 36% were not leaning toward either Republicans or Democrats; rather, they were really independent. That percentage is now 9%, and because of this, only 9% of the general population is actually in play. You are calculating how you will cut and slice that 9%.
The party that can micro-target voters and gets a turnout of 9% will ultimately win these elections. District toss-ups are extremely rare in the United States, nowadays. To generalize for those who are listening, consider it this way: There are probably 5% or less of all congressional districts in the United States that are in the play. Consider this: In the most divisive political climate in modern history, you have a 95% chance of winning if you run for office today in Congress, a state legislature somewhere in Pennsylvania, or Wisconsin. This means that if you stick to your talking points and base messaging, you’ll have a better chance of winning the reelection and waking up tomorrow.
So what happened? I think a couple of things happened. Number one, I think the Democrats did a good job of using wedge issues to turn around that small portion of the vote. They swamped Republicans in university towns and blue counties across America. Getting less than 30% of the vote in places like Madison, Wisconsin, California, and New York, and counties all over the country can no longer be acceptable for the Republican party. In a state like Wisconsin, where 20,000 votes determine the outcome, getting swamped in those little university towns means you can’t win. And we just drill it down another way. Look at what’s happening in a state like Wisconsin, and you can put in Michigan, you can put in Pennsylvania, the same thing. The candidates for a Senate seat in Wisconsin raised and spent over $100 million combined. The candidates for governor in Wisconsin raised and spent over $100 million.
In other words, you’ve got $200 million, which was more than that, to fight over 50,000 votes, and polls are coming in showing how 50,000 people will respond when you drop $200 million on them. We’re not just messaging guns pro-life on their doors; we’re micro-targeting 50,000 people with everything we know about them. We know what beer they drink, what car they drive, and how many kids they have. In your micro-messaging, you take $200 million and turn them into your voters. The Democrats did a good job of finding people who were very upset over abortion. The Democrats did a good job raising money. Lastly, I think the American people have glazed over the vitriolic, negative nastiness that has taken over our politics, and we can address these topics later.
I agree that we’re on the wrong track. It’s true that Joe Biden is leading this country in the wrong direction, but I don’t agree that all those horrible things you say should be attributed to someone running for governor in Wisconsin, Michigan, or wherever. So this glazed-over feeling that this country is having concerning our politics has affected the 2022 midterm election in a very profound way.
Jessica Gibbs (Co-Host): So what happened to the red wave that people predicted coming into the midterms?
Reince Priebus (Guest): I believe that many of those factors made it possible for us to examine previous elections to see how citizens felt about the nation in 1994 or 2010. People were held accountable, the party that wasn’t in power, and mainly, those not in power for how they felt about where the country was going. But in this case, I think people felt like our politics were so poisonous, people were not sure what to believe when it came to what they were being told on TV.
University towns, finding 1000 people to find ten people who are upset about the Supreme Court’s ruling on dogs, swamping the Republican Party in a way that they have never seen before, losing 180,000 votes in Dane County and you can substitute any big university town in America. They did an excellent job. That 30,000 vote margin in one county alone makes a huge difference when you’re only dealing with about 25,000 to 50,000 voters. That’s what our politics really come down to, which is why I started the conversation with the idea that very few people in America are deciding elections for everyone else because the majority has already chosen who to vote for. They’re not in play. They’ve decided they’re off the radar. They’re not the people, the party is worried about. That’s what’s happening.
David B. Armstrong (Co-Host): But if it’s so obvious that’s what’s taking place. Only 9% of the population will have any impact on the decision, either way. I suppose part of that has to do with gerrymandering, a subject I don’t want to discuss. But if you can only persuade 9% of voters to change their minds, where does that leave the Republican Party as a platform? In other words, what people thought was going to happen in the election didn’t materialize to the level of the house wins they expected. In November, if 9% of voters resonated with what the Democrats were saying, where does the Republican Party begin to change its messaging to capture their attention?
Reince Priebus (Guest): Generally, I think both parties have started to figure that out. I also think the American people are tired of hating each other.
David B. Armstrong (Co-Host): I agree.
Reince Priebus (Guest): I believe that the American people are sick of having 11 Senate contests going on simultaneously throughout the country. Even if it looks like every race has to pick between a right-wing extremist or an anti-American socialist, it’s possible that there are two people who both love America and disagree with one another. And once more, we must argue why a certain candidate will be a great American representative in Washington D.C. on the basis of principles and policies.
Jessica Gibbs (Co-Host): Is there a way to change our politics away from this?
Reince Priebus (Guest): I think it will be difficult because there’s another factor in play. There are a few things going on in the media nowadays. Unfortunately, I don’t have it with me, but I can get it if I have a minute. I took a picture of a poll that was on TV a couple of weeks before the election.
David B. Armstrong (Co-Host): Send it after the podcast, and we’ll post it on our website.
Reince Priebus (Guest): Okay. The poll showed when Americans were asked why do you think our politics have become so terrible? Number one was social media. Number two was just the media in general. Firstly, in America today, you can believe what you want to believe, but on top of that, you can be fed whatever you want to believe based on whatever social media, app star, whatever you want to watch and listen to will feed whatever you want to believe.
David B. Armstrong (Co-Host): Yes, our clients are very familiar with that because we always talk about confirmation bias, when you go out and seek out information that confirms your initial bias anyway, so you’re right. And social media does that automatically for you based on what you have already said you like and dislike.
Reince Priebus (Guest): And on top of it, in America, it is believed that “Division is profit, unity is a loser.” There is no money in unity. You do not see a split screen on CNN or MSNBC or any channel. The unifying message is division. It’s rare for people to write a book about the Republican Party that includes everything it’s great at. Instead, the title would be, “This a list of the 10 worst things about the party, and here’s what I think needs to be done to fix it.” If you look at those who wrote books after leaving the White House, the books that sell are not those that talk about the great things that happened here; the books that sell are the ones that dish all the dirt, that sell all the horrible stories, because division is profit, and unity is a loser. We’re up against an enormous business model that is very difficult to overcome.
David B. Armstrong (Co-Host): Since I watched Mister Rogers as a child, I haven’t seen anything unifying on television. Do you remember that show?
Reince Priebus (Guest): Yes, of course. I was just thinking about it.
David B. Armstrong (Co-Host): That’s a great point about family-friendly unity. I think you’re right. I believe there is just a significant amount of division, and it all has to do with profitability. But I do think that the biggest change, whether it be in politics or anything else, always appears to occur when the pendulum is at the absolute top of its swing. I know you’re going to wish it’s a Republican, but any party could come up and say, “I realize there’s this 9% middle, but I believe that there’s a 50% middle, they just picked aside, but they’re probably sensible people.” Could a candidate who stands up in this country and says, “I will run for president on a unifying platform, and I will concentrate on what is important for the progress of this country, regardless of party, resonate with enough Americans to win the White House as a middle-center candidate?”
Reince Priebus (Guest): They do! And not to be argumentative, but I think it’s important to note that successful candidates run on issues that are generally supported by 70% of the American population. Compared to George Bush and Barack Obama in 2008, neither of them talked divisively, and neither of them talked about issues that Republican voters worry about, such as socialized medicine. While Donald Trump represented frustration for America in 2016, he believed that he was very clever, and he was, by the way. I get asked all the time; what is America First? There are three things that I think 80% of your listeners would agree with if I explained them to you and your listeners. First, confront China, which is ripping off the world. Second, build a border and protect the American worker. Third, stop endless wars and bring back our soldiers. To me, these are the clear winners. According to the analysis of Donald Trump, his message is America First, confronting people who are ripping us off, protecting the American worker, bringing steel and aluminum back, paying people more, and restoring the industrial sector. It’s a very proud, pro-American message. Therefore, my point to you is that those are the messages that will work if you want to be successful. When we get into midterms and start slicing and dicing the electorate, I think that’s the moment when communication with the American people starts to break down.
Jessica Gibbs (Co-Host): Speaking of Donald Trump, I’m curious to know your opinion on the direction you believe the Republican Party will follow. Because the Tea Party and other factions within the Republican Party have existed in the past, in my opinion. Donald Trump has declared his intention to run for president, although many of the candidates he supported in the midterm elections for some of the more prominent contests did not end up winning. I’m interested to know if you believe the Republican Party will still have a Trump-supporting element or if it is distancing itself from him. Where do you see the Republican Party going?
Reince Priebus (Guest): Other than the fact that President Trump will run since he has already announced and is, theoretically, 20 to 25 points ahead of everyone else, I have no idea where or who will run for president. However, I do believe that we will have a primary and moderately sized debate in the party about your point. From there, we’ll see how things develop. I believe that the bigger concern is whether America First’s policies will remain in place. I think they are; they’re very popular with the American people. Those three things that I just listed are not going away. Depending on when this podcast is broadcast, I would say that one of the more perplexing recent events was Joe Biden’s White House yesterday’s refusal to show support for the protesters in China. I know you work with a lot of businesses and individuals, but the fact that he didn’t stand up for those protesters threw both Democrats and Republicans for a loop. You would expect that a president would order his people to confront the CCP.
Any American president who should defend freedom, opportunity, and democratic principles would thank the demonstrators who are exercising their right to free speech by acting as his or her spokesperson. My point in going down this rabbit hole is that, despite our conversation, I participate in events across the nation with Democrats in front of business executives, major corporations, and academic institutions, and I’m astounded by the fact that our only point of agreement is Taiwan as a tributary of China. And the fact that the President would not condemn the CCP was baffling to me. My point in all this is that these issues aren’t going anywhere. I think that if you’re investing in China, if you have a business, and you’re listening to this right now, and you’ve got an office in China, and you’re making something in China, it will be cheaper, and you can work it out better and import it somewhere else, which eventually gets back to the United States. In order to bring these activities back to the United States, perhaps to Mexico, perhaps other countries that are more friendly to the United States, there is going to be a war. But I would advise anyone listening to this, that if you’re investing in China, there’s one thing that Republicans and Democrats agree on generally, and that’s China; it is a losing long-term proposition.
David B. Armstrong (Co-Host): And the military agrees with you too not just Republicans and democrats. It’s an interesting thing. I could pick a couple of things. I’ll just pick one as an example because you talked about the three defining aspects that 80% agree with. And the border was one of the things that came up. But it seemed to me that if 80% of Americans agree that strong borders are a priority, there was a huge component of the American population that voted against that in the 2020 election. What is it that drives a voter to say, even though I agree with that, I’m not going to vote for the person who stands up for that? As an alternative, what prevented Joe Biden from saying, “Yeah, I’m all for a strong border, too?”?
Reince Priebus (Guest): But that’s what Joe Biden did. Biden’s policies weren’t in play in 2020. He stood up in front of discussions and declared that he wanted to protect the border. ” Yes, I’ll watch over the border. In 2006, or whenever it was, I voted in favor of the border barrier and did this and that”. And he said the things he needed to say, to blunt those issues in 2020. In 2022, that’s not a problem if you’re running for governor of Wisconsin. In Sheboygan, Wisconsin, you might want to secure the border, but you might not think the governor of Wisconsin will have much say about how they feel about the border, how much I’m paying for gas, or how much inflation is going to affect me. A lot of those national issues didn’t come into play in 2022. I’m not suggesting that those will be the issues of 2024, maybe some of them will be. To win elections, you must appeal to that 70% of issues, that will move the American people, which I believe is the point of that conversation. I think Joe Biden is will have a hard time winning, if 80% of American people think that we’re on the wrong track.
David B. Armstrong (Co-Host): Perhaps, but also in November it seemed like there would be an easy win.
Reince Priebus (Guest): I don’t want to repeat myself, but that’s the difference between running against the person most directly responsible for my inflation, my gas, and my grocery budget.
David B. Armstrong (Co-Host): That’s a great point.
Reince Priebus (Guest): And the person running for governor in Idaho; it just doesn’t compute.
David B. Armstrong (Co-Host): Every time we come up around an election, you’ll hear people saying, “Oh if this candidate wins, I’m moving to Canada.” We hear this all the time. I’m moving to Canada, but nobody has ever done it.
Reince Priebus (Guest): We love Canada!
David B. Armstrong (Co-Host): Of course! I think it would be a lovely place to live. In our industry, we fight a version of that battle too. They always say, ” If this politician wins, I’m selling all of my investments and we’re moving to Canada instead because I believe the world will end horribly and go to hell.” The stock market, which is virtually unbeatable over a long period of time, I like to say, although it doesn’t seem that way today. But, we always advise clients not to allow their personal feelings about politics to influence their investing decisions. As we battle that version of Move to Canada syndrome, I’m going to ask you a question that might seem impossible, but I think you can answer it. In the next two years, while the house is just changing, what is on the Republican legislative agenda?
Reince Priebus (Guest): Given that we have a Democrat Senate and a Democrat President, not much is going to get done in Washington D.C.
Jessica Gibbs (Co-Host): So, your opinion is that democratic government is just going to be a deadlock?
Reince Priebus (Guest): Yes. But divided governments are great.
David B. Armstrong (Co-Host): It’s statistically good for the stock market.
Reince Priebus (Guest): You also consider how the Constitution addresses faction. This is precisely why our founding fathers valued faction and the stability it brings to the country. In American politics, there is always a ping-pong match between the Democrats and Republicans, which creates instability. I would like to have complete control over the situation because I believe it is better to have fewer taxes, less regulation, and energy independence. I think it’s better to be strong overseas, fund our military, and pay our men and women in uniform a salary that commensurate with what they do every day. I believe in all those things. But I also believe the idea that faction is a problem is incorrect. That, in my opinion, provides excellent stability. It is likely that Republicans will launch an effort, under the leadership of Kevin McCarthy, to demonstrate to the American people what it is that they believe in, whether it is taxes, regulations, oil and gas, crime, or any other issue we believe America faces today. All of these issues will be a part of a package he laid out in his plan prior to gaining control of the House. This will hopefully go beyond symbols, and it will give the American people a sense of what we could do if we had more authority in Washington D.C.
David B. Armstrong (Co-Host): So, we just said not much will get done. What actually could get done? How likely is it that we could get anything to the President’s desk over the next two years on some of the issues where there’s so much consensus? Is there anything?
Reince Priebus (Guest): One of those difficulties, in my opinion, is energy. I once truly believed that Joe Biden had some roots in being reasonable. I believe that part of the reason he got elected was that people believed he was rational despite being a Democrat. However, it turned out that he governed completely Fire Left. However, I believe that since there are some seeds of rationality there regarding energy and oil, perhaps something can be done. For the sake of some alleged climate concern, it makes no sense that we would buy oil and support more drilling in Venezuela but not in the United States. I mean, if you’re drilling in Venezuela, you can drill in the United States too. This will result in the same effect, as well as cheaper prices and a better job market in the United States. I think there are enough Democrats that agree with my basic comments on that particular subject. As long as the Democrats are ready to finance and build the border wall, which is not a radical idea, I believe a compromise on immigration could be made. Many of them agreed to this notion 15 years ago, but they still haven’t carried it out. If they want to deal with immigration and if we want to increase legal immigration, which is something that many companies and good Americans who want some of their family members to immigrate to the United States want, I’m talking about legal immigration. As with illegal immigration today, legal immigration is a bit of a muddle. But not funding a secure border impedes not getting anything done on that issue.
David B. Armstrong (Co-Host): Can I pitch you on my platform for my future presidential run on immigration? Here it is. America is open to immigration. Here are the conditions in which you can immigrate very quickly: You must come through a border control checkpoint. We will get all of your bio analysts. We will take a retinal scan, a DNA sample, your fingerprints, a picture, and some other things. We will issue you a social security card on the spot, and then you can come in and get a job. If you break the law, we will trace you down through your DNA, and if you’re proven a criminal, we will export you. And you’ll never be allowed back because we’ll have your DNA at the retinal scan. Why is it so hard to fix immigration? It just seems so easy to me.
Reince Priebus (Guest): It should be easy.
David B. Armstrong (Co-Host): By the way, I’m not running for president.
Reince Priebus (Guest): By the way, the United States did not have an issue with illegal immigration under Donald Trump’s presidency. We were also energy-independent. I know we’re starting to get into the big partisan discussion, but look at what Joe Biden did on day one. On day one, he issued six or nine executive orders related to immigration, one of which stated that we would stop building the wall. I say this because it is the truth. The first thing is that he has always opposed building the wall. The second action he took was to inform local governments across America that illegal immigrants in their cities must be included in the required census count. Why? You made sure to add those people to your account so that you would receive additional government funding. Thirdly, to get to your point and the focus of your combined campaign, Joe Biden issued an executive order on day one that revoked the rule that stated anyone in the country illegally who committed a crime would be deported. He revoked that rule. Therefore, if you enter the country illegally and commit a crime, you are no longer vulnerable to deportation.
David B. Armstrong (Co-Host): I just don’t understand that.
Reince Priebus (Guest): That’s just day one, and he was supposed to be the reasonable guy. The issue with our politics is that when you look at me and ask, “Reince, why can’t you guys work with these people?” it’s not always in an adversarial way. Well, to put it another way, it’s really challenging to work with someone who, on day one, signed those three executive orders. I apologize if I’m going down a rabbit hole. However, you make a valid argument regarding where Congress is at. So everyone, close your eyes if you’re not driving. And picture yourself in San Diego, which is a lovely location.
Jessica Gibbs (Co-Host): You are driving on the coast…
Reince Priebus (Guest): And one congressman, north of San Diego, has a seat that is 80% Republican; the next-door congressman represents a different area. Additionally, the district that Congressman represents is 80% Democratic. The media markets for both are similar. The same newspaper serves the same neighborhood. One individual mentions an 80-foot-tall, double-wide border barrier. And the other talks about the kids that are here through no fault of their own. Should we let them in? Their chances of being reelected and waking up the next day are higher since both of their constituents love them equally. Therefore, the issue we have is that you are asking why we can’t just cooperate and do this. We’ve got one party, that on day one is saying you will not get deported even if you committed a felony, how am I supposed to work with that? That’s a non-start, right? How can I manage that? Is border security a waste of time? How can I manage that?
David B. Armstrong (Co-Host): Perhaps that’s why you work with it as a party, not as a person. As a party, you work with the American people, who have the ultimate control over everything with their ability to vote. This is the scenario that we’re laying out to elect our party back to power and don’t even work with them. Work with the American people.
Reince Priebus (Guest): If I’m the guy in the 80%, Republican district, and I say, let’s just cut this deal on immigration, we’re not going to build a border wall. We’re not going to fix the things that you care about. But we are going to let everyone that’s here illegally vote and we’re going to give them amnesty. I’m out of a job. So the question is, is it my job to do what I want to do? Or is it my job to represent the district that reelects me 80% of the time? It’s complicated, but I do think that where the rubber meets the road is when Joe Biden needs to go back to the American people generally and defend the things that he’s done on immigration. And I don’t think he’s going to do well,
David B. Armstrong (Co-Host): Question just popped into my head. Can you help me understand why immigration is such a big deal and illegal immigration, I would assume that the biggest impact that it’s having is on the border states. Why are Democrats getting elected in border states if illegal immigration is such a problem in those states?
Reince Priebus (Guest): According to my theory, significant demographic shifts are occurring in states like Arizona, Nevada, and you may even detect some of them in Utah. And a lot of people, in my opinion, are leaving California. And there’s no denying that several of those states are undeniably turning a little bit bluer each year. I believe that to be accurate. But I also believe that during presidential years, like 2016, when the subject comes up and is hotly debated, Donald Trump won those states. As I have stated, Joe Biden ran in the past on the exact opposite platform from that of amnesty and a shaky border. However, he now has a record. Additionally, he will have to come back in 2024 and defend it.
Jessica Gibbs (Co-Host): So I think we have to leave it there. Thank you so much for coming, and giving us your valuable opinion. I really appreciate it.
Reince Priebus (Guest): I had a lot of fun here. So, I really appreciate it. And I’ll be happy to come back here again for a little update.
David B. Armstrong (Co-Host): Thanks, that would be great. We tell our clients that looking at information is always interesting, but never let it drive your decision-making process when it comes to your investment strategy. It’s always interesting to hear somebody’s perspective on something as interesting as politics, especially as nationally followed as politics is. And this has been fascinating. I appreciate you answering my questions from a person who’s just Joe Schmo on the street.
Reince Priebus (Guest): I also really appreciate it!