If you are involved in politics besides voting, but belonging to a party and being active in it, you will quickly realize that when you are in opposition you will not like something the party in power is doing. When tides shift as they often do, your party will be in power and they will have to govern. The first thing the party in power will do is to change the regulations they do not like. It does not matter if the regulations make the world better, the party in power does not like them and they will be changed. Eventually the party will have to govern and often later will deal with the consequences of changing the regulations.

The classic example is pollution laws or environmental laws. A plant makes a product, the plant generates jobs which is good for the local economy. The downsize is the plant’s process dumps garbage into the river which someone downstream has to drink. Overtime whatever is in the river gets into people, they get sick and sue the company. The company has to change the process but what about the people? If they have good lawyers, they find the company knew that someone was going to get sick and the company will need to pay compensation in the cost-benefit equation. Often times to pay compensation, companies will be reorganized to limit the overall effect to the company. What is better for the plant to produce the item or to produce the item and protect the environment? There have been many lawsuits in the past, and likely will be in the future.

In an article by Jarrett Renshaw and Chris Kirkham of Reuters, the Republican transition team is recommending sweeping changes to cut off support for electric vehicles and charging systems and to block lower cost electric vehicles from coming into the US from China according to documents seen by Reuters.

It is well known, President-elect Trump besides being friends with Elon Musk does not like electric cars or the charging systems need to ensure electric cars are run. He likes vehicles that run on fossil fuels and wants to promote them with the slogan Drill Baby Drill.

In the US, electric vehicles are expensive, although in China the cost can be less than $10,000. The more expensive vehicles have received a $7,500 tax credit for vehicle EV purchase, the Trump team wants to clean up the tax code and eliminate the deduction.

Linking to dividend paying stocks, all companies benefit from the government in power, sometimes it is easier to see and sometimes governments make it more difficult, but governments play a role. Sometimes regulations make it difficult to compete, which has the effect of helping existing companies, sometimes regulations allow in the competition, there is a balancing act. Governments will change as people change, as an investor you love stability to make profits.

There are more questions than answers, till the next time – to raising questions.