How Incumbents Stay in Power – And Why You Can Benefit

[Inside Wall Street with Nomi Prins]( Welcome to Inside Wall Street with Nomi Prins! It’s the only daily newsletter featuring the insights of renowned author and former Wall Street insider, Nomi Prins. Every day, Nomi shines a light on a massive wealth transfer she calls The Great Distortion. That’s the true cause of the permanent disconnect she sees between the markets and the real economy. And she shares ways you can come out ahead, if you know where the money is flowing. You’ll find all Nomi’s Inside Wall Street issues [here](. If you have questions or comments, send Nomi a note anytime [here]( or at feedback@rogueeconomics.com. How Incumbents Stay in Power – And Why You Can Benefit By Nomi Prins, Editor, Inside Wall Street with Nomi Prins [Yesterday]( I wrote to you about the topic of congressional term limits – an issue many readers have been curious about. I explored the history of term limits, why our Founding Fathers rejected the idea, and what the process of imposing term limits would legally look like. Today, I promised I would delve into how term limits are all about the money. That’s because congressional incumbents stay in power due to the money and corporations backing them… and if you keep your eyes on where this money is originating from, you can have a pretty good idea of which companies will be the government’s winners this year. But first, let’s take a look at recent efforts to implement term limits for Congress… Recommended Link [Can you retire when you want?]( [image]( Would it take a miracle for you to be able to retire? Nearly half of the entire country says it would. That’s why Master Trader Jeff Clark wants to show you his “One Stock Retirement” strategy today. And he gives you the name and ticker of the ONE stock, along with a real demonstration of his entire strategy. You could make more money in a single week than most folks make in 20 years in the market…Even when most stocks are falling apart. [Watch his video demo here.]( -- Efforts to Impose Limits Are Still Happening In the past two years, there have been moves to institute term limits on Capitol Hill. In January 2021, Senators Ted Cruz (R-TX), Marco Rubio (R-FL), and Mike Lee (R-UT) introduced a bill calling for a constitutional amendment to limit senators to two six-year terms and House members to three two-year terms. Cruz previously spearheaded term limit amendments in the 2017 and 2019 sessions of Congress. But none of those bills got very far. [Featured: Bear Market Expert Reveals His #1 Stock for 2023]( And just over a week ago, on January 23, Senator Cruz re-introduced the latest version of that bill into the Senate. Representative Ralph Norman (R-SC) did the same in the House. As Cruz stated: Term limits are critical to fixing what’s wrong with Washington, D.C. The Founding Fathers envisioned a government of citizen legislators who would serve for a few years and return home, not a government run by a small group of special interests and lifelong, permanently entrenched politicians who prey upon the brokenness of Washington to govern in a manner that is totally unaccountable to the American people. Recommended Link [Your money is NOT safe…]( [image]( You’ll want to pay close attention... Something odd is going on with our money. People who don’t understand what’s going on could suffer immensely in the months ahead. But if you understand what’s happening right now, and make the right moves, you could come out far ahead. This could be the most important story in the financial world in 2023… [Click here to see what it means for your money.]( -- How to Follow the Money While Senator Cruz’s words may or may not be entirely true, they highlight one thing: there’s big money involved behind-the-scenes. You see, the longer someone stays in power, the bigger the connections with corporations and special interest groups grow. And with them, so does the money. It takes time to establish relationships of quid pro quo, whether official or unofficial. You may be able to count on one hand the number of times the media recently made a big deal out of newcomers replacing an incumbent in the House or Senate elections. That’s because it’s a rare occurrence, and so it’s more dramatic. Less dramatic is what happens in most elections. The incumbent stays in office. For example, in the November 2022 midterm elections, Congressional incumbents held a 98% win rate. Why? Well, people know who incumbents are. Campaign and lobbying money know where they need to effectively write a check. Put the two together and you get a standard of politicians staying in office for long periods of time. [Featured: Nomi Prins: “What I said on Fox Business…”]( Consider the chart below. It shows just how high House re-election rates are as per data that OpenSecrets has collected: [Chart] As you can see, the re-election rates are pretty consistent – from 98.3% in 1998, 94.3% in 2008, 91% in 2018, and 94.5% in 2022. It’s the same for the Senate, as this second chart shows. [Chart] While big swings in the national mood can sometimes affect Senate re-elections more than the House, this doesn’t happen often. From 89.7% in 1998, 83.3% in 2008, 84.4% in 2018, to 100% in 2022, it’s evident long-term office holders are still highly favored. Recommended Link [Discover how to profit from fast-growing companies formerly off-limits to the average investor]( [image]( Until now, the fastest-growing companies in America have been off-limits to the average investor. But after discovering 77% of these fast-growing companies come from just one tiny sector of the economy, Brad Thomas, former real estate mogul turned investor, discovered a back-door strategy to profit from them all. All it takes is one ticker to collect $3,173 a month, depending on your investment size. And if you haven’t heard about them yet… [Watch his latest video here now.]( -- There’s one other factor that allows for incumbent re-election victories: political action committees (PACs). PACs are entities that collect corporate and large donor contributions into one spot then decide where that aggregate money goes – meaning… to whom. Their plan is to get the biggest bang for their buck. And they do that by giving the lion’s share of their dollars to incumbents. That's because they get a surefire bet, with congressional re-election rates around 90%. And it’s not just corporations but labor groups that heavily give to incumbents, too, at $41 million. The only group that tends to bet on political newbies is a single-issue one, and even when compared to the money spent to re-elect politicians ($65 million), this still makes up a small fraction ($16 million). As you can see here, a large proportion of PAC money comes from Wall Street (as represented by the finance, insurance and real estate, or FIRE, line), at $69 million. Next up is the health sector, at $43 million. [Chart] Putting all of this together, I can only draw one conclusion. Term limits won’t be coming to Washington any time soon. There’s too much money and contributions at stake, especially from big sectors that’ve gotten comfortable with their favorite legislators. And for that reason, when the government picks winners and losers in terms of contracts, funding, and favorable legislation, the investment money not only follows how Washington spends money… but a lot of the money was there all along. Regards, [signature] Nomi Prins Editor, Inside Wall Street with Nomi Prins P.S. No matter who’s in power, or who gets to be re-elected, the gap between those in power and regular folks keeps widening. And with it, there’s a great wealth transfer worth $150 trillion occurring in the markets, or what I call “The Great Distortion.” To find out how to position yourself on the right side of this shift, [go here](. --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=Inside Wall Street Feedback). --------------------------------------------------------------- MAILBAG Readers share their strong opinions after [yesterday’s piece about congressional term limits]( Some think term limits will never happen… while others think perhaps there is another solution. As I see it, for term limits to occur, it would require being voted upon by the same people it would affect. The killer bottom consideration here is that very few (in my opinion, none) of them would ever vote themselves out of a job. – Carl N. With respect to term limits, the first thing you have to ask yourself is… Do we truly believe that changing everyone after their term limits is in the best interest of running a trillion-dollar enterprise? We are assuming that every elected official brings the same amount of knowledge and vision to run our government the same way… Will they have the historical knowledge besides reading about past issues and possible solutions to be efficient? So, I think the first thing is to pull up the studies of cities and state governments that have implemented term limits and see how successful they have been in running their cities and state governments. I live in California in the city of San Diego, where having both the state and local government implement term limits has been good and bad for the citizens of California. We have gotten rid of the bad apples. But we have also brought the concept of each political party picking who will run for higher office once the terms have expired with no knowledge of the critical issues or possible solutions for the new position. They are running on name recognition only, not on experience for the new position or the ability to even handle the upward responsibilities associated with the office. Maybe we need to come up with a better way to judge or train our future political leaders to have business and government experience prior to running for elected office. – Curtis M. Term limits for Congress should be put in place, but the best way to clean up our political system is to prohibit private money from any source to be spent on federal elections. Let the government provide identical resources for candidates and the best ideas should triumph. Professional lobbying should be made illegal. Why should billionaires and PAC money run our political system to the exclusion of normal, sensible people? – Ken C. It doesn’t take more than two terms to learn how things work. – Richard S. Do you agree with Carl that congresspeople would not vote themselves out of their positions? What do you think about the recent efforts and proposals for term limits? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… [Market Wizard Larry Benedict revealing his best-kept secret for just $19]( Market Wizard Larry Benedict went 20 years on Wall Street without a single losing year… He delivered 23% returns in 2008 (while the market plummeted 37%)… And last year, he showed his readers how to make money nearly every week. For a limited time, he’s revealing his best-kept secret for just $19. This is the best deal he’s ever offered for his research service… and it could disappear at any time. Plus, he’s even offering a 10-second “over the shoulder” demo of his strategy in action. 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