Despite high levels of polarization, financial markets love divided government. JT Taylor is back on the podcast to explain key policy areas in which the parties agree and disagree—and how this could impact markets this year.

Julie, I know that when we recorded our first podcast episode with JT Taylor, you weren't able to join us due to scheduling conflicts. And, uh, but I know that both of us were mark JT's episode last year is one of our favorites. And, uh, I was excited for you to get to meet jt, uh, in preparation for our podcast recording.

Absolutely. And I was so sad to have missed the first, but I think today he just changed my mindset in so many different ways. You know, I've always said I'm the least political person out there, and I think sometimes we get ourselves wrapped around politics in a way that isn't a productive mindset. And I'm just so excited because I think he's given me so many different productive ideas to consider as I go forward and really, you know, through the balance of this year and ultimately into next year and election year, which will be even more interesting.

You know, it's funny, Julie, over my 35 year career now, I've worked with professional money managers, primarily from Wellington Management Company and then from Schroders. What always kind of amazed me about them is that no matter where they stood politically as an individual, they were almost always able to park those emotions and opinions to look at markets rationally. And I think one of the things I took from our conversation with JT Taylor is the need to do that regardless of how we feel about certain things. Now, maybe some financial professionals are saying, no way, I can't do that. But in a sense, if you can separate your emotions from a rational assessment of that, what's actually going on, I think you can be a real resource to your clients.

I agree wholeheartedly and tune out those headlines. I think that was the other thing that I took from it. Just a very simple action item. So, well, today we have JT Taylor, who serves as senior policy Analyst at Hegi Potomac Research. Prior to joining Potomac Research Group, he ran Polars research, the US Public Markets division of holding him group based in the UK, JT has worked extensively in both government and business in Washington DC with experience that spans both the legislative and executive branches, as well as in a DC based consulting firm that he founded with Secretary Jack Kemp in 2002.

So, Julie, let's hear from JT Taylor. Hi, I'm John.

And I'm Julie.

We are the hosts of the Hartford Fund's Human-Centric Investing Podcast.

Every other week we're talking with inspiring thought leaders to hear their best ideas for how you can transform your relationships with your clients.

Let's go.

Well, welcome JT to our Human-Centric Investing podcast. We're delighted to be here with you today.

Thanks, Julie. Thanks for having me. This is my, uh, favorite part of the week.

So, jt, uh, you were on with us last, just prior to the election in 2022. And as you know, I've started JT Taylor Fan Club because if anybody goes back and listens to that episode, both Julie and I were amazed at how accurate you were, but that's why we're back today. You know, it kind of like we could all exhale after that election, right? And we could all get our groundings again, and maybe we wouldn't hear about elections again for another year until 2024. But I know in talking with you, you, you've kind of informed us that's probably not gonna be the case. So really what we wanted to have you on today to talk to us about was update us about where things stand now that the election results of 2022 are known.

Yeah. And, and again, John, Julie, thanks for having me. This is, this is really fun for me. Believe it or not, I I really enjoy this engagement with you guys. Um, so we're, we're in 2023, Congress is, is just being seated. We had a bit of a delay on Capitol Hill, uh, given, uh, the, uh, McCarthy's, shall we say, running for the speakership. And so with that, Congress is getting a little, uh, a late start getting started. Uh, the, the committees are just up and running. Um, the agendas are still being vetted. I mean, there's just a lot of, of legwork that needs to be done. And a lot of this is done in December prior to being, uh, uh, uh, elected the, the, the formal election for speaker and of course, the swearing end of the members. So we're in February now. Uh, and, and just, it, it's gonna be a little tight, John.

I mean, we talked about this during the third quarter, in fourth quarter of 2022, where you've got a divided Congress. We were looking at a divided Congress, um, an election year, uh, in, uh, in, in another year. And everybody sort of jockeying and, and posturing for that. I don't believe that there's gonna be, I mean, is there going to be serious legislation considered? Of course. But a lot of the legislation we're going to see coming from the House and the Senate, both parties are going to be guilty of this is messaging. It's not a, and again, I'm not trying to diminish it, but it's not a serious attempt at legislating right now. This, it is a, a play to their constituencies, um, and, and, and for their reelection bids and to make sure that, uh, uh, their, their core, uh, is, uh, and their base is with them time and again, I think where you're going to see a lot of, uh, angst again, is around the three or four things that need to get done.

That's the debt ceiling, number one. Number two, that's passing a budget. Three, we have a farm bill, uh, that needs to be renewed, and that's going to be critical to our economy. And then there are defense and other supplemental issues, uh, whether it's Ukraine, whether it's national disasters, uh, natural disasters, uh, that need to be tackled. Uh, those are gonna be the, the uncertainties that will need to, to bipartisan support throughout the year. But we've discussed this before when it comes to the, the legislative part of this. Uh, and as I said, the messaging, uh, the, the fringes are going to drive

this on both sides of the aisle. And so would I admonish, uh, or encourage maybe everyone to do is you don't wanna ignore the fringes, but pay attention to the center, uh, pay attention to the big issues. And where there is common ground, uh, uh, with both parties, that's not a lot.

Uh, uh, having said that, there's not a lot of common ground right now. Uh, but we're looking at 2024, and just as we have divided government now, uh, with the, the Republicans holding the house, the Democrats holding the Senate, that could easily flip in 2024. And that's, that's not something that happens historically. You can have the House turn Democrat. Remember John, we talked about this, uh, right around the election where there are, um, uh, I think 18 Republicans right now that are sitting in Biden plus Biden districts, very pro Biden or Democrat districts, if you will. And those people are on the fence. Uh, that could go either way. And in fact, I think 11 of those 18 seats are in New York and California. Not the Reddest states in the Union, by the way. So just as easily as the house flipped the Republicans, it could flip back to the Democrats in 2024.

Conversely, on the Senate side 33, the 34 seats, the third of the Senate is up every two years. And this year, Democrats have 20 seats to defend of those 33 or 34, and some of those are in red states. Uh, so they've got a really, uh, big uphill battle to keep the Senate not impossible. Uh, the last two cycles, McConnell thought he was gonna be the majority leader. It comes back to candidate quality at the end of the day, and we saw where that went. Uh, but you can bet that McConnell and, and some of the more mainstream Republicans are going to have, are, are will wanna have a bigger say in who the nominees are. They're not going to want this chance to take the Senate back slip through their fingers again.

Well, jt and I think in regards to your comment there, if you think about it, I think I have this right, the Republican majority in the house is four seats, right? And you could say it's those four New York seats, right? Which, as you mentioned, were, were Biden districts in 2020. And I think the majority those not by a little, like, by a lot. So I don't envy Kevin McCarthy having to deal with, you know, we hear a lot about the conservative wing of the Republican party, uh, but really he's gotta be thinking about those legislators that are actually giving him the majority as well, correct?

Yeah, absolutely. And, and we'll get to this, I know we've gotta talk about the debt ceiling here in a second, but we'll get to it with, we'll, we'll, we'll talk a little bit more about the debt ceiling. But when you think about it, you've got the four in, in, in New York. Uh, you've got a number of them in, in six or seven more in California. And these are just the newly elected ones. There are probably another dozen, shall we say, moderates. I mean, the , it's kind of hard to be a moderate in the Republican party without, you know, the name calling, uh, uh, uh, starting. But, um, so there are probably around 20 to 25 moderates, maybe more, uh, that, uh, that, that McCarthy's gonna have to keep his eye on, and that that's not an easy bunch. Uh, again, we, we've seen what the Tea party sort of this far right element has brought to the equation.

Um, I, I don't believe that the moderate Republicans, or I don't know if you wanna call them endangered Republicans, but they're not gonna sit in their hands during this debate. So McCarthy really has to straddle the two. And then there is the, there are the mainstream conservatives in the middle, and, uh,

they're, you know, it all comes down to on e on both sides of the aisle. Uh, what tail is wagging the dog? Is it gonna be the far right or the far left tail? And I think just sort of going back a second to the first two years of the Biden administration, you know, we all thought in, in, in many out there would probably posit that, uh, the liberals, uh, dominated the first two years. But when you think about it, uh, and think about Ocasio-Cortez and some of these others we're, we'll talk about infrastructure in a second, but we had a multi-trillion dollar, uh, infrastructure bill, just over a trillion dollars in infrastructure spending.

Um, some of these progressives were calling for five to 10 trillion in, in, in, in infrastructure spending, untenable. It's impossible to get through in DC. Uh, but, and, and so he kept them at bay for the most part. Uh, the, the, the agenda, agenda was driven by the, the, the, the liberal wing. Um, but now we're in a different, uh, paradigm here with McCarthy and his right wing, and it's all going to depend on how much they control the agenda and control the party in the house. And early signs are that, you know, he's, he's really done a good job in the first week, uh, first couple of weeks, uh, sort of navigating these shoals. I do think that the tougher tests are ahead of them. Again, as you said, there's a four, you could four seat majority. You've got the George Santos problem looming, so anyone know, no one knows where that's going to head. And then you did have a, uh, unfortunately you had a member of Congress in Florida, uh, take a, a pretty nasty spill from a ladder, uh, back in mid-January. And so with the end of proxy voting, um, um, he's got pretty much a three seat margin here in the coming weeks. So, um, a really tough battle for McCarthy, but, uh, even tougher when it comes to these big issues and keeping that right wing of bank.

You know, JT it's interesting, as you, you rattle off all of these examples, it makes me think about headlines. And I counted on my phone over the weekend, just the news app alone, the number of updates. There were 37 of them in, in 48 hours on, on my phone. And it's, as I sit here and think about a financial professional fielding calls from clients and proactively reaching out to clients, of course, as we are in the throes of tax season and have continued market volatility, you know, all of these headlines and how they, their noise and, and they cloud our minds. If we think about some of the key issues that we can arm financial professionals with to, to discuss with clients proactively, even if maybe they're not on the same side of the political coin, if you will. You know, what, how would we start to synthesize that?

You mentioned the debt ceiling, maybe that's a great way to, to kick off our conversation, but just in, in thinking about some of those areas that, that we could provide those talking points and those updates and maybe some, some great explanation and background for clients as well. Because my guess is, even as educated and intelligent as we, we all are, um, the headlines can tend to grab and tug at our emotions, and then maybe we're not thinking clearly. And, and that obviously can have a, a, you know, significant ramifications on our portfolios and our asset allocation and ultimately decisions that we're making about our future, just based upon things that are popping up on our phone on any given day.

Yeah. And again, , I, I, I hope this isn't, uh, gonna come across the the wrong way, but I, I, I say ignore the fringes first and foremost on the Republican side, uh, there's a call for a national sales tax that the Democrats are making light of, you know, eliminating, uh, income taxes. Whether we agree with this or not, it's just untenable right now. And it's, it's that headline risk that we refer to just as bad

as a five to, we might need five to 10 trillion in, in infrastructure spending, Julie, but we're not gonna get that, uh, at the end. It's not realistic. Uh, so ignore, try to ignore some of the headlines coming out of the, uh, of the, of the, of the more fringe element of, of con fringe elements of Congress. And they exist on both sides. This is not unique to the Republican or Democratic Party.

Just to make that clear, we'll get to sort of the core issues where I think Republicans and Democrats, uh, agree on, but to the debt ceiling right now, and this is, this is a straight down the center, Julie, the debt ceiling has been raised 78 times over the course of our history. Do you realize that, by the way, we're only one of two countries in the world that have a debt ceiling. Do you guys know who the other one is? Denmark. Uh, you asked Denmark are the only two countries that, that countries that have a dead ceiling been raised 78 times in history, 49 times by Republicans re by Republican president 29 times by Democratic president. It's not a partisan issue. Uh, it is an a should be an apolitical issue. Um, I don't believe that a budget should be negotiated on the debt ceiling.

This is something that the full faith in credit the United States, the reputation of the United States relies on. This, is something that we have, uh, remember John and I discussed this last week, or a couple of weeks ago, back when this happened in 2011. It, it, we got really, uh, we got to the precipice of, of not doing it. And we, we were downgraded from what, triple A to double a John, if I'm not mistaken. And that really caused, uh, not so great ripples throughout the economy, not just the US economy, but the world economy. The same thing could happen here. Uh, and so, and that's not saying that we don't need to make budget cuts. And when, if there's one thing that's clear after the pandemic, we've spent trillions of dollars. Uh, some people would agree whether or not, uh, we should have spent as much as we had, but it is what it is.

Both parties did it, both presidents did it. Now we're faced with a dilemma of raising the debt ceiling and then trying to get government spending under control. And it badly needs to be under control. Just don't use the debt ceiling as a vehicle to do that. It's, again, just something that's routine, should remain routine and shouldn't be rattling markets and shouldn't be rattling politics and politicians as it is doing right now. With that, just if I can take it a second to talk about government spending, you could do that when it comes time to, uh, go through the government, uh, appropriations bills, which we will be doing this summer. Uh, when we get to the budget talks, we're gonna see, um, uh, uh, uh, the Biden, uh, budget proposal soon, uh, in early March. Uh, Biden is asking the Republicans to reveal their budget. We kind of need to know, uh, what we're talking about from a budget cut standpoint, from a budgeting standpoint before we can negotiate right now.

Uh, the, you know, we're, we're negotiating on sort of, it feels like thin air, like no proposals on paper. Nothing has really been discussed. I don't believe that, you know, the Democrats accusing Republicans of wanting to cut social security and Medicare, um, are just, uh, I, I, they, a majority of Republicans don't want to do that this much. I know there are proposals to make changes, but again, don't pay attention to those because they're not gonna make it through. But the Republicans will use that as a coul time.

And again, uh, but the, the time to make budget cuts will be throughout the year through the normal routine appropriations process. And as I said earlier, we have the debt ceiling that's going to frame the beginning of the year into the summertime. And then as we get to the fall, we'll have the budget talks and, uh, sort of the, the government shutdown all over again. That's, while I'm not a big fan of the government shutdown, right? That's where the negotiating should be taking place. Um, not on the dium.

So jt, we talked about divided government and how divided we really are, and some would say that's probably why the market has rallied in the early part of 2023, right? Because if they can't agree on anything, then nothing gets done. But the truth is, some things have to get done. And so I was hoping you could share with us some of the issues in which there may be agreement. Maybe the Democrats and Republicans don't agree for the same reasons, but where, are there areas where you think, uh, that they can come to agreement on to actually affect some legislation or take action, uh, in certain important areas? What would you say?

Yeah, aside from the big, the big three I've mentioned the debt ceiling, uh, the budget and, and of course, the farm bill, which is coming up, and there'll be another defense authorization later in the year. I think those are the four must pass areas. Um, not, not all with bipartisan agreement just yet, but I believe they'll get there. The other areas, I think, whether are commonalities are, you know, probably big, some big tech legislation coming down the pike, uh, will have, uh, the crypto, uh, some sort of cryptocurrency, uh, regulation or legislation. I see both parties coming together on, on that front. Um, oddly enough, and I, I kept my list from a, a previous talk in front of me, because it's kind of a long list here, but China, uh, given recent news here, uh, China is going to be front and center in just the early, early, uh, uh, part of February and the latter part of January, we had sort of n 8 9, 10 different issues starting with TikTok.

TikTok CEO is going to be, um, uh, appearing before Congress in, in, in, I think March 23rd. Huawei is experiencing some angst on Capitol Hill. We've got, uh, uh, we're upping our bases in the Philippines establishing a, um, an embassy in the Solomon Islands. Uh, we had earlier in January, uh, in, you'll both remember this general Menahan talking about an impending war or conflict with China in, in 2024. That was echoed by the Chairman of the House Foreign Relations Committee, uh, Mike McCall. Uh, we've got a China committee, a China Select committee, a bipartisan China Select committee being set up in the house right now to look at China issues. Um, there is a bill that passed the house prohibiting China from buying oil from the strategic petroleum oil reserve. And of course, speaker McCarthy has to go to Taiwan, or is looking to go to Taiwan, just like Pelosi did back in, uh, 2022, which is, we all know a lot of, of, of, of ruckus, uh, with the Chinese.

And of course, then we had the balloon incident, uh, back in, in, in early February. Uh, that's, uh, that's still having some rip ripple effects. So with that, I think China is going to be another focal point here, John. And, uh, those are like the three or four areas where there are agreements, there are, there are others, uh, but those are the big ones that I foresee right now. Um, I don't see much, you know, back to the original question on, um, uh, as we look at 2024, and when we talked about the, the party switching, uh, we could foresee in 2024 if the house hypothetically becomes, uh, uh, uh, a Democrat. Again, the Senate turns Republican and it, let's just say it doesn't matter who's in the White House for the time being, just for the purposes of this exercise, we still could have static policy on taxes.

And of course, government spending, I think is going to be at a standstill, um, for the next two, three years. So I don't think we'll see many changes, probably some around the edges. Again, it's gonna be really hard if there's divided government in 2024, 2025 in 26, it's gonna be really hard to get significant tax legislation through. So we're looking at the status quo and probably potentially an expiration of the

Jt, if I think about historically, it, it seems like the, in, in a year of an election, obviously there's a tremendous amount of activity, headlines, emotions, but it starts, it's starting to feel like an election year is, is bleeding into more than one year, um, in 2023, obviously feels like it's off to the same start. Would you agree with that? And, you know, what, what are some, if so, what are some ways that, that maybe financial professionals could begin to frame that with clients and sort of set expectations that, you know, maybe this is just a teaser for what we're to expect next year re really emotionally and from a headline perspective and et cetera.

, my piece of advice, turn the TV off. Turn your phone off. No, no, honestly, Julie, I mean, that, that, that's gonna be a tough one. I mean, you know, as I said, everything is messaging right now on Capitol Hill, um, and everything is gonna be looked at through the lens of 2024. Um, and, and again, appealing to the base, uh, we're gonna need to let the, the year play out. I, I, I do remember elections starting early, but if you think about it, we had, um, uh, uh, uh, Trump announce, uh, in December of 2022. We'll have Nikki Haley, uh, in 2023, uh, probably one or two others in the first quarter. We're talking about 20, maybe about 20 months of pres. I mean, I wanna go back to a, the European, uh, and I'm gonna get, uh, uh, I'll probably get attacked on Twitter for this, but I wanna go back to like a European or Canadian system where an election is called three weeks before, and everything is compacted into that, that three week time.

That would be heaven on earth for I think, the American people not to have to deal with this for 20 months. Uh, but again, I would say stay the course again, Julie, sort of, um, um, ignore the noise on, on both sides of the aisle right now. Not completely, but ignore the most of the noise, because I don't think we're actually going to have a nominee, um, on the, at least on the Republican side, uh, until early 20 or mid 2024. I mean, just not with as many candidates are getting in with as much uncertainty that's out there. Um, uh, you know, it's, it, it, it's anybody's guess who's going to win that should Biden, um, announce and, and many expect he will, and be the standard bear again, just go back a second. Neither party is happy with the lead front runner of, of, of, um, of their parties right now.

They were, they, they want fresh blood here. I think the country needs fresh blood here. Uh, and that's sort of a on a bit of a tangent here. But with that, um, you, you, we, we could be looking at a rematch of 2020 again, 26, uh, uh, the 2020 race. And, um, uh, you know, Julie, I, I don't know from a congressional standpoint, I, I think we're headed for divided government for a couple more years. So I would just look at not a lot getting done in Congress. And I think from our standpoint, that does bode well, that, that, you know, congress, uh, that the markets aren't looking over their shoulder, uh, uh, constantly for a tax coming from Washington, there are going to be, um, uh, pieces of legislation. This is going to be the year, uh, and maybe two years of regulation if Biden can't legislate, and it's gonna be really tough to legislate, he's going to regulate. And so you are going to see more regulations on industry, uh, but typically, uh, the country wants to see, uh, they, they wanna see the problems getting solved. But I think the markets don't mind divided government, and I think we're headed for that for a couple more years.

Jt I know, you know, we, we talked about headlines, uh, just a moment ago in our conversation, and I know Julie and I, and and our team have a presentation called Media Replay that oftentimes is high in demand, especially in election years, because we're trying to educate people that emotions, and when you think about politics, there may not be a more emotional topic. Emotions in investing usually don't make a good mix, right? So I think for financial professionals, it's being able to take a step back with a level head and look at what's being said. And as you said, not ignore it, but you know, it, it, most of it is probably gonna be messaging into the next year. And so, as I, as I think about things that really could make a difference and maybe longer term trends, um, one of the issues we talked about in the 2022 election that I think some thought were gonna be the number one issue, at least it was gonna be a high priority issue, is immigration. And since we've last talked, we've seen a number of things come out about China's population is shrinking. Western Europe, especially Italy as an example, population is shrinking. And nobody really thinks about the long-term devastation that this brings, especially if you're in a country that restricts immigration or doesn't have a good path of immigration. And so, I guess from the inside DC standpoint, is anything productive gonna happen on immigration, or is it such a hot button issue where people just see the headline and that's all they take from it? So nobody wants to touch it.

There are going to be attempts, John, uh, and probably many attempts to tackle this, this conundrum. I I'm surprised that the Biden administration hasn't jumped on this from day one. I mean, this is something that when they had the House and the Senate, again, the Senate by one vote, uh, I think he should have taken a much more aggressive approach on. And I think the time has, and I, I'm, I'm hoping to be wrong here, John, but I think the time has passed for significant, uh, immigration legislation. Um, when you had unified government, it would've, again, not easy given the, the numbers, uh, and, and the margins the Democrats had, uh, the very slim margins. Remember, Pelosi had, has the same four seat margin, had the same four seat margin that McCarthy has right now. And again, uh, Schumer only had the, uh, uh, uh, a 50 50 Senate and, and Kamala Harris broke that tie.

Really tough to get done the first two years, but again, surprised that it didn't happen. I'd be even more surprised if the parties could come together a year before an election to get it done with that. It really is a crisis. It's, it's, it, it's reached a point, uh, that, um, uh, that, uh, the point of no return, in my opinion. I think there are, you, you make some really valid, uh, points on trying to get this done. Um, it's going to take, uh, muscle, and it's going to take a lot of courage from the center once again to get this done.

There is a, uh, for example, you've got, uh, a member of Congress on, on the far right that wants to negotiate immigration on the dead seal, right? Uh, come on. I mean, this is not something that, that, that should even be considered. Uh, so these are the things that you're gonna have to navigate in this Congress, uh, to get it done. It's gonna take real leadership. And I personally don't believe, uh, encourage, and I personally don't believe it exists. I think they're gonna, they're gonna be some attempts, uh, we meet, there gonna be fits and starts. Uh, we might have some minor legislation, um, um, getting, uh, getting through there, but it surely needs to be done. And I just don't think the numbers are there on Capitol Hill, sadly.

It's interesting, jt, I've heard you mention a centrist approach, and I think that that's really an interesting mindset, you know, finding those common causes, even if they're for slightly different reasons. And I think for a financial professional, that's just such a great mindset to have when having conversations

with clients. Um, could you share with us a few more thoughts on some that sort of centrist mindset that you've mentioned? Just how you think about it and, and maybe some, uh, some good guidelines for that for financial professionals.

First and foremost, ignore the extremes. We talked about this earlier. You, you, you can't pay attention to the shiny objects on each side of the aisle, right? They're gonna be there with that massive, you know, multi-trillion dollar infrastructure spend, or they're gonna be on the other side of the aisle with that 35%, uh, national sales tax untenable. Uh, ignore it as much as we wanna gravitate and pay attention to those stories, ignore them, because it's, again, they're just not steeped in, in, in reality. One, two, , uh, uh, I'm not helping the stock prices of, of some of the social media giants here, but stay off of social media as much as possible. I mean, it, it really is. We're just constantly bombarded by this stuff. And you, you know, and, and we're, we've become a very tribal nation, as you've heard this term. Use timing again.

And, you know, so we're, when we're on social media, we tend to look at, uh, like-minded, uh, news outlets or like-minded social media outlets or what have you. I just, I, I would, I, I would just recommend you, you, you staying off there. Um, not gonna to win any friends out there and, and, and, and just focus on, I think maybe this is gonna sound a little trite, but focus on what's, uh, the art of the possible, right? And, uh, what is realistic in Washington DC and unfortunately, there's not a lot right now that's possible. Um, and we've been through a couple of these issues right now, but, um, I've, I've found that staying, um, uh, in, in sort of ignoring, uh, the news networks on, on what whatever you watch, um, and, um, um, staying off of social media as much as possible. And there's just some few, there are a few pieces I think I may have mentioned, con Congress daily.

Again, not something you guys wanna read out there because it will put you to sleep in, in five minutes, but just trying to look at the issues out there and, and not listen to the fringes with the megaphones.

When you think about this, John and Julie, uh, the fringes have a, we didn't have to deal with this as much 10, 15, 20 years ago. Now that these, the, these, these more extreme elements are on social media, they have a megaphone. And unfortunately for our friends in the, in the news industry, um, or unfortunately for us, our friends in the news industry gravitate to those with the megaphones cuz they make headlines. That's what sells newspapers, you know, that's what sells clicks, uh, at the end of the day. And so ignore that. Easier said than done.

Jt, one last question from me. Um, you know, we, we talked about the danger of making decision by headlines, but you, I and Julie had a conversation where we talked about legislation has already been passed, money is being spent. You may not like the level of spending, you may have disagreed with it, but whether you liked it or not, it's happening. But we always tell advisors to a certain extent, you do have to look for silver linings, right? You have to look for positive messages because there's plenty of negative out there to fill everybody's heads. But, uh, one thing you mentioned was the chips spill that passed last year, and there is a silver lining. And that, in fact, I think if, if most Americans heard about some of the things that are happening, they might actually appreciate what's going on. But would you share with our audience, uh, just as an example, kind of what's happening as a result of the passage of that chip spill last year?

Yeah, I mean, and I, I, I had a discussion with, uh, a senior member of the military, retired member of the military back in December on this front. And I said, look, this 40 billion in, in, in, in chip's legislation, in semiconductor legislation went through, uh, much bally hood by the Democrats and, and, and some Republicans. And of course, president Biden, uh, you know, what gives is this, is this legit? Is this going to make a dent and, uh, is it needed? And he just point blank said, jt, a hundred percent, it, it's a dent, it's a start, but, and we're already behind the eight ball. Uh, but it's about time that we got this, uh, uh, that we, we, we got this started, uh, or else we'd really be behind the Chinese in the coming decades. So definitely a positive sign, not just from a strategic, um, or geopolitical standpoint, uh, but also from a jobs creation standpoint, onshoring, um, a less reliance on, on, on, on, on, on, um, on China and other, uh, foreign entities for some of this technology.

So I, I, I tend to listen to, um, uh, um, uh, some of these, uh, uh, senior military types and, uh, when, when, when they say that it was, uh, stepped in the right direction, not problem, not solved by the way, by any stretch of the imagination, but definitely a big step in the right direction. But John, there's also, uh, 3 trillion in, in additional spending that's still out there floating in the economy, that, that still hasn't been spent from, uh, uh, uh, the early covid days. Also, the infrastructure bill. Um, that money is going to hit the economy and starting to hit the economy. We're seeing projects in your states and in, in and here in, in the DC region. And then you also have, uh, the investment, uh, um, the Inflation Recovery Act, um, uh, that, uh, passed last year, agree with it or not, that's going to work its way into the economy.

So it's about, as I said, about 3 trillion making its way, um, uh, through the economy. And then I just read this morning that states have a 136.8 billion, uh, rainy day fund. Uh, so a hundred thirty, a hundred and thirty six 0.8 billion in rainy day fund money monies out there. So states are in pretty good shape. That was in the journal this morning. Uh, so states are in pretty good shape as well, so yes. Um, you know, there is talk of, uh, uh, soft landing. Uh, yes, there is talk of, you know, a debt ceiling impasse or government shutdown, but from a a positive standpoint, three trillions in there, uh, again, potentially inflationary at times. And so I'll save that for the Economist. But a fact is a fact, there's money out there and it's making its way through the economy. And specific to the chips bill, it's having an impact.

I used to work for a guy who would tell us that it's amazing what we'd would accomplish if we just didn't care who got the credit.

. Yep. Hundred percent. Oh God.

So jt, you've been with us on the, the Human-Centric Podcast before, and you know that one of Julie, my favorite segments is what we call the lightning round. And so we talked a lot today about division and commonality. We'll see if we can maybe share some things in common with you based on your responses to our questions. So if you're ready, let's rock. My first question is dark chocolate or milk chocolate.

Oh, God. I mean, dark chocolate. Oh, god. Dark chocolate. Uh, I eat, uh, periodically because it's better for you than milk chocolate, but I like milk chocolate better.

There you go. That's a definite milk chocolate

. Jt, what's the ideal outside temperature?

Oh, 70 degrees

Jt. Are you an iPhone guy or an Android? Android guy?

IPhone only because it just, it, everything, everything is, is, um, everything clicks.

Do you prefer a paper to-do list or a digital one?

Oddly enough, I have both. I, but I do prefer the paper.

All right. Similar to the chocolate question, Coke or Pepsi World's apart?

Neither. I don't drink soda.

Well, there you go.

I probably would drink Coke if I had to, if I had to pick one or the other.

If you had a chance to take your spouse on a long weekend, what would be your favorite US city to do that in?

Favorite city would probably be Carmel, California, Carmel by the Sea. It's

Beautiful. Good pick. Yeah.

Amazing. Plus I'd get some golfing.

Speaking of travel, what's one item you can't leave home without?

Probably my phone.

Yeah. Good answer. And all sports considered jt, what's your favorite sports team?

Pittsburgh. Steelers. I think they're back there somewhere.

. There you go.

Do you prefer to shop online or go to the store?

Online? I don't like going into stores and I, I don't know when the last time I was in the shopping mall. So online is my savior.

I'm gonna put you in the way back machine. Jt, what was your favorite board game as a child?

Good pick. Did you win?

I pick. I did always, almost always

Little rivalry with my younger brother.

I was gonna say, you, you created a lot of family, uh, family, uh, worse then very competitive, family,

Everything.

That was always the banker, , jt, are you spontaneous ? Are you spontaneous or are you a planner?

A planner. A planner with, with a, a spontaneous streak. And I, I love, I I, I just don't like surprises, but, um, uh, yeah, I'm a a a a A planner.

Would you rather binge a TV show or watch a movie

Binge

Any favorites?

I'm binging slow horses right now, which to me means like an episode of night. So it's, uh, uh, an Apple Plus. Uh, have you guys seen it?

I have not, but I, I, the, the whole binging thing kind of sneaks up on me because my binging is like an episode and a half before I fall asleep at night. I don't make it much past nine 30. . It doesn't work well with binging

. Yeah, and I have to wait for, that's really bad weather. So I, I, I lo I can't stand being indoors, so, um, I have to wait for snowstorms cold or rain.

Fair enough. It makes sense. Are you a tea or a coffee person? JT Taylor (40:41):

Coffee.

And one last one for you, jt. Do you prefer texting or phone conversations, which I guess is pretty important in your business?

I prefer texting.

Hmm.

Lots of phone conversations, but texting, if I could get something done, texting in a, in without a long conversation, long back and forth, texting easily.

Well, JT, we can't thank you enough for joining us today and, and helping us shift our mindset to finding commonalities. Uh, so for our listeners, you can access jts commentary by visiting Hartford funds.com/politics. And, uh, take a peek at his newest article, Washington Divided What to Watch. Thanks again, JT, for all of your insight and education today.

Thank you, Julie. Thank you, John.

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