June 17, 2020

It’s Not Just About the Billionaires! Why America’s Economic Policies Matter to You – with Clara Del Villar [Ep. 23]

It’s Not Just About the Billionaires! Why America’s Economic Policies Matter to You – with Clara Del Villar [Ep. 23]

Economic policies affect us all – not just the billionaires! America's markets offer a unique opportunity to build financial security. However, equal opportunity does not guarantee equal outcomes.  How can we expand our awareness to make wise choices and grow our own prosperity?

Listen as Linda interviews Clara Del Villar, a successful minority executive, former investment manager, entrepreneur, and Director of Senior Initiatives at FreedomWorks Foundation.  She faced many obstacles as she built her career, but her work ethic and love of freedom paved the way for her success. You will be inspired by her story and encouraged by her wisdom. 

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Linda: Thank you for joining us today. I have a repeat guest. Clara Del Villar is my good friend, and she always has great insights. She was one of my earliest guests on this podcast and I'm so delighted to have her back today. Clara is the Director of Senior Initiatives at FreedomWorks Foundation. She has a 28-year financial industry career which has included senior roles in investment management, private asset management, and capital markets. Her entrepreneurial ventures involve digital media as founder, editor of the Hispanic Post, a conservative news site, with energy technology as Founder and Managing Director of InEnergy, a consulting division of Energy and Environmental Research Center in Grand Forks, North Dakota, and health tech as advisor to Triologics Incorporated. She is also a former consultant to 60Plus Foundation.

She currently sits on Board of Directors and Audit Committee of General American Investors Company, and Executive Committee of New York Weill Cornell Women's Health Symposium. A member of AEI Leadership Network, Tribeca Disrupter Foundation, and American Alpine Club, she trekked to Mount Everest Base Camp in 2017. Clara has a foreign service degree from Georgetown University and lives in New York City. And with that introduction, I welcome you, Clara, thank you for being here.

Clara: Thank you, Linda. I'm delighted to join you this afternoon. And we always have terrific conversations and a lot’s going on to continue that trend.

Linda: Oh, it is. There’s just so much to talk about. And I know when we have been talking the last few weeks too, you are in New York City and you have been somewhat sequestered there, shall we say, through the COVID crisis and then with the violent unrest. Can you tell us a little bit about what that's like? What it's been like to be living in New York City at such a pivotal time in American history?

Clara: Right. Well, I must say I've been here for almost 40 years, Linda. So, have seen the city go through many different transformations. But it was very startling and unhappy to see the city go from an amazing metropolis, thousands, millions of people coming here every day, you couldn't even get through Times Square or Grand Central, the arts, the theater, all the engagements here. To go from that to nothing, end of March and April, to really see the city in tough shape. And then to really see all the stress going on in the outer boroughs. Because most of the people that were fatally impacted by COVID, Linda, were in Queens, Brooklyn, and the Bronx. These are folks with poor health conditions, a lot of preconditions and multigenerational home living so they live very closely together in a dense area, so are very, very vulnerable to fatalities. We had 30,000 deaths in New York State, so we definitely were hard hit.

Linda: You were hard hit.

Clara: Yeah.

Linda: It's tough. And I know that people got tired of being confined, and that makes it tough. Emotions run high. There's just been so many different things that have had to do with policy and how things were run from state to state during the COVID crisis. And even now, while we're recording this, there's a lot of unrest across the nation. It's just a unique time in American history and those of us who have lived longer, we realize that our country can survive, but we need to band together and unite upon the principles that made this country great and then we will survive. United we will stand, divided we will fall.

Clara: No question about it. I must say to see, given your point, sadly, as the COVID crisis was lessening in New York and other cities around the country, then we had the unfortunate protests and the George Floyd killing that really ignited a whole new mess of problems in cities like ours. We saw a lot of looting, a lot of unnecessary destruction. And that really more or less created a much more disorienting feeling, I think, in the city that did not need more stress.

Linda: Right. I know we had talked a couple weeks ago and it was amazing to me to see the similarities to like the late 60s, early 70s where we had rocket ships going to space, manned ships, and we had riots and unrest, and I personally pray that, of course, our nation will get out of this and find a way forward that is positive and unifying, and that we can be united prosperous nation again.

On this program, we often talk about how policy affects paychecks, how policy affects individuals. And I like to connect the dots between national policy, local policies, and how it affects individuals. You have a unique background. You are a minority woman. Your parents immigrated. They fled the country from where you were born, they fled the country for safety and prosperity. Could you tell us your background a little bit and how that immigrant background as well as your minority background has been a challenge and a blessing?

Clara: Correct. Well, I'll be brief because it's also the story of so many Americans, Linda. My parents were living in the Dominican Republic and my mother's family were landowners. The dictator, Trujillo, was a very cruel, ambitious dictator, as they tend to be. He imprisoned my grandfather, took all their property, caused a lot of stress in the family. When those things happen, again, Americans have to realize that these families in these countries have nothing. Fortunately, my mother met my father and they decided to come to the United States because the US was actively recruiting young foreign medical students in the mid-50s, 1950s.

So, they came to New York, they ultimately settled in Pennsylvania. I grew up on the grounds of a mental institution where my father was a [crosstalk] psychiatrist. Again, we were the only Dominican family in Pennsylvania probably in those days. So, it was an interesting experience but it was also one that I have to emphasize every day around the dinner table. My parents marveled at the freedom and opportunity that the United States had to offer their children. So, they never hesitated to emphasize that or regret the opportunity that really this country had to offer, even though they too faced a lot of racial issues. Those things happened with some regularity in those days. I realize they still happen today, but they never let it cloud their aspirations. They passed that on to me with a very, very strong emphasis on what I could do.

I spent years in Washington, but I really wasn't that interested in career in the government. I came to Wall Street in 1980, faced all kinds of issues. Actually, the racial issues were less significant than being a woman. But the point was that the opportunity was there, as long as we stuck with it. It reminds me of many great black leaders that are not being emphasized enough in terms of the lessons that they've passed on and the programs that are available, where they urge people to take risk. Take risk when you're young. You can afford the back and forth. Don't hesitate to really seek all the opportunity that the country has to offer. That's not sugarcoating. That's the reality of what America offers.

Linda: Truly does. Just for clarification point, were you born in the Dominican Republic?

Clara: No, I was born in New York. I think my parents wanted their children to be born here, and they were newly married. They were going to settle in New York, but they decided it was probably better to raise a family in Pennsylvania, so that’s-- [crosstalk]

Linda: Okay. All right. Well, thank you for clarifying that. I think I might have misspoke earlier. But that's great. The bravery that your parents showed, just like so many immigrants, many of us have that bravery and courage in our family tree.

Clara: It's a motivating factor. I'm glad you touched on it because in many ways, I thought, my mother didn't speak English that well. My father did because he was a medical student, a bilingual medical student. But the point was, I thought, “If they could do this and come to a new place, then I have no excuse, but to really try and fail and try again, to really make something here.”

Linda: Yeah, that's beautiful and inspirational. You shared with me once a story of how your father shared that the barber would not cut his hair because of the color of his skin. You told me, at the time, you never once thought about going and looting or destroying that barbershop, what were your thoughts?

Clara: Yeah, he would share-- he would tell us stories every day about what was going on in his day and the barber didn't cut his hair. I remember being so angry. Somehow, I just thought I was going to buy the business and run it myself the right way. It never occurred to me to go into the town and start looting, or calling my friends and coming into town and looting the city. I am stressing that with the most important lessons, with calm and with a plan, you can get through these issues-- [crosstalk]

The old sticks and stones thing, Linda, is real. They can break my bones but words will not hurt me. I feel sad that people are letting words hurt them or activate them in the most destructive ways, not really seeing what the possibilities that exist now in an even more expansive way than they did 50, 60 years ago when I was a child.

Linda: Right. As we look at the policies that have allowed for opportunity, yes, I think every nation has times where they've made mistakes, where they have not treated their citizens fairly. We can look back on that time and we look and say, “Whoa, we learned that that was not the way to be.” We learned how to look at people not through the color of their skin, but quality of their character. That's so important. It's just so important-- opportunity-- we do not guarantee equal outcomes in America, but we do guarantee equal opportunity for those who are willing to work hard. Like you said, try, fail, work hard, do your best, keep climbing. You climbed Mount Everest, sometimes becoming successful in life is like that. We just have to keep climbing.

For those of us and people in our country, it's not that these things come from government, it's that government allows us the opportunity to achieve. And that's I think one of the big divides in our nation right now, is that people think government needs to provide these things, but actually government cannot provide this. The role of government is only to provide the opportunity for us to prosper.

Clara: No question. That's why I became a conservative in 1980. Reagan changed my thinking and fueled my ambition even further with his optimism, Linda, and his optimism that it was available. He never said it was only available to white people or these certain groups. It was available to us all. So. that was a very motivating element and really has continued to be a pillar that I really stand on, which is we can look at the bright side, opportunity is amazing.

In 1986, I'll tell you a quick story. I was on Wall Street and I wanted to buy some investment property in New Jersey. I was doing well on Wall Street because these were very big hay days then. And when I went to apply for the mortgage, the mortgage banker said he had never given a mortgage to a single woman before. It was the first time he had ever done this. This was in Spring Lake, New Jersey. Times have changed so immensely, that to make the dialogue or make the narrative now sound as if there's nothing but prejudice around us, there's no way we'll work through this, and these groups-- these isolated groups are the only answer to push us forward, I think is a false narrative.

Linda: It's very limiting to people.

Clara: It's very limiting at this stage. In my mind, I think people should still pursue immense opportunity in a number of industries, whether it's financial, technology, any kind of computer science or programming. I can go on and on and on. The opportunity there remains very expansive.

Linda: Exactly. And even for those who-- well, now we're finding, especially with the COVID, that we don't necessarily have to go to an Ivy League college or something to get an education. But I know you and I've talked before about the importance of the trades. In the last several decades, the involvement in trades has gone down. We have shortages of plumbers and carpenters and welders and things and--

Clara: Contractors.

Linda: Contractors. This is very, very important. Especially with the economic boom, that was happening-- especially right before COVID, and we hope will re-happen very quickly, but jobs were expanding. This is one of the things that I wanted to touch on as well, because you have been involved in economic education and investments and business development, entrepreneurship for many, many years. You've seen the ebbs and flows of the economy, and the impacts that different leaders have had, our national government as well as state and local governments, and in organizations.

I always say ideas have consequences, policy matters, and it matters who’s elected. Whether it's to a board of directors in a company or whether it's to the President of the United States, if we don't have good policy, we can't have success. When we think back just a few short months to pre-COVID, at that time, our economy was at historic levels of growth. We look at black, Hispanic, female, every minority homeownership, employment rates were at all-time highs, unemployment at all-time lows. The stock market was just breaking record after record after record. It was so historic. Then, due to the COVID-19 crisis, it just stopped.

Now we've seen some rebounds. I know you and I talked the other day, and it was a day that the market had climbed. I think it was the biggest growth in 40 years or something, a biggest one-day surge in 40 years. So, that gives us a lot of hope. And you mentioned that optimism that Ronald Reagan had, it gives us a lot of optimism for the future of our country. These are just things that we hope people will begin to look at and look at the positives, not just the perceived negatives. But as we look at how to rebuild this economy now that was so vibrant and booming, and then it had to stand still for a bit, what are some of your recommendations, your policy thoughts, your recommendations for business leaders and individuals?

Clara: Well, I would say there's no question that we're in a transition phase right now. I would say we want to be aware that it's going to take some time for some industries to really grow out of the deeply negatively impacted elements. The hospitality industry, the airline industry, and the like will probably have some stress going forward. The restaurant business will have some stress moving forward.

But I would say a couple of things. The last thing we need right now-- I'm going to dive into macro policy. The last thing we need right now are significant tax increases, property tax increases or state and local tax increases. I'm very concerned that after November, if we don't see a reelection element, I think changing the corporate tax reform bill in any way, I think, will be a devastating impact on the stock market. Because with so many industries having cut their profit margins because of the COVID impact, the last thing you need are corporate tax rates to go back up. This is going to be very, very harmful to the equity market.

The biggest problem I have with the Democratic Party's discussion of the stock market is, they think it's just the billionaires that are invested. They forget that there's $29 trillion in pension, retirement assets, mom and pop put their money away into nest eggs. We have millions of people invested in the stock market as well. This is a huge impact if the market is impacted negatively, Linda. We have to hammer home that point in a way that it impacts everyone.

Time and again, I hear the left say, “Oh, well, people want Trump reelected only because they care about the money.” Well, I care about the money because I'm very dependent on it to pay my rent, my mortgage, put food on the table. That rhetoric has to be addressed.

Linda: You talked about how so oftentimes liberal discussions revolve around the fact that it's like big business or rich people, whatever. But I read somewhere that millennials have been investing in the stock market in new ways because we have the tech technology where they can invest $1, they can invest $5, they can invest $10. Some of these programs, where they can begin investing with very, very small amounts, really encourages savings and investing at whatever level someone is. It's not just rich people or big business. This is important to everyone.

Clara: Particularly young people, Millennials, Gen X, because their lifespans will probably be increasing significantly.

Linda: Yes.

Clara: In the next 20 years, living to 100 may be a norm for many Americans. You have to learn how to invest at a young age. I think you have these fintech firms, like Betterment, Robinhood, Ellevest, they really encourage online investing in very small amounts at very low fees, Linda. Now there's a lot of volatility in the stock market, I do not want to deemphasize that. But the way you really compound your savings and the miracle of compounding is dependent on the time in the market, not market timing.

Young people investing over a 40-year lifespan really almost guarantees a significant return over time, regardless of the ups and downs, and most of the data really illustrates that we have a very low-interest rate environment that will probably be going lower. So, you have a two-year Treasury note yielding 20 basis points, that's not even a quarter of 1%, and most likely, those rates will be going down. I see equity investments as really the way for a long-term investor in a young phase to really go, or an older phase. I think that element is extremely important for us going forward. Having people understand that issue, I think, is really important because we probably won't see significant economic growth until 2021. I think really-- [crosstalk]

Linda: Right, after COVID. Yeah. And that's only really if we implement the same type of growth policies that we had prior to COVID. As I've said often in this podcast, the educational resources we provide to employees through their employers or whatever are nonpartisan. But we are unashamed about our support for limited government, free market, free enterprise principles that are pro-business, pro-growth [crosstalk] access. That’s how businesses grow, that is getting back to the fact of government providing the opportunity or the conditions in which prosperity can flourish. Those are the types of things.

If we look, you mentioned that the Democrats having a certain policy. And yes, they do. I'm just asking anybody who's listening right now that they would stop and look at the difference in the policies and then say, what are the end results? What have been the results under those types of policies, those more liberal policies in the past, and were people better off or have they been better off in the last three years pre-COVID?

The economy really took off. Jobs were coming back to America and even now, the whole buy American, hire American. This is fantastic. We're seeing communities be rebuilt as manufacturing, and even some new manufacturing opportunities as a result of COVID have come back to the US. We're seeing the need for us to not be dependent on foreign nations for our essential products. It's fine if we want to buy some nonessential products. It's fine, we live in a world economy, we understand that. But to be dependent on foreign nations for our medicines, for our energy, for our critical, critical needs, that's a matter of national security in my mind.

Clara: Yes, I couldn't agree more. I see certainly that transition continuing, Linda, over time. And as you pointed out, I think there's a lot that companies can do, because I very strongly believe private sector solutions are the answer [crosstalk] most of these issues. If they take an added emphasis, perhaps focusing on some of the minority employees, I think now's the best time for a minority employee to find jobs in the private sector, given emphasis on this. Be bold, go out there, go into whatever industry that interests you, and you probably have a very good shot. And then companies should help educate their employees on saving for retirement.

There is a disparity between white America and black and Hispanic America in terms of retirement savings. White Americans have an average of $150,000 in retirement savings, but black and Hispanics are $19,000, $25,000 in retirement savings. So, maybe making a difference in that equation, maybe an agenda, [crosstalk] I think that would be very, very good for everybody. Helping employees understand that-- and again, the more people that recognize they're invested in the market, the better the understanding of our policies, I think, will emerge.

Linda: Right. You bring up a good point about helping employers talk to their employees about these issues. I know I'm always encouraging employers to expose their employees to the Constitution because I truly believe that if people really understood the Constitution, they would appreciate and seek to protect their freedom and the freedom of others - their financial freedom, their personal religious freedom, their freedom of speech, everything. They would protect it more if they truly understood what it said. But as you talk about employers talking about investing and saving, that brings credibility to the employer.

Clara: Absolutely. It's a win-win.

Linda: It's a win-win and it helps the employer to create a dialogue and communication with the employee. Once the employee begins to see, “Wow, my employer actually cares whether or not I am financially stable. They actually care,” then it opens a dialog for more things. You can begin to talk about whether or not a certain regulatory policy influences your industry or whether a tax policy influences your industry. These things are just really important. I believe that these types of conversations will increase employee loyalty, engagement, and therefore retention, which gives a better ROI for the business owner.

Clara: No question about it. Obviously, I come from the financial industry, so that was just a part of our life. But I think, again, given the digital tools and all the tools that are out there now, other industries can provide almost the same type of educational benefits to their employees so that they learn about investing and stay focused on that.

Linda: Yeah, that is really great. As the Director of Senior Initiatives at FreedomWorks, you not only seek to help those who are seniors and maybe worried about protecting investments, they may be worried about catching up, maybe they're at a point where they lost everything at one point or they had a health crisis or maybe they just never learned and didn't have an opportunity to save for retirement, so they're at a point where they need to make some choices fast to take care of their later years. But with that, you're also working hard to educate younger people about how to prepare because hopefully, especially like you mentioned, lifespans are getting longer and longer, we want to make sure that these young people have the tools to prepare. So as in your role, as Director of Senior Initiatives, how do you span that age group or that whole age spectrum?

Clara: Correct. Well, in a way, it's different for young people. You have to be, I think, more creative. Mentioning retirement savings, in fact, I rarely use that word, I try to talk savings--


Linda: And that’s great.

Clara: A 28-year old is not thinking about retirement in anyway.

Linda: Well, I'm not 28 and I'm not thinking about retirement.

Clara: But a lot of people aren't. So, you try to be more creative with savings and building up a nest egg. Using words that help people. I think the COVID crisis may have added new energy to the dialogue, Linda, because all of a sudden, people were out of work. Many of them didn't have more than two or three weeks of savings. And given the severity of the outbreak, it wasn't clear when businesses were going to reopen and we are still in murky waters in several states in particular, but everyone is a little nervous.

My point is that really taking a reexamination of your nest egg and realizing what you may need to deal with another crisis. Because if anything, we live in a more volatile world than ever before. It doesn't mean that World War III is going to break out, but there'll be ups and downs. So, having that nest egg intact or something-- a sustainable nest egg is something that I'm working on to help people understand, and also help them understand that we are blessed with an incredibly strong economy. We can withstand a lot of mistakes, so that means stay steady when there's volatility in the marketplace. Don't panic. And let's make sure that you're seeking advice from the right places.

I think one of the things that's really worrisome for a lot of people is that when you turn on the news every day, they're actually focused on drama, because that's what really attracts the eyeballs. So, don't be unnecessarily alarmed or take hasty actions with the drama. Just think about the long term with these investments. We're really more or less hammering home these time-tested principles to people who do not have the support or the advisors. A lot of people don't have access to advisors, so helping them with educational aspects and tying it now to the COVID crisis and what can really happen and why policies impact or savings as well. [crosstalk] I'm working on.

Linda: Well, and policy affecting our incomes, this is just like an example. I've often said it's like an example on steroids, about helping people see that even as different states have had different policies on reopening or what they allowed certain businesses to do, how that affected the individuals in those states. I know our time is coming to a close, but I would like to just point out, that here in America, we have the right of private property. We have the opportunity to build our own nest egg, and the best way for individuals to be financially secure is to build that up and not to depend on the government.

For those who tell us we need to depend on the government for this, government cannot always do that. We've seen from history that when governments can no longer provide for their residents, their citizens, so much turmoil occurs and countries fall. We really need to focus and help people understand the blessings of living in America, where they can create their own financial futures.

Clara: Correct. And we need to do that now more than ever because pensions are likely not coming back. Global economy and the volatility will probably not make pensions a reality, so we have to invest in ourselves and our knowledge [crosstalk]. And also, again, you mentioned what's the age? What's the difference in talking to-- [crosstalk] A person in their 60s is probably thinking about when do I access social security? How do I really take a harder look at my expenses? A younger person has more time to make those decisions clearly.

I think one of the fallouts of COVID that may happen, Linda, is there will be geographic differences. You could see an exodus from the high-tax northeast states increasing to Florida, Nevada, Texas, the low-tax states as people take a hard look at their cost of living and what that means going forward. These are people in their late 50s, 60s and beyond that may change the economic conditions regionally.

Linda: Yeah, that's a really good point. We had talked before offline about just people leaving the cities too, not just for the cost of living but for the quality of life.

Clara: It's important for us to really stay positive about the opportunities ahead. When you look at what lies ahead, I think we have a lot to be thankful for. Let's not let the political clash and the media dynamic that seems to be very negative right now influence our overall optimism about what lies ahead in terms of innovation and, I think, good things.

Linda: Right. That's great. That optimism is so important. For anybody listening, if they'd like to reach out to you, could you provide your contact information?

Clara: Sure. You can reach me at the FreedomWorks Foundation website, freedomworks.org, or you can reach me at cdelvillar@freedomworks.org.

Linda: Easiest way is probably just to go to the website and search for her. So, feel free to reach out to Clara and ask any questions. Clara, thank you so much for joining me once again on the podcast. I look forward to the next time you're my guest. We just hope you have a wonderful day. To our listeners, we say thank you. Thank you, Clara.

Clara: Thanks, Linda.

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