As Goes the Cantaloupe

There are a myriad of choices in the way of fruit at our grocery store. I rate myself competent in the selection of those that advertise their condition, like a banana. If the banana’s skin is regulation yellow and doesn’t have brown and black spots, it’s probably going to be a pretty good banana.

There are other fruits that supposedly have signs that predict their condition. My track record of bringing home winners with this group is mixed. For example, I know that a rock hard avocado is a losing proposition, just as I know that an avocado with the consistency of a sponge passed its prime some time ago. A carefully selected, just the right amount of soft avocado can still ruin your day when you cut in to it and find that it’s rotten. Truth be told, I don’t really care about avocados. I do, however, care quite a bit about guacamole. A batch of rotten avocados is nature’s way of keeping me from my guacamole, and it hurts each and every time.

I bring all of this to your attention as there is a final category of fruit that, in my opinion, defies all speculation as to its quality. The champion of this group is, of course, the cantaloupe. I have been given all sorts of advice over the years as to the leading indicators of a good cantaloupe. At the insistence of these so-called experts, I have thumped many a cantaloupe and listened closely to the quality of the reverberation. I have gently shaken them (still not sure what that is supposed to accomplish) and, finally, I have sniffed them. To my trained nose, they do indeed smell like cantaloupes.

A few stores try to take some of the mystery out of it by cutting them in half and wrapping the exposed cantaloupe in plastic. This would work with an avocado, but the devious cantaloupe can’t be deciphered by looks, even on the inside. No, the only way to tell if you’ve got yourself a cantaloupe worth the effort is to actually take a bite. There are no shortcuts.

All of this talk of frustration reminds me of the most discussed, and perhaps the most vexing topic out there today: the fiscal cliff. I am asked on a daily basis what I think will happen with our taxes, our economy and our government. As many people significantly smarter than me have already stated, there’s really no way to tell. The fiscal cliff and all of the related debates are like one giant cantaloupe – we’re not going to know how we feel about it until we take it home and have that first bite.

Our apprehension over the coming conduct of our elected officials is a little bit ironic. After all, this is essentially the same cast of characters that made, or failed to make, the decisions that lead us to this dramatic cliff-hanger. We’ve seen them in action first hand, and if they were avocados it’s a sure bet that none of us would be eating guacamole anytime soon.

Other than the simple, but true advice to avoid panic, and continue diversify, there is probably not much that any of us can do until the final decisions are reached. It might help – a little – to remember that tax code changes affect the future, not the past. Regardless of what you may have heard, these discussions will not end with the seizure of all existing 401(k) and IRA assets. If we are indeed soon served the fiscal equivalent of a bad cantaloupe it will make for a lousy breakfast the following day, but it can’t go back and sour all of the meals we’ve enjoyed over the last 10+ years.

It is likely that much of what we’ve enjoyed in the way of breaks over the last 10+ years will indeed be trimmed or eliminated. The window may be closing, but we’ve all benefited from substantially higher deferral limits in our retirement plans, lower marginal tax rates, no phase-outs on deductions and increased tax credits. It might also help to recall that almost all of these tax breaks were passed because they included a “sunset” provision which would roll them back to the original levels — only to have the sunset later removed by our elected officials. Finally, please keep in mind that the original justification for the tax cuts was the presence of an actual surplus in our government’s coffers (the reduction in tax revenue was supposed to be offset by increased economic growth).

I know of no one, with the exception of Warren Buffett, who is eager to see a tax increase. I also know of no one that is particularly pleased with the performance of our elected officials. I have, for the record, given up on the dream bringing home a good cantaloupe. When I take that first bite, I’ll expect the worst and be pleasantly surprised with a better outcome. That approach might work for more than just cantaloupes.

*Originally published December, 2012.