San Juan Mountains

San Juan Mountains
San Juan Mountains: Grenadier Range

Wednesday, March 2, 2016

Warren Buffet's Brilliance and Blindness

Last Saturday was the release date for a highly coveted annual report from one of Amerika's most famous people.  No, it was not the Oscars edition of People magazine, a magazine that had no photographs of black people in it I was told.  It was the annual letter to shareholders of Berkshire Hathaway.  For those of you who do not know, Berkshire Hathaway is Warren Buffet's holding company. Berkshire Hathaway has been responsible for turning many citizens of Omaha into millionaires.   The annual report is not exactly like most corporation's annual reports. Buffet includes a lot of home-spun humor and storytelling in his report.  This year's report was no different.  Let's talk about it for a while today.
Allow me to quote from Miraj Chokshi's article published in the The Washington Post about Buffet's letter:  "In his annual letter to shareholders, Berkshire Hathaway chairman Warren Buffet made a forceful argument that Americans should look to the future with optimism, despite the dour messages broadcast from the presidential campaign trail....'For 240 years it has been a terrible mistake to bet against America, and now is no time to start,' he said in the letter.  'America's golden goose of commerce and innovation will continue to lay more and larger eggs....The market excels at producing things people don't know they want.'  For example, Buffet noted that he never thought as a child that he would someday need a personal computer....Buffet noted that American economic output, per person, has grown tremendously over his lifetime. 'American GDP per capita is now about $56,000.  As I mentioned last year, that, in real terms, is a staggering six times the amount in 1930, the year I was born, a leap far beyond the wildest dreams of my parents or their contemporaries....This all powerful trend is certain to continue:  America's economic magic remains alive and well.'"  Thus spake the Oracle of Omaha.
Buffet is spot on when he writes optimistically about the economic future of the Socialist Democracy of Amerika.  The SDA economy is far too large to be destroyed by the current level of government attack against it.  There are far too many people who completely ignore the political realm of life who go to work day after day seeking to serve the people around them by making more and better goods and services.  He is also right on the mark when he observes that politicians major in the negatives.  No politician is ever going to come out and say what Buffet wrote in his report because it would make him superfluous.  Who would vote for a politician who says that everything is going just fine and should be left alone?  Politicians need victim classes and the free market eliminates those classes.  Political action, on the other hand, allows for the creation of hundreds of different victim classes, known generally as special interests, all of which clamor for the attention of the career politicians.  The politicians are then beseeched to make new laws to take the income and wealth of the rich, whoever they are, and give it to their class because, after all, they are victims in need of compensation.
Buffet's observations about the past and predictions about the future should give hope to any rational citizen in this immoral land.  Unfortunately there are very few rational citizens in this country.   Most of the Amerikan people are dedicated to pursuing their twin goals of envy and covetousness.  They will vote for career politicians who will take the wealth created by the productive class and give it to them.  In that way they can satisfy their covetousness by getting something for nothing from the government and they can satisfy their envy by punishing the productive folks around them for being productive.  It is the perfect system for sinful men.
Unfortunately, and despite all of Buffet's financial genius, he has never grasped the principle of personal and economic freedom.   As many of you probably know, Buffet is a tax and spend Democrat.  He supports Hillary.  He believes there should be a confiscatory tax on wealth transfers at the time of death.  In a word, he is a philosophical socialist.  His socialism was on full display in another comment he made in his letter.  I quote, "Though the pie to be shared by the next generation will be far larger than today's, how it will be divided will remain fiercely contentious.  Just as it is now the case, there will be struggles for the increased out put of goods and services...Congress will be the battlefield; money and votes will be the weapons.  Lobbying will remain a growth industry."  What a bizarrely contradictory and profoundly sad thing for Buffet to write.
Buffet recognizes that profit seeking businesses are responsible for the dramatic increase in wealth in this land.  Then he goes on  to describe that wealth via the socialistic "pie" analogy, as if that wealth just somehow popped into existence apart from the entrepreneurial activities of business people.  He knows better but his bias will not allow him to write about it.  Wealth does not come from nowhere.  It is created by people seeking to serve the needs and wants of other people.  Those who do that the best create the most wealth and become the most personally rich.  If anyone should know that fact it would be the richest man in Amerika.
Buffet also believes that it is good, right and proper for that pie to be "divided" by agents from the government.  Why should it be divided?  Why should it not belong to the people who baked it?  Buffet does not say.  He simply assumes, because of his socialistic bias, that government has the moral right and duty to intervene in the economy and divide up the pie that has just been created by the productive class and give it to the hundreds of ravenous victim classes calling out for more and more wealth they had nothing to do with creating.  Strangely, and accurately,  Buffet uses the terminology of warfare to describe the political process by which the wealth of the group that created it is taken from them, by majority vote and career politicians, and given to the politically protected victim classes.  Warren, it need not be this way!  You don't have to grant the government the legal authority to rob and pillage the productive.  You do not have to believe the propaganda being dispensed by the victim classes that the productive class is evil simply because it is productive, but you do anyway.  How very sad it all is.

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