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Warren Buffett seems to think that just because he’s one of the richest people in the world, he can defy economic principles with fluffy statements.
Indeed, TIME™’s January 23, 2012 cover article (‘The optimist’ [new tab]) is pretty much a fluff piece that further cements Buffett’s reputation as a selfless philanthropist. In actuality, he contributes nothing worthwhile to the discussion on America’s and the world’s political economy.
It appears that he is sincere in his convictions, but alas, self-deception is a critical component in deceiving others and getting one’s way. Such self-deception is not necessarily bad, except that government is Buffett’s tool of acquiring wealth.
And when I say ‘wealth,’ I mean not just monetary wealth but acclaim and prestige, the thrill of being on a moral pedestal.
WHAT A MODEST HOUSE! ERGO, GOVERNMENT IS GOOD!
|Sincerity and a taste for simplicity go a long way.|
Buffett’s inclination towards (relative) frugality is a strong bullet point under which modern liberals rally. From the premise of “You can get by with less consumption and simpler lifestyles,” they want us to jump to the conclusion that “coercive monopoly = effective charity.”
Government is never called a coercive monopoly though. If it were, people ― including the politicians and paid hacks themselves ― may begin to realize that the state is nothing more than a very established band of thieves.
The article’s writer Rana Foroohar lends a helping hand by speaking of “Darwinian capitalism,” and we’re supposed to believe that laissez faire and not cronyism is what has brought about income disparities.
Let’s take a look at several choice fluffy statements from Buffett.
GOVERNMENT AS CUSHION TO THE LESS FORTUNATE
With the Obama nixing of the Keystone pipeline,
at least the Canadian oil will now be handled
by such a great lover of mankind.
“We need a tax system that essentially takes very good care of the people who just really aren’t as well adapted to the market system but are nevertheless doing useful things in society.”
Some things aren’t necessarily paid for with money. People exchange ideas and sentiments all the time without receiving monetary compensation. In that sense, a lot of what is ‘useful’ is not covered by the monetary system.
However, when we are talking about economic goods, money and prices are precisely the means by which ‘usefulness’ is determined. Is the market system necessarily disadvantageous to the less entrepreneurial? In the sense that they may not afford more expensive goods and services, yes. But does this mean other more affordable alternatives are not available? Or that charitable entities are barred from collection and distribution?
Why should we assume that government, acting as a monopolistic charity at best, is more effective than charities competing for the hearts and minds of the more materially fortunate? If we are to appreciate freedom even by a single degree, we would conclude that competition is more viable than monopoly, regardless of sector.
BUFFETT’S CHARITABILITY IS A TESTAMENT TO VOLUNTARY TRADE
Unlike his movie counterpart, Buffett
has yet to learn to let go ―
of government privilege that is.
“The money itself is all going to charity.”
So Buffett says about what’s going to happen to all his wealth when he dies. It sounds like sourgraping to point out the tax deductions he gets from all his benevolence, or how high tax rates weaken his competition. I myself would like to believe he’s sincere. Yet this doesn’t mean he’s trading all his billions for nothing.
The whole principle of monetary exchange is that one derives more satisfaction from a non-monetary thing relative to certain units of money. What non-monetary thing can Buffett be getting? A clear conscience? Moral superiority? A ticket to heaven? Being able to put free-market advocates in their place? I don’t think even Buffett knows. But one thing is certain: he feels good about what he’s doing, and notwithstanding his being a crony, it’s a voluntary transaction.
Just because money isn’t everything doesn’t mean this lesson has to be taught by elected thugs.
BAD PHILOSOPHY, WORSE METHODOLOGY
“I find the argument that we need lower taxes to create more jobs mystifying, because we’ve had the lowest taxes in this decade and about the worst job creation ever.”
As if these are the only two factors to consider in studying an economy. Is it then logical to state that low taxes --> unemployment and high taxes --> low unemployment? The utter disregard of actual conditions in the world, in particular, the completely corrupt banking system, is just plain careless.
And has anyone ever advocated low taxes and deficit spending to lower unemployment?... Come to think of it, Keynesians love deficit spending. Keynesianism is a paradigm in which article writer Foroohar herself and most economists, including advisors to policymakers, are hopelessly immersed.
RHETORIC WITHOUT LOGIC
“It’s like [what] Martin Luther King said. We aren’t trying to change the heart. We’re trying to restrain the heartless.”
Even I’m amazed at the catchiness of the statement.
And how exactly are such ‘heartless’ people to be restrained? The how is so important, yet do-gooders are so quick to look automatically to government to do such restraining.
What about guilt trips? Boycotts? Shame campaigns? Even these would be better than threatening a person’s life as a means of getting them to surrender their property.
Yet I wouldn’t advocate even these. One person’s enjoyment of wealth does not necessarily make for another’s suffering.
Disparity in resources, or for that matter the lack of opportunity to interact without suffering prejudice, is compounded when the processes by which wealth is created are hindered so as to favor the politically privileged.
Being wealthy does not necessarily mean one oppresses others. Such oppression can only happen when mentalities are still so immature so as to support the idea of violence as a means to wealth creation. The government-as-solution mentality is the problem.
BULLISH ON AMERICA
For all his investing savvy, Buffett doesn’t understand anything about business cycles. Hence his reported bullishness. He thinks that if Obama continues doubling the national debt every couple of years, the upcoming depression could be halted.
Forget that he’s banking on (pun intended) an easy-money policy to keep his banks afloat. Or that his partly-owned ratings agencies were a part of the problem. Or that he’s got enough tools to make money even in depressions. It’s simply moronic to expect the US’ ‘empire of debt’ to continue.
Buffett’s cronyism has been explored elsewhere, and so I leave it to you to do a Google search [new tab] on the matter.
What concerns me most is that he wins over people with his outright bad economics, in the name of love for one’s fellow man, or worse yet, love for government.
But just like government, Buffett, nice old ‘Up’ man himself and all, is part of the problem, a regular ‘one-percenter’ if ever there was one. His recent appearance on SLIME™ Magazine, as Doug Casey calls it, is an affirmation of this.