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Google ‘buffett crony’ [new tab]
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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!
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| 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
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With the Obama nixing of the Keystone pipeline,
at least the Canadian oil will now be handled
by such a great lover of mankind.
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“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
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Unlike his movie counterpart, Buffett
has yet to learn to
let go ―
of government privilege that is.
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“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.
FINAL WORDS
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.
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