Are you saying that Warren Buffet has no economic sense?
Serious?
He thinks he should pay higher taxes, so he’s got some moron in him somewhere.
He thinks he should pay higher taxes, so he’s got some moron in him somewhere.
Yep. That’s in fact one of the things I was alluding to.
he nonetheless recognizes what is occuring right now within the context of the current system, which suits his needs as an investor well.
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Is that the context from which we are making statements here? As investors?
No, this is a philosophy forum. The purpose here is to identify the proper causes and solutions to the problems. In the context of this forum, Buffet is wrong, wrong, wrong. “Trade deficits” are not the problem and his statements only serve to perpetuate Keynesian idiocy.
He thinks he should pay higher taxes, so he’s got some moron in him somewhere.
Well, it means that he’s got some socialist in him anyhow. That doesn’t quite make him a moron.
And it certainly doesn’t mean he has no economic sense.
Is that the context from which we are making statements here? As investors?
The context here is reality. The point of economic theories is to predict reality, not to discuss how people ought to act. Warren Buffet may be wrong philosophically about some things, but he obviously is very talented in predicting future trends.
Well, it means that he’s got some socialist in him anyhow. That doesn’t quite make him a moron.
Hmm… I don’t know about that one.
The context here is reality. The point of economic theories is to predict reality, not to discuss how people ought to act. Warren Buffet may be wrong philosophically about some things, but he obviously is very talented in predicting future trends.
I’ve already been over your rejection of the Objectivist theory of history. Apparently, you don’t accept the importance of philosophy in other areas as well. I’d say just read the philosophy and see if it doesn’t change your mind.
The central bank debt-as-money system may come apart soon. Moody’s apparantly may cut debt ratings on the Federal Government within the next few years if it can’t control itself.
The central bank debt-as-money system may come apart soon. Moody’s apparantly may cut debt ratings on the Federal Government within the next few years if it can’t control itself.
This does not mean the system will come apart. It removes one of the factors that underlie the current account deficit. Firstly, the trust that foreigners place in the US government’s creditworthiness and in the US $ has to be seen relative to other options. Given the way Europe, India and China are going, the US will probably have less of an edge in this area, even though a collapse is highly unlikely. To the extent that this change decreases the relative desire to hold dollars and US government debt, it will tend to push down the capital account surplus, thereby also pushing down the current account deficit. This would be an example of a lowering of the trade deficit being symptomatic of the US appearing less desirable to foreigners.
This does not mean the system will come apart. It removes one of the factors that underlie the current account deficit. Firstly, the trust that foreigners place in the US government’s creditworthiness and in the US $ has to be seen relative to other options. Given the way Europe, India and China are going, the US will probably have less of an edge in this area, even though a collapse is highly unlikely. To the extent that this change decreases the relative desire to hold dollars and US government debt, it will tend to push down the capital account surplus, thereby also pushing down the current account deficit. This would be an example of a lowering of the trade deficit being symptomatic of the US appearing less desirable to foreigners.
It doesn’t mean the system will necessarily come apart, but I am simply stating it may. The rest of world accepts US dollars in much the same way Gold was accepted during other historical eras. Oil is denominated in dollars, effectively linking the two. With the dollar slipping in value because of the Federal Reserve’s printing and the US government’s welfare state growing out of control, OPEC countries are becoming less enchanted with the prospect of receiving revenues in dollars. There is a limit to demand for the dollar, and a downgrade of US debt ratings can only contribute to limiting that demand. If OPEC decides to switch the denomination of a crude oil barrel from the dollar to…the euro for example, it would put great inflationary pressure on our economy. There is nothing the government can do within the current system to prevent a problem of this nature from occuring, other than switching to a full gold standard and abolishing the current banking system. It is possible that, when faced with the prospect of rampant inflation and a worthless currency, the American people may come to accept the necessity of the gold standard, and I am hopeful that there could be some sort of change in the financial system.
…There is nothing the government can do within the current system to prevent a problem of this nature from occuring, other than switching to a full gold standard and abolishing the current banking system…
If the government were to curtail spending, and do something to curb future spending on “entitlements”, there would be little reason for people to lose faith in the $. It would be different if some other huge country were to adopt a gold standard; but, as things are, all it takes is to be relatively sound. That is how the U.S. has kept it’s position for decades, without a gold standard. I agree, though, that the U.S. loses its relative edge with every decade.
I agree with the basic point you’re making, that if OPEC and others started to use other currencies, or if the US debt was downgraded, we would see a reversal, with the “exported” dollars coming back to the U.S. to cause a price-rise.
Other than trust in the relative fiscal and monetary discipline of the U.S. government, another extremely important factor (perhaps more important) is that investors trust U.S. private investment channels. The U.S. boasts a rule of law and a degree of freedom that is not matched by other countries. This makes the U.S. a favorable destination for investment dollars, raising the capital account surplus and the trade deficit. Here too, each passing decade will see an erosion of the U.S.'s relative advantage.
The U.S. has long been an investment magnet – better government, better rule of law – and still retains it’s edge. Even while the U.S. has slowly increased regulation over the decades, it has still retained the advantage, because Europe regulated even more, and China and India were communist/socialist, going from bad to worse. This led to a net investment (capital account) surplus, that was balanced by a net trade (current account) deficit. Now, in the last decade or so, there have been radical changes in China and India. These economies will probably head to the European model, with mixed economies that are much more free than their past. They will likely stay less attractive (in terms of freedom and rule of law) compared to the U.S.. Still, even though they may never close the gap with the U.S., they will narrow it significantly.
For the U.S., the solution is to become an even more attractive place for business. Unfortunately, confronted with this erosion of supremacy, people in the U.S. might fall back on the wrong “solutions”. Already, we see increased calls for protectionism, and an anti-immigrant feeling that is symptomatic of a defensive, self-doubting attitude. Therefore, the odds are that the U.S. will slowly move from a clear top dog to more of a “first among equals”. This can take a long time, because the U.S. already has a huge lead.
However, in the context of this thread, such a reversal will (ceteris paribus) be accompanied by a reduction in the trade deficit.
I’ve already been over your rejection of the Objectivist theory of history. Apparently, you don’t accept the importance of philosophy in other areas as well. I’d say just read the philosophy and see if it doesn’t change your mind.
Last I checked this philosophy is supposed to be about reality.
From that article:
… Chinese and Arabs are grabbing U.S. infrastructure at a rapid pace…
…Just China’s $1 trillion on hand alone … is enough to buy a controlling interest in all 30 of the Dow Jones industrials…
Isn’t that something to be worried about? If not, why not.
(my concern is rooted in the fact that American government is not exactly an Objectivist government).
I would like to hear what you think.
Last I checked this philosophy is supposed to be about reality.
All I can say is… it is. Not empiricist, concrete-bound reality, but the actual reality. The reality described by Objectivism - the one in which philosophy is a prime mover - that is the reality in which we live.
Isn’t [Chinese and Arabs are grabbing U.S. infrastructure at a rapid pace] something to be worried about? If not, why not.
There are two parts to this. One is the nature of the owners; the second is the size of these foreign inflows (“grabs”).
Nature of the investments: These owners are typically governments or people who are just like governments (in the sense they run their countries like monarchs). These governments aren’t exactly trustworthy friends. There is also a risk that some mullah will take over some of these countries some day, and control some of these assets. So, there is some security risk involved. This risk is fairly independent of the size, in the sense that relatively small sums (just a few tens of billion dollars) can buy control in U.S. companies that would be considered a security risk. Ostensibly, the government has some way to vet such investments. Many of the really large and public investments by these countries are not in areas that raise any security issues, and appear to be business investments with ordinary business objectives – e.g. the recent huge investments in Citibank and Merrill Lynch.
Size of the investments: While the numbers are huge (net inflows of $600bn - $800bn), they are dwarfed by the total size of the U.S. economy (total wealth in the $70,000bn range and rising by over $1500bn every year).
[Caveat: All numbers in this area are merely approximations.]
All I can say is… it is. Not empiricist, concrete-bound reality, but the actual reality. The reality described by Objectivism - the one in which philosophy is a prime mover - that is the reality in which we live.
There is only one objective reality. And it is not a “reality as described by Objectivism” nor a “empiricist, concrete-bound reality”. Reality simply is.
He thinks he should pay higher taxes, so he’s got some moron in him somewhere.
There’s no moron here, just a wannabe tyrant. Buffett is saying this because he doesn’t need to rise to through the ranks to get his. He has his and he’s willing to pay extra to keep the rest of us down. There are three types of collectivists, those who want to rule, those who want to be ruled, and those who want both (academia).
Buffett is saying this because he doesn’t need to rise to through the ranks to get his. He has his and he’s willing to pay extra to keep the rest of us down.
Well I mean, he doesn’t have to rise through the ranks because he already did. And in any case what he said was that the wealthiest people should pay extra – which doesn’t normally include people that are “rising through the ranks”.
There is only one objective reality. And it is not a “reality as described by Objectivism” nor a “empiricist, concrete-bound reality”. Reality simply is.
Yes, that’s what I said. And Objectivism correctly describes it, while your methods do not.
Well I mean, he doesn’t have to rise through the ranks because he already did. And in any case what he said was that the wealthiest people should pay extra – which doesn’t normally include people that are “rising through the ranks”.
I see you understand the concretes. Going to the conceptual level, you do agree that it steepens the slope for everyone below him, right?
This is altruism unmasked - Buffett, the great humanitarian, wants to give more to the IRS. That’s such a great and noble thing for him to do, therefore, let’s make all rich people give more. Thus the false concept of altruism, i.e., giving willingly to that which you value, is warped into the true concept of altruism, i.e., an unaccountable gov’t taking from those who produce and giving it whatever it whims (or whatever profits the pull-mongers). And thus, the professed love of man (philanthropy) is revealed as the hatred of man.
If Buffett wants to give more to the federal government to squander on pork and payoffs, then he’s welcome to it. Less for the rest of us to pay. While he’s at it, maybe he can convince Soros, who made all of his money off the blunders of central planners, to give, too. There’s another wannabe tyrant waiting to rule.
BTW, just curious, I assume you have a job. Is the man who created that job, wealthy?
I assume you own a house, a car, a television (etc.) are the men who created that house, car and television, wealthy?
… Buffett … Soros, …
Buffet and Soros are wrong. However, your psychologizing accusation about them – assuming that they want to put others down and rule etc. – is unsubstantiated. I don’t want to take the discussion off topic; but, after multiple posts saying this, I just had to point it out.
Isn’t that something to be worried about? If not, why not.
(my concern is rooted in the fact that American government is not exactly an Objectivist government).
I would like to hear what you think.
In my estimation, it is something to be wary of, although I am certainly not losing sleep every night because of it. As you indicated, my concern is also rooted in the fact that the American government is not an Objectivist government. If America embraced true laissez-faire policy, and America and the nations of the world were on a true gold standard, I would have very little concern about it. Nevertheless, in the context of today’s policies, it seems as if each soverign wealth investment needs to be looked at seperately to determine if there is a security threat posed by the investment. In my judgement, with the Dubai Ports deal, there was obvious security concern and reason to stop the deal from occuring. Now, I certainly understand that free-trade and the free flow of capital is important for all countries of the world. But I am strongly opposed to the nationalization of private industry by our government. So I am, of course, skeptical of any attempt to nationalize private industry by a foreign government.