Warren Buffett, tells us more!

I Think Buffett is for Buffett.

Buffett is a smart man, but as you say, he does not have all the answers and throwing more money at the problem is certainly not a viable solution. If an answer exists, it will come from the G20. The entire situation is precarious and may be well based on the whims of nature. All focus is on the economy, the dealings of Wall St. and London and in doing, ignore the basics. Some of the things that people choose to forget or ignore are the changes in population, demographics and diet. Yes, I said diet. The dietary changes were brought about by changes in economics. Rice to wheat in some countries, and in doing, rice became an export to those below - those that were at sustanance levels. It is economics. It is money. It is also a major problem if this particular piece of commerce gets screwed up. Check the grain markets if you beg to differ.
Warren has been in the ivory tower too long and this is more Jay Gould country.

Why do you and everyone else continue to listen to old white males who always seem to have an agenda just beneath their prattle. When they were younger there at least was a subtly in their prognostications. They are now reminiscent of vaudeville magicians whose acts are just old and tired and worse, obvious. The market is overvalued. There are a pile of companies that need to go the way of buffalo. We need another stimulus like Custer needed another Indian. It is time for the financial world to feel the pain of the auto world. It is time to clean house and redecorate our economy with new curtains and new furniture. Get it?

It is curious how Mr. Buffett could become so rich with such a poor understanding of economics. If government could make a society wealthy, then the old Soviet Union would not have collapsed and people would not be risking their lives attempting to leave Cuba.

Everything government touches, it screws up. Government should be pared back until it is constrained to abide by those powers given it under the Constitution. Get government out of education, out of health care, out of business matters, and take the power to hand out goodies from politicians. Otherwise, we are heading for bankruptcy as a nation.

BTW, if Buffett is so convinced that government works, then he is free to donate most of his personal fortune to Uncle Sam. Like most liberals and politicians, though, he wants the little people to carry the burdens. Let politicians be covered by government health care and see how many are eager to implement it.

Anytime you have a major problem, you have a million people who all think they have solutions but not all problems are really amenable to simple solutions as there are often unintended consequences to things that sound pretty good in discussion stages. Generally, there seems to be agreement about the need for stimulus but a hog wild approach can have bad effects. Money channelled to social security recipients may not stimulate much economic activity, extending unemployment benefits may also extend job shortages etc. etc. Stimulus worked in the US in the past because and in China now because infrastructure projects like building highways led to greater economic progress both in the short and long term (and probably saved lives as well as those who recall swerving on old gravel roads might attest). Now that the infrastructure is built in most developed countries there isn't going to be the impact. Maintenance of roads and bridges, though necessary does not have that kind of economic impact. Programs like "cash for clunkers" may be well-intentioned but are adding to wealth destruction (waste) at a time when the country does not need to lose any more wealth (the "clunkers" will be crushed and hence wasted while being replaced by products which may not provide much energy savings). Aid programs similarly may fall short of providing more than stopgaps that favor certain industries. Some programs-- like increased food stamps and the tax credit for new home buyers-- have been beneficial in stimulating economic activity though and a true stimulus program should be designed primarily to target such areas. In the end though, there may not be any simple way out of this-- other than the economy's own ability to lumber forward over time.

WL & MS,

Thank you for sharing your thoughts in such detail. I am confident others will benefit from your ideas. You both shared more detail about your views, in a few words, than my pal Warren did, which is what stimulated this post.

Paul & Pat,

I do not share your view that Buffett is over the hill or does not understand economics. I understand your sarcasm, and sometimes venture there myself, but I am quite confident that Mr. Buffet understands economics and fiscal policy very well.

Another stimulous package equals more debt which in turn equals more foreign ownership of North American companies - commodities and resources. China and other foreign countries continue to gain a stronger position with each passing day. Read the news folks, it's happening.

http://www.mutualfundwealth.com/

Doug,

100% correct! I have discussed many times how our trade imbalance leads to more and more foreign ownership in the US, until we find ourselves in the position of being renters in our own country -- renting of foreign owned property means the rate of our demise would increase ever more rapidly -- think of it as reverse or negative compounding of our liabilities.