Buffett says government is doing the right things

Good intelligent argument. To bad that seems to put you in the minority.

Kind of you to say so -- but I have learned that there are many very bright people who frequent this site. Some are so smart, in fact, that I don't even feel adequately qualified to say just how smare they ARE -- kind of like a precocious pre-school finger painter trying to distinguish between the talents of Van Gogh and Renoir.

They don't necessarily comment on a daily basis, and they may pick a very small number of articles that are of particular interest. Perhaps that is a good thing -- gives the rest of us a little sunlight in which to grow...

you're making the same argument that president obama made during the campaign: certain voters "cling to their guns and religion" at the expense of their economic interests.

Well, tbowman, the first time I suggested this notion was when I was a columnist for my college newspaper. Since Obama and I are the same age, he would have been 19 at the time. Whether his campaign position was established by then is difficult to know -- but I suspect the idea was at least a decade old even back then...

While I doubt that the old saw that "there is nothing new under the sun is ENTIRELY true, I have learned somewhat to my chagrin over the years that the percentage of ideas that truly ARE original is almost infinitesimally small -- and approaches zero among 19-year-olds.

i was agreeing with you, sorry if that wasn't clear ;-)

Bingo!!! LarzNero, you nailed it... big-up.

personal note: your icon is great!

Thanks... it represents hard-times. LOL

I agree with most everything you've said, but not this. It's not a good idea to try to level the playing field completely. It's good for the American consumer to be able to get goods cheaper. Trade is a good thing because it allows people to leverage their strengths. If China can produce cheaper shoes and socks, we should buy those and produce things that they can not produce cheaper, like wind turbines, airplanes, MRI machines, sophisticated computer software, etc.

Trade is how we've achieved everything good in modern society. Imagine if every small town had to produce their own clothes, furniture, cars, everything. There wouldn't be much room for advancement.

Free trade can be a frightening prospect because it demands adaptation and strong education, but it's a net positive. I strongly suggest reading Thomas Friedman's "The World is Flat".

Tariffs can still be a useful thing, but should only be used to level the playing field against other tariffs. So, your last 2 sentences are right on. If Korea is charging tariffs on our goods we must charge tariffs on theirs, but the ideal situation is no tariffs on anything.

We can't make anything cheaper than the Chinese if we expect to make a living wage. If all American workers want to drop down to below minimum wage salaries, then we can compete without tariffs. I don't know any American who wants to go that route.

Not mentioned a lot but production in China also means lower pollution in the US. Also, it has a calming effect in international relations between our countries. China and the US are much less likely to go to war if both are heavy trade partners. For better or worse, the US and China need to have mutual stability in both countries to maintain the status quo. Like many countries throughout the world, China is able to limit demands for social rights by having a strong economy. I spent a bunch of time in Dubai. They have extremely strict laws governing criticisms of the government yet people line up to get into the country because it is flushed with jobs. People will put up with a lot more shit if they have a home and food on their table.

Oh yeah, we've all seen how well the market does on its own. It was as soon as the government let the "invisible hand" of the market work its magic that we started to see bigger and bigger problems arising. Since the 70's we've been deregulating and we've continued to see more tumultuous economic patterns, until now, where our pattern of deregulation has led us, into, at the very least a recession, or what is much more likely, a depression. The system is broken and self-interested people in power are exploiting that situation to its fullest extent. We need to fix the system. And that means more rules to stop these kinds of people from screwing everyone over for their own profit ever again.

what do you recommend? a monarchy? anarchy?

He was the only one advocating calm and reason when the economic crisis kicked off. He said he was going to buy stock while it was cheap. If only I had the where with all to follow his advice.

Riiiight. Warren Buffet doesn't know what he's talking about but you do. He should start watching Hannity so he can be a smart economist too.

Anyone who follows everything Warren Buffet says is just a sheep. It's simple economics and history that proves that Warren is wrong. I don't have to, but ignorant people do have to find out. I don't know what Hannity's viewpoint is on the economy, but if he believe the government is going the wrong way then yes, you should trust in that viewpoint. What he believes the reason is and how we'll get out of it, I don't know what he says there. So, until I know that I wouldn't say listen to him.

Come on Rock, at least provide fair commentary.

To say that history proves this Buffet (or this course action) wrong is to ignore just as many historical examples where government intervention was the correct action as there are examples where it was a wrong action.

In short, the best balanced answer I've seen (after reviewing far far too many sources) is that there are some correct actions and some probably not correct actions.

But, your view may differ. I'd like to see some solid and theoretically based reasoning from you.

cybex,

Fair enough. I guess i get caught up in giving what I get. When someone else responds without any examples to back up their statement I give in kind sometimes. It seems that I've given my reason every time I see this same argument come up for a year or more now on many other articles that between some of the other posters here all know each others viewpoints and we don't bother anymore. Occassionally, we'll see a new poster comment on those similar topics and sometimes I just get exasperated at having to explain myself again. It's almost like I should have a boiler plate explanation and keep that handy for copying and pasting.

Good post!

"The greed that went on during the last 2 decades is shameful."

Agreed. People love to find something to blame if something goes wrong. In this case everyone is ganging up on the banks but the true source of the recession is THE PEOPLE. You can claim ignorance as much as you want but the signs of a collapse in the housing market were there.

Its funny how the older i get the more i can appreciate just how intelligent and frugal my parents are. I can remember a few years back my dad telling me about all the debt people love to rack up on their credit cards. Hell my parents even saw this housing collapse coming in advance but they are now stuck dealing with the mess left by the rest of the population.

No it still makes perfect sense to worry about the debt.

It's just that it doesn't matter as much now because we're so fucked and spending is the only option.

I am not sure if I understand: Won't everybody benefit from a better economy?

The bulk of this article is with respect to the stock market. Many, many people make the mistake of assuming that if the market is good, the economy is good. Right now, the market is stable. But we are still losing 650k jobs per month, which is a much greater indication of how the economy is doing than the market. The market is an indication of how investors are doing and how many people are investing, which is an aspect of the economy. People working is a far more accurate aspect.

I am not sure it is accurate to separate the two. For example, if company X is about to shed another 10k jobs, then company X's is assumed to be doing poorly and the stock declines. If this happens at several firms, the market as a whole declines.
Furthermore, employment is typically regarded as a lagging indicator, which under most conditions suggests stock markets a better predictive indicators for the economy than unemployment figures.
I do not disagree with you that a decline in employment significantly beyond analysts' expectations will increase uncertainty about the welfare of the economy and further depress gdp output. But in either case, a larger stock market will benefit everyone for more reasons than I have patience to list.

But the stock market can also do well artificially for short periods of time, without seeing significant growth in other areas. What we need specifically is a long term solution that starts from the foundations up: the hard-working middle and lower class citizens need their finances to be protected and well looked after by their government. Because if the government doesn't do it, who will?

Yeah, look at short selling. It makes the market look good, but can be a nightmare to the long term health of the economy. Short sellers can artifically destroy a stocks value just by hedging a bet that the stock is going to go down and targeting it with bad press. This can have terrible results to the company involved.

Not to say that short selling of stock is necessarily always a bad thing. With the SEC seemingly unable or unwilling to do it's job in routing out fraud, it is often the short sellers that find it. They noticed Tyco and Eron's mess months before the SEC and the media did. And they made a shit ton of money on it.