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Lucky babies
and elections
By Jim Surber
I was struck by a recent headline that seemed radically different from
normal.
A pronouncement from Warren Buffett in his annual letter to
Berkshire-Hathaway shareholders reads in part: "It’s an election year,
and candidates can’t stop speaking about our country’s problems (which,
of course, only they can solve)," Buffett further writes. "As a result
of this negative drumbeat many Americans now believe that their
children will not live as well as they themselves do. That view is dead
wrong: The babies being born in America today are the luckiest crop in
history."
Mr. Buffett is one of the world’s richest men with an estimated wealth
of over $60 billion. A perpetual optimist, at age 85, he always
maintains a powerfully upbeat attitude.
This is perfectly explainable since (except in politics) people never
answer the call of, “Our situation is hopeless. Follow me.”
Marko Kolanovic of the Wall Street giant J.P. Morgan, is known as a top
market technician. He quickly jumped into the fray, with both social
and political commentary, to demolish the comment about the lucky
babies: “This statement has been used recently in the context of the
outlook for the US economy and upcoming US presidential elections. The
statement encapsulates a positive view on the US economy and downplays
prospects of significant political changes in the US.”
He did not address the other part of Buffett’s statement. What of the
statement where the candidates continually harp on the nation’s
problems, which only they can solve?
Both major parties have held the presidency and enjoyed majorities in
the Congress, but have totally failed to even moderately address the
problems continually cited by their candidates. Regardless of the
severity that we perceive of the country’s problems, shouldn’t we be
smart enough by now to realize that they will not be improved, much
less eliminated by politicians?
Some might argue that many Americans now recognize the futility of
progress through politics.
I suppose that if I had a dollar for every time Warren Buffett has
said, “Don't bet against America,” I would have enough money to bet
against America. But what good would that do anybody?
The billionaire also said, "For 240 years it's been a terrible mistake
to bet against America, and now is no time to start." It is pretty hard
to argue with that statement. Effective leaders always figure out how
to be optimistic while simultaneously confronting reality, regardless
of the circumstances.
He further justifies the lucky babies by stating, “American GDP per
capita is now about $56,000. As I mentioned last year that – in real
terms – is a staggering six times the amount in 1930, the year I was
born, a leap far beyond the wildest dreams of my parents or their
contemporaries. U.S. citizens are not intrinsically more intelligent
today, nor do they work harder than did Americans in 1930. Rather, they
work far more efficiently and thereby produce far more. This
all-powerful trend is certain to continue: America’s economic magic
remains alive and well.”
Financial statistics are dangerous. Considering only Mr. Buffett and I,
we have an average wealth of $30 billion (be sure to note his wealth
given in the third paragraph).
What of America’s surging entitlement spending and its seemingly
intractable debt? Politicians and pundits continually speak of pending
insolvency, and the inability of the federal government to meet its
future obligations. Buffett is obviously hearing none of it.
Wouldn’t it be great if, years from now, babies now born in the US turn
out to be the luckiest generation in history?
Whether this happens due to our nation’s “all-powerful trend,” or
because we turn out to be the “healthiest horse in the glue factory”
makes no difference.
For as long as I can remember, people have predicted that their
children would have it worse than them.
In this disturbing election season, the threats and doomsday
predictions will drag on for about another eight months, Buffet’s
optimism and prediction is a breath of fresh air.
Shouldn’t we all hope that he is right?
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