patrick.net

In Outer Wingnuttia, the greatest sin a man can commit is being wealthy while liberal.

Why do Conservatarians hate success? Why the class warfare?

HydroCabron says

In Outer Wingnuttia, the greatest sin a man can commit is being wealthy while liberal.

Why do Conservatarians hate success? Why the class warfare?

What I found interesting about this article had nothing to do with Buffet's success, but rather how far from his father's ideals he strayed. It is the WHY? that fascinates me.

His father was also successful by any measure (though not a billionaire) so the article isn't taking sides in that regard. I believe the point Weingarten is trying to make in the article is that Warren became successful through crony capitalist ventures, whereas his father stuck to his libertarian principles through out his life.

It is the contrast between their individual philosophies and ethics that makes the comparison so interesting.

darlag says

how far from his father's ideals he strayed. It is the WHY? that fascinates me.

Buffett spent his early career in New York City. It was probably this that inured him to the more conventional views of a public-private nexus managing the money supply and some aspects of the economy. Buffett also ran screaming from NY once he learned how unethical and soulless Wall Street is.

So much experience in the real world may have made him skeptical of simple-rules, top-down praxeology. Like Marxism, Austrian economics is very much an armchair theory of human behavior. Warren Buffet seems to lack an interest in abstract reasoning for its own sake. He tends toward a philosophy best described as "This is how the world is - now how can I profit from it?"

An awful lot of prominent and successful people have rejected nearly everything their parents believed. Buffett doing so would not be a surprise.

I would also add that Buffett manages a holding company which is funded by a great deal of other people's money. It is his responsibility as an officer to maximize profits. Since so many defend oil companies for poisoning streams, on the grounds that the only responsibility of management is to the shareholders and that ethics should not be the concern of corporate officers, I think that Buffet's relatively clean ethical record, in light of this, is actually remarkable.

HydroCabron says

An awful lot of prominent and successful people have rejected nearly everything their parents believed. Buffett doing so would not be a surprise.

Agreed. And there's no evidence I have seen that WB ever had strong Austrian/libertarian leanings.

Another interesting study is Alan Greenspan. He was definitely a card-carrying Austrian, gold standard bearer of a libertarian. He wrote an incredible essay on the need for a gold standard called "Gold and Economic Freedom"

http://www.globaldeflationnews.com/wp-content/uploads/2014/01/gold_and_economic_freedom.pdf

“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. …The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.”

He was in a close circle of friends of objectivist Ayn Rand. He wrote the above essay for her Objectivist Newsletter.

But it appears his Austrian leanings switched sides when he began to work for the government under Gerald Ford as the Chairman of the Council of Economic Advisors. I personally think he is _conflicted_ even today, but he has waded way too deep into the Keynesian swamp to ever find his way back to Austrian soil.

A little Greenspan history for those interested:

http://www.globaldeflationnews.com/what-caused-a-brilliant-young-economist-to-veer-so-far-from-his-austrian-school-roots-will-alan-greenspan-go-to-his-grave-wishing-he-had-listened-to-his-former-self/

Still, I think George Soros is way cooler than Warren Buffett. It is almost much less likely that a trader's consistent success can be attributed to luck. On the other hand, a successful "long-term" investor who makes few transactions is not necessarily brilliant.

HydroCabron says

Like Marxism, Austrian economics is very much an armchair theory of human behavior.

If Armchair means laissez-faire in your mind then I understand your use of the word. But Austrians were devout anti-Marxist/Communist/socialist so I don't quite know where you are coming from there, Hayek's 'Road to Serfdom' being a good example.

The Austrian School was well-accepted and the prevailing economic philosophy until Keynes "Theory of Money and Credit" was published in 1936. Keynes idea that government should take a more hands-on role (so long laissez-faire) in monetary and fiscal policy is the catalyst for government's latching on to Keynesianism. What politician wouldn't want to help slice the pie directly versus just jaw-bone about how it should be done.

Unfortunately, Keynes, however innocently or unintentionally, created the perfect model for the crony capitalist state we live in today.

I used to like the Austrian theory of economics. Now I am just anti-theory.

Nassim Taleb is the one of the few respectable intellectuals in this general area. He is right to despise economists.

The only thing good about Keynes is his beauty contest.

Peter P says

Still, I think George Soros is way cooler than Warren Buffett.

I read recently that Soros has put 17% of his fortune into SPY puts. That's over $2 billion dollars. I'm going out on a limb and saying he doesn't have much faith in the stock market these days.

darlag says

Peter P says

Still, I think George Soros is way cooler than Warren Buffett.

I read recently that Soros has put 17% of his fortune into SPY puts. That's over $2 billion dollars. I'm going out on a limb and saying he doesn't have much faith in the stock market these days.

See my comment:

http://patrick.net/?p=1247927&c=1117230#comment-1117230

darlag says

If Armchair means laissez-faire in your mind then I understand your use of the word. But Austrians were devout anti-Marxist/Communist/socialist so I don't quite know where you are coming from there, Hayek's 'Road to Serfdom' being a good example.

I use "armchair" in the sense of thinking by the fireside, with your feet up and the drapes closed: a world of theory and pure reasoning, without much in the way of statistics or experimentation.

Marx was armchair. He spent vast stretches of time in the library - and I do mean "vast." Austrian economics is unabashedly drawn from first principles, as opposed to based on data or statistics, so it is similarly armchair in nature.

You can get pretty far using armchair reasoning: no doubt about it.

HydroCabron says

You can get pretty far using armchair reasoning: no doubt about it.

What about wheelchair? Stephen Hawking is pretty cool.

So some shit for brains finance journalist, wants to IMAGINE that the now-dead elder Buffet should be OUTRAGED about his successful son. Was he at the old man's bedside?

I got's better things to do.

HydroCabron says

I use "armchair" in the sense of thinking by the fireside, with your feet up and the drapes closed: a world of theory and pure reasoning....

You can get pretty far using armchair reasoning: no doubt about it.

Gotcha. Einstein would use what he called "thought experiments" - imagining outcomes for experiments which at the time had no empirical or statistical or mathematically valid way to prove them. Light bending around a planet was one later proved by some astronomers in Africa.

You can use statistics to "prove" anything. On the other hand, mathematics is only useful in uncovering things that we don't know we knew.

darlag says

It is the WHY? that fascinates me.

I did not see where it gave a why?

darlag says

Unfortunately, Keynes, however innocently or unintentionally, created the perfect model for the crony capitalist state we live in today.

Yes. Hence people like Buffet.

indigenous says

Had the bailout not gone through, and had Goldman not been given such generous terms under TARP, things would have been very different for Buffett.

Yep. Very different as in he'd be out of business.

Peter P says

Nassim Taleb is the one of the few respectable intellectuals in this general area. He is right to despise economists.

Agreed.

Peter P says

The only thing good about Keynes is his beauty contest.

LOL - agreed ;)

Peter P says

Stephen Hawking

...thanks the NHS for taking care of him. Had he lived in Libertopia, he'd be pushing up daisies after dying under a bridge due to starvation early in life - If he wasn't exposed out of desperation by his parents shortly after birth.

Thanks for the Physics, Socialism!

darlag says

Warren, unfortunately, didn’t inherit either his father’s character or his libertarian ethics, choosing instead to align himself with the miscreants of Wall Street and the Federal Reserve

Really ?

Character and libertarian ethics ?

I don't know how to comment on this, other than to say, you've got to be kidding.

I don't have too much problem with libertatarians, except when they take their beliefs to extremes. But if you're going to try to suggest that they are somehow superior in character or ethics ?

For all we know, Warren Buffet may even be somewhat libertarian in his views. I don't see what that has to do with his investment decisions.

thunderlips11 says

Peter P says

Stephen Hawking

...thanks the NHS for taking care of him. Had he lived in Libertopia, he'd be pushing up daisies after dying under a bridge due to starvation early in life - If he wasn't exposed out of desperation by his parents shortly after birth.

Thanks for the Physics, Socialism!

You know, I have always supported the idea of universal healthcare. ;-)

thunderlips11 says

Peter P says

Stephen Hawking

...thanks the NHS for taking care of him. Had he lived in Libertopia, he'd be pushing up daisies after dying under a bridge due to starvation early in life - If he wasn't exposed out of desperation by his parents shortly after birth.

Thanks for the Physics, Socialism!

Perhaps physics is not cost-effective?

A free market prices everything perfectly, and can never be wrong. Our faces developed noses to support our eyeglasses.

We live in the best of all possible worlds. There can be no market failures - all apparent failures are actually caused by the Federal Reserve.

If Hawking's work were really of worth to the world, the free market would have supported him no matter what.

HydroCabron says

If Hawking's work were really of worth to the world, the free market would have supported him no matter what.

We haven't had a free market in America since 1913 when the Federal Reserve and the IRS were formed. As the Greenspan article above asks...

“What free market are you talking about, Alan? The one that prints fiat currency and extends credit out of thin air? The one whose interest rates are set by a central banking authority instead of the market itself? The one that coddles bankers, bails out their failing companies and generally supports a ‘moral hazard’ approach to systemic risk? The one which has so merged government and big corporations that it is beginning to more closely resemble Mussolini’s definition of Fascism than Capitalism?"

Crony capitalism is not free market capitalism. Monetary manipulation is not free market capitalism. True free market capitalism has been dead for a very long time.

Since you are unable to utter anything besides ad hominem, I'm forced to conclude that yes the Fed has stole our money.

Also across several threads I'm forced to conclude that the great depression was initially caused by an increase in money supply and then created by HH and FDR.

indigenous says

Dollar in 1776 = 1.11 in 1912

Dollar in 1913 = .04 in 2014

In the libertarian mind, this is the greatest crime and crisis of the modern world. Not mankind's destruction of the planet, not the pollution of the entire ecosystem, and not the questionable future of the human race in general.

Between 1776 and 1912, most people couldn't afford a pot to piss in. Since 1913, everyone has come to live lives better than all but the wealthiest could live in 1912.

But it's all for naught because the dollar was revalued during that time.

Libertarianism is a death cult.

HydroCabron says

In the libertarian mind, this is the greatest crime and crisis of the modern world. Not mankind's destruction of the planet, not the pollution of the entire ecosystem, and not the questionable future of the himan race in general.

Which infers that we would be better off without private property. Which would result in the tragedy of the commons.

HydroCabron says

Between 1776 and 1912, most people couldn't afford a pot to piss in. Since 1913, everyone has come to live lives better than all but the wealthiest could live in 1912.

So by that logic we should foster hyperinflation.

HydroCabron says

But it's all for naught because the dollar was revalued during that time.

Explain

indigenous says

Which infers that we would be better off without private property.

Nope: it would imply it. Consult 9th-grade English text.

But it doesn't imply it, anyway.

Let me help your tiny libertoonian brain: a statement about reality is just a statement about reality. If that statement implies some role for government, that does not mean the statement is false.

Indeed: government may not be the best solution.

You might try Scientology. It's less dogmatic.

The problem with Glibertopianism is this:

Every problem no matter how complex, has a simple solution. Implementation of Libertarian ideology. There are no problems Libertarianism is not IDEAL for.

If such policies have been applied and had undesirable effects, it's because the people applying it weren't PURE enough and it'll work next time.

John Galt is Jesus Christ, and if you didn't get it yet, it's because your Gideon.... I mean your copy of Atlas Shrugged is insufficiently dogeared.

HydroCabron says

But it doesn't imply it, anyway.

Then what is the alternative?

Vicente says

Every problem no matter how complex, has a simple solution.

Usually complexity is the result of not really looking at the problem. More often than not the question is the answer, which is about as simple as it gets.

Vicente says

John Galt is Jesus Christ,

If Galt is the savior then Obummer is the entire holy trinity.

indigenous says

1 dollar in 1971= $ 0.17 today

No a little inflation is not good

It destroyed mankind. Everyone was raped and murdered.

No wealth remains: no infrastructure, no cars, no food, no institutions, and no people.

Just a few broken bricks and a rusted-out '74 Chevelle.

indigenous says

It correlates to the disappearing middle class.

But the wealthy, who hold plenty of cash and fixed-income investments, got wealthier.

So the weaker dollar somehow enriched those holding it while hurting those who held less of it.

Brilliant!

HydroCabron says

So the weaker dollar somehow enriched those holding it while hurting those who held less of it.

Brilliant!

No, Mr Cabron

The point is that those with 1st access to the money are able to invest ahead of the inflation, thereby benefiting from the inflation that the middle class does not benefit from.

Plus the inflation -- wage-price spiral -- of the 1970s was the home-buyers of the 1950s & 60s greatest friend. A $30,000 mortgage was cut in half in real terms 1970 to 1980.

Reading more about Weimar I found out that they actually renormalized everyone's debt once they moved off the papiermarks, since the 100 billion-fold inflation of 1923 had wiped out everyone's pensions, savings, and debt equally, and this screwed up too many things.

"Eventually, some debts were reinstated to partially compensate those who had been creditors. A decree of 1925 reinstated some mortgages at 25% of face value in the new Reichsmark (effectively 25,000,000,000 times their value in old marks) if they had been held 5 years or more"

One man's debt is another man's savings, LOL, but these days the 1% has the savings and the 99% has the debt.

Bellingham Bill says

oh, wait, that's not what happened at all!

That progressive party mission statement sounds quite ominous, considering what Wilson did it is quite accurate.

https://www.youtube.com/watch?v=K8E_zMLCRNg

1 https://www.youtube.com/watch?v=K8E_zMLCRNg

Paulson wants you to believe that, but it are not so.

"There is this oft-repeated lie in the media about various acts taken by people and their impact. We saw this in the wake of 2008 in the fawning presented by the media in regards to Hank Paulson and Ben Bernanke, with the oft-repeated claim that they had "saved the world" -- or at least the US economy.

The problem with such a claim is that it rests on nothing more than conjecture, being bereft of evidence. Indeed, the sort of interventionism that both engaged in has parallels that are not so kind in the hindsight of history, including the years of The Depression when our government likewise engaged in financial repression, an orgy of deficit spending and outright currency devaluation. While the means and methods were different this time the intended acts and goals were not. Nor are the results; the common man's purchasing power, on average, has taken a huge hit -- just as it did in the 1930s, and for the same reasons.

It also flies in the face of actual evidence, specifically 1920/21, where the US Federal Government and Federal Reserve, despite the bleating of one Hoover, yes, that Hoover, refused to intervene in what at the time was the greatest deflationary depression in the history of the United States before or since in terms of rate of change over time. The reason we don't recognize it as a depression in our history books is that it was over almost before it began; by refusing to intervene the bad debt and bad economic decisions forcibly cleared themselves via bankruptcy and fire sale within a year. Within 18 months the economy had posted the fastest rate of expansion in production along with the most-rapid return to full employment in the nation's history, before or since."

http://market-ticker.org/akcs-www?post=229306

It's not that different types of governments are inherently good or bad. There have been benevolent dictatorships as well as corrupt democracies. It's what happens when a select few in and around government are given the power to control the purse of the many, as is the situation we have today worldwide, that destroys economies.

When the founding fathers structured the government they did not have in mind the huge central control of almost every aspect of human life. Most were scared of banks and especially fiat (paper) money because a government with the ability to debauch and counterfeit its currency also has the ability to bankrupt it's citizenry.

From Alexander Hamilton to Janet Yellen, bankers have worked as hard they can against the existence of a free market economy. They have managed to get the intent of the framers of the Constitution bastardized to the point it doesn't even resemble what our forefathers were trying to accomplish. And they have done an excellent job until lately, but some of us believe that they have finally bitten off more than they can chew.

Since the beginning of our republic, smart people have seen through the greed and avarice that accompanies the "flexible currency" and centralized control of finance ideologies. The argument that today's economy is more complicated than in the founding father's time, that today's economy necessitates a "modern" approach to fiscal and monetary control, is pure and simple bullshit with no basis in fact. It spews from the mouths of those who have everything to lose of they lose control of America's purse strings.

There is hope for a better future but not without upheaval which is most certainly on the near horizon.

Just some of my favorite quotes... food for thought for those that wonder which side has the moral high ground.

"But if in the pursuit of the means we should unfortunately
stumble again on unfunded paper money or any similar species of fraud,
we shall assuredly give a fatal stab to our national credit in its infancy.
Paper money will invariably operate in the body of politics as spirit liquors
on the human body. They prey on the vitals and ultimately destroy them.
Paper money has had the effect in your state that it will ever have,
to ruin commerce, oppress the honest, and open the door to every
species of fraud and injustice."
- George Washington

"History records that the money changers have used
every form of abuse, intrigue, deceit, and violent means
possible to maintain their control over governments by
controlling money and it's issuance."
- James Madison

"The duty of government is to leave commerce to its own capital
and credit as well as all other branches of business, protecting
all in their legal pursuits, granting exclusive privileges to none."
-Andrew Jackson

"If congress has the right under the Constitution to issue paper money,
it was given them to use themselves, not to be delegated to individuals
or corporations."
-Andrew Jackson

"We are beginning a new era in our government. I cannot
too strongly urge the necessity of a rigid economy and an
inflexible determination not to enlarge the income beyond
the real necessities of the government."
-Andrew Jackson

And I sincerely believe, [...] that banking establishments are
more dangerous than standing armies; and that the principle of
spending money to be paid by posterity, under the name of funding,
is but swindling futurity on a large scale."
-Thomas Jefferson

"If the American people ever allow private banks to control the issue
of their currency, first by inflation, then by deflation, the banks
and corporations that will grow up around them will deprive the people
of all property until their children wake up homeless on the continent
their Fathers conquered."
-Thomas Jefferson

“When plunder becomes a way of life for a group of men living
together in society, they create for themselves in the course of time
a legal system that authorizes it and a moral code that glorifies it.”
-Frederic Bastiat

"At the heart of banking is a suicidal strategy. Banks take money
from the public or each other on call, skim it for their own reward
and then lock the rest up in volatile, insecure and illiquid loans
that at times they cannot redeem without public aid."
-James Buchan

"The modern banking system manufactures money out of nothing."
-Josiah Stamp

"Issue of currency should be lodged with the government and be
protected from domination by Wall Street. We are opposed to provisions
[which] would place our currency and credit system in private hands."
-Theodore Roosevelt

"It is well enough that people of the nation do not understand our
banking and monetary system, for if they did, I believe there would
be a revolution before tomorrow morning."
-Henry Ford

"The real truth of the matter is [...] that a financial element
in the large centers has owned the government ever since
the days of Andrew Jackson."
-Franklin D. Roosevelt

"I do not think it is an exaggeration to say history is largely
a history of inflation, usually inflations engineered by governments
for the gain of governments."
-F. A. Hayek

"No one should expect that any logical argument or any experience
could ever shake the almost religious fervor of those who believe
in salvation through spending and credit expansion."
-Ludwig von Mises

"What is needed for a sound expansion of production is additional
capital goods, not money or fiduciary media. The credit boom is
built on the sands of banknotes and deposits. It must collapse."
-Ludwig von Mises

"There is no means of avoiding the final collapse of a boom brought
about by credit expansion. The alternative is only whether the crisis
should come sooner as the result of voluntary abandonment of further
credit expansion, or later as a final and total catastrophe of the
currency system involved."
-Ludwig von Mises

"What governments call international monetary cooperation is
concerted action for the sake of credit expansion."
-Ludwig von Mises

"The essence of a credit-expansion boom is not overinvestment, but
investment in wrong lines, i.e., malinvestment."
-Ludwig von Mises

"The Great Depression, like most other periods of severe unemployment,
was produced by government mismanagement rather than by any
inherent instability of the private economy."
-Milton Friedman

"It is in war that the State really comes into its own: swelling in power,
in number, in pride, in absolute dominion over the economy
and the society."
-Murray Rothbard

mell says

that Hoover, refused to intervene

That Hoover had the boot of one Warren G Harding on his throat. I would not give any credit to Hoover.