Warren Buffet speaks common sense; alarms most Republicans

[Aeson]

I have no idea what this even means. Are you just producing noises that sound appropriate, or do you have a point?

Whether or not you agree with his point, what he is referring to is obvious. Are you really this dense?

[Aeson]

The net result? In real terms what you've actually done is tax the middle class and give the proceeds to the poor.

I am fully aware that businesses (and by proxy investors) pass their costs on to consumers. The middle class are included in "those who can afford bread even so" in my statement, and as such I have no qualms about increasing their cost on meat (or flat panel TVs for that matter) so that people without enough bread can eat.

The real question is why do you want to coddle the middle-class so?

[Asher]

@Asher: he's about fifty feet away from me right now.

That's so creepy.

You live AND work together? As heterosexuals?

[Asher]

Asher, IIRC Texas now consumes more oil than it produces.

It doesn't matter at all. The centre of the US energy sector is Texas. There's a ridiculous amount of engineers/white collar jobs there for it, regardless of where in the US oil comes from. Or even if it's a shale play in the NE US.

It's the same reason Calgary produces no oil, it's mostly up in the north by Edmonton. But the white collar jobs are here.

[giblets]

Well let's see.

Obamacare raises the price of healthcare, pricing minorities out of coverage (since they are the marginal cost on a cost benefit ratio).

Do you think minorities spend a larger share of their income on healthcare than white people? I don't see how else raising the cost of healthcare is supposed to hit minorities harder.

QE1 and QE2, have raised the price of basic good and fuel, costs which diksproportionately hit working poor, and who just happen to be minorites.

You know that inflation from increasing the money supply also increases wages. Right? If food and fuel are increasing in price faster than wages, it's not because the money supply is larger. QE1 and QE2 aren't even Obama's policies because both were implemented by the Federal Reserve under Ben Bernanke, and QE1 began before Obama was even president.

He's raised business and payroll tasxes, reporting requirements, which means that business are going to fire people last in first out. This hits minorities particularly hard. Which is why we're seeing the workforce participation plummetting.

I'm not even sure what you're referring to here. Is it the 1099 tax reporting provision in the healthcare bill? That never even went into effect before it was repealed.

He's supported increaseing benefits and handouts, meaning that there's less incentive to work, especially if you are a minority.

Do you think offering someone free money makes them worse off...?

[Asher]

It doesn't matter at all. The centre of the US energy sector is Texas. There's a ridiculous amount of engineers/white collar jobs there for it, regardless of where in the US oil comes from. Or even if it's a shale play in the NE US.

It's the same reason Calgary produces no oil, it's mostly up in the north by Edmonton. But the white collar jobs are here.

http://lonestarstrong.com/2011/07/fed-official-robust-texas-job-growth-in-last-half-of-2011/

As for the Texas economy, Phillips said he expects job growth for the year in the Lone Star State to a between three and three and a half percent, strong job growth and well ahead of the 1.8% annual job growth for the nation predicted earlier this month by Moody's Analytics.

Phillips says the factors pushing Texas' growth ahead of the national average include housing affordability, the state's high tech sector, and especially energy, booming due to

higher oil prices.

"We are having another boom in our energy sector, and that is really helping the state's economy," he said.

Phillips said, even though Gov. Rick Perry is looking like a probably Presidential candidate, the Texas economy is strong due to 'cyclical factors' like the boom in shale oil fields in north and south Texas, and not due to specific policies implemented by Perry.

"Phillips" is Keith Phillips, senior economist for the Federal Reserve Bank of Dallas.

[BlackCat]

When I buy a stock the money I spent doesn't just disappear into "the stock market", it goes to some specific person who I bought the stock from (and the same for gold, oil, etc.) That person now has a bunch of dollars, dollars that are worth precisely as much as the asset he sold me. Unless he really likes just holding onto dollar bills, he is going to spend them on something else. Eventually someone is going to spend those dollars on something that isn't an asset, like, say, ice cream.

That is only true if it's new stocks - otherwise the stock issuer doesn't recive a dime. Since most stock deals is about already issued stocks, your claim is prime BS

[giblets]

That is only true if it's new stocks - otherwise the stock issuer doesn't recive a dime. Since most stock deals is about already issued stocks, your claim is prime BS

Yes, if you buy an old stock from somebody else the money just vanishes into smoke. That makes me wonder why anyone would sell them.

[Flubber]

If the state can get by with 18 percent for Warren Buffett, then 18 percent on everybody seems fine by me. .

Small problem-- The state (here the United States) seems to be having a problem "getting by"

[Aeson]

To tie the last two responses I made together...

NYE is saying that by printing, we are transferring wealth from the Chinese (and generally speaking, holders of US debt) to whoever we give the new dollars to. Something that Kuci alludes to a few times in this thread already ("Inflation is bad for people who own debts denominated in dollars.") It's pretty funny to watch NYE's point fly over Kuci's head while Kuci is being so pretentious, given that NYE's point is a point Kuci has himself made.

In effect, printing is a tax on the wealthy as they tend to have more dollars. As Kuci points out with taxes (but seems to want to ignore with printing) the wealthy aren't going to just sit around and pay for the poor people's bread, so they will instead increase prices on their goods and services. For example, the Chinese will demand more dollars in exchange for cheap plastic crap to buy at Wal-mart. This will add part of the burden on to the middle class.

Though I don't agree with Kuci that 100% of the increased burden will be on the middle class in either case. Warren Buffet still probably buys bread and cheap plastic chairs either for himself or through his proxies, and the wealthy aren't always perfect about how they pass on their costs. They just generally have more power to do so. (Overridden in some cases by consumer advocacy groups, voting blocks, unions, ect.)

[BlackCat]

Yes, if you buy an old stock from somebody else the money just vanishes into smoke. That makes me wonder why anyone would sell them.

Stupidity, necessity ?

[Dauphin]

In effect, printing is a tax on the wealthy as they tend to have more dollars.

How much of the wealthies' wealth is made up assets nominally measured in dollars rather than actual dollars? Or for that matter, a person who owns a house with a mortgage denominated in dollars?

[Aeson]

This is an unfortunate and widely held misapprehension. Starting in mid-2008, the Federal Reserve has had a policy of printing too few dollars, not too many. That is the primary cause of the current recession.

Asher is right to question your use of "primary" here. Do you really think house prices and incomes could have continued to increase at their respective rates forever? Do you think that firms like Lehman and Bear could sustain 30x leveraging forever? Do you think Fannie and Freddie could have continued giving poor people houses they can't afford forever? Do you really think builders could have gone on flooding the market hoping to sell these unaffordable houses forever?

There were a lot of factors involved that extend back several years before the recession. The one you pick as "primary" was at best about timing the recession. It couldn't be avoided by that point. (Though there surely could have been better ways to deleverage and cut back on housing costs than what we got.)

Inflation is popularly considered to be a rise in the prices people pay at retail. However, properly speaking inflation is a rise in all prices, including wages. Thus if you cause inflation to rise you actually make it easier for people to pay off their mortgages and credit cards, and if you cause inflation to fall you make it harder. The fall in the rate of inflation since 2008 has exacerbated the problems in the housing market by making the real burden of people's debt larger.

Wages were lagging behind housing prices. Lending didn't care. Yes, tightening money supply exacerbated the debts people held, but the real problem was going to have to be corrected at some point. Someone without a job cannot afford a $600,000 house regardless of how much we are willing to print. Builders who are puking out new houses to give to these debtors are not operating on a sustainable business model. Neither are financial institutions which are leveraging themselves 30x+ off of these people's loans. We'd have to go all Zimbabwe on their asses and we still couldn't make it sustainable.

(This is of course the best argument against taxing Warren Buffet to give bread to the poor. Or printing money to give to the poor to buy bread for that matter. Though there are some differences between bread and home ownership that probably wouldn't allow bread prices to get that far out of whack with incomes.)

[Aeson]

How much of the wealthies' wealth is made up assets nominally measured in dollars rather than actual dollars? Or for that matter, a person who owns a house with a mortgage denominated in dollars?

I really have no idea how much US debt Buffet holds. He seems to be mostly in stocks, which should adjust to inflation reasonably well. But obviously there is several trillion of it out there somewhere... and I'm just guessing it's not being held by the poor.

[Kuciwalker]

Asher is right to question your use of "primary" here. Do you really think house prices and incomes could have continued to increase at their respective rates forever? Do you think that firms like Lehman and Bear could sustain 30x leveraging forever? Do you think Fannie and Freddie could have continued giving poor people houses they can't afford forever? Do you really think builders could have gone on flooding the market hoping to sell these unaffordable houses forever?

There were a lot of factors involved that extend back several years before the recession. The one you pick as "primary" was at best about timing the recession. It couldn't be avoided by that point. (Though there surely could have been better ways to deleverage and cut back on housing costs than what we got.)

You have everything backwards. A housing bust and financial crisis in 2008 does not cause 9% unemployment in 2011. Excessively tight monetary policy in response to that crisis, followed by a continued policy of tight money, does cause 9% unemployment in 2011.

Wages were lagging behind housing prices. Lending didn't care. Yes, tightening money supply exacerbated the debts people held, but the real problem was going to have to be corrected at some point. Someone without a job cannot afford a $600,000 house regardless of how much we are willing to print. Builders who are puking out new houses to give to these debtors are not operating on a sustainable business model. Neither are financial institutions which are leveraging themselves 30x+ off of these people's loans. We'd have to go all Zimbabwe on their asses and we still couldn't make it sustainable.

Yes, we would have to reallocate some production out of the housing sector and into other industries. Big ****ing deal; we were already doing that starting around 2006. Retraining construction workers to do something else doesn't require 3 years at 9% unemployment.