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?