Warren Buffett: US economy isn't as bad as 2016 candidates say

[KamaAina]

http://thehill.com/policy/finance/271040-warren-buffett-pans-presidential-candidates-bleak-economic-outlook

Billionaire investor Warren Buffett says he’s sick and tired of presidential candidates making bleak statements about the U.S. economy.

The Berkshire Hathaway CEO and Hillary Clinton endorser complained about the “negative drumbeat” from 2016 hopefuls in an annual letter to the holding company's shareholders.

“It’s an election year, and candidates can’t stop speaking about our country’s problems,” wrote Buffett. “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.”

Buffett argued that based on the U.S. gross domestic product, economic conditions today were staggeringly better than those of his childhood. That, coupled with constant technological advancement, will lead American kids toward a bright future.

[The Velveteen Ocelot]

1. Easy for him to say.

There's no question that he's a very shrewd businessman. But he looks at the financial markets, not the way almost everyone lives, as to which he's clueless.

[Skittles]

2. correct

he is not in touch with the anxieties the average person feels, and those anxieties seem to grow by the day for us

[merrily]

3. Buffet to English: People don't invest in my companies as dmuch as I'd like when they hear

stuff that's a downer. And hell, I need to make a lot more if I am going to catch up to my friend, Bill Gates. So, STFU about the 99%, willya?

[Lodestar]

4. GDP doesn't mean much as a measure in today's economy. Here's why -

This article is from 1995 but still applies.

If the GDP Is Up, Why Is America Down?

Why we need new measures of progress, why we do not have them, and how they would change the social and political landscape

Throughout the tumult of the elections last year political commentators were perplexed by a stubborn fact. The economy was performing splendidly, at least according to the standard measurements. Productivity and employment were up; inflation was under control. The World Economic Forum, in Switzerland, declared that the United States had regained its position as the most competitive economy on earth, after years of Japanese dominance.

The Clinton Administration waited expectantly, but the applause never came. Voters didn't feel better, even though economists said they should. The economy as economists define it was booming, but the individuals who compose i—or a great many of them, at least—were not. President Bill Clinton actually sent his economic advisers on the road to persuade Americans that their experience was wrong and the indicators were right.

This strange gap between what economists choose to measure and what Americans experience became the official conundrum of the campaign season. “PARADOX OF '94: GLOOMY VOTERS IN GOOD TIMES,” The New York Times proclaimed on its front page. “BOOM FOR WHOM?” read the cover of Time magazine. Yet reporters never quite got to the basic question—namely, whether the official indicators are simply wrong, and are leading the nation in the wrong direction.


The problem goes much deeper than the “two-tiered” economy—prosperity at the top, decline in the middle and at the bottom—that received so much attention. It concerns the very definition of prosperity itself. In the apt language of the nineteenth-century writer John Ruskin, an economy produces “illth” as well as wealth; yet the conventional measures of well being lump the two together. Could it be that even the upper tier was—and still is—rising on the deck of a ship that is sinking slowly into a sea of illth, and that the nation's indicators of economic progress provide barely a clue to that fact?

Ample attention was paid to the symptoms: People were working longer hours for less pay. The middle class was slipping while the rich were forging ahead. Commutes were more harried. Crime, congestion, and media violence were increasing. More families were falling apart. A Business Week/Harris poll in March imparted the not surprising news that more than 70 percent of the public was gloomy about the future.

Sounding much like the guidance department of a progressive New York grammar school, the Clinton Administration said that Americans were simply suffering the anxieties of adjustment to a wondrous new economy. Speaking in similar terms, Alan Greenspan, the chairman of the Federal Reserve Board, told a business gathering in San Francisco this past February that “there seemingly inexplicably remains an extraordinarily deep-rooted foreboding about the [economic] outlook” among the populace.

Those silly people. But could it be that the nation's economic experts live in a statistical Potemkin village that hides the economy Americans are actually experiencing?

Cont'd

http://www.theatlantic.com/magazine/archive/1995/10/if-the-gdp-is-up-why-is-america-down/415605/

[BernieforPres2016]

5. Is it OK for me to say

Go fuck yourself Warren Buffett?

[surrealAmerican]

6. I can't imagine the parents of the 22% of all US children ...

... who are currently living below the poverty line will agree with him on this.

The economy is working quite well for some Americans, and very, very poorly for others.

[Lodestar]

7. Pollyanna Buffett, enough with the glad game (ie. using the GDP as a measure).

Why not spell out EXACTLY what's better and what's worse, who is benefiting and who is not? Here's an analogy from that article I posted above that explains nicely why the GDP is a dishonest and unrealistic way to measure our economic health.

If the chief of your local police department were to announce today that “activity” on the city streets had increased by 15 percent, people would not be impressed, reporters least of all. They would demand specifics. Exactly what increased? Tree planting or burglaries? Volunteerism or muggings? Car wrecks or neighborly acts of kindness?

The mere quantity of activity, taken alone, says virtually nothing about whether life on the streets is getting better or worse. The economy is the same way. “Less” or “more” means very little unless you know of what. Yet somehow the GDPmanages to induce a kind of collective stupor in which such basic questions rarely get asked.

By itself the GDP tells very little. Simply a measure of total output (the dollar value of finished goods and services), it assumes that everything produced is by definition “goods." It does not distinguish between costs and benefits, between productive and destructive activities, or between sustainable and unsustainable ones. The nation's central measure of well being works like a calculating machine that adds but cannot subtract. It treats everything that happens in the market as a gain for humanity, while ignoring everything that happens outside the realm of monetized exchange, regardless of the importance to well-being.

By the curious standard of the GDP, the nation's economic hero is a terminal cancer patient who is going through a costly divorce. The happiest event is an earthquake or a hurricane. The most desirable habitat is a multibillion-dollar Superfund site. All these add to the GDP, because they cause money to change hands. It is as if a business kept a balance sheet by merely adding up all “transactions,” without distinguishing between income and expenses, or between assets and liabilities.

//

Something similar happens with the natural habitat. The more the nation depletes its natural resources, the more the GDP increases. This violates basic accounting principles, in that it portrays the depletion of capital as current income. No businessperson would make such a fundamental error. When a small oil company drains an oil well in Texas, it gets a generous depletion allowance on its taxes, in recognition of the loss. Yet that very same drainage shows up as a gain to the nation in the GDP. When the United States fishes its cod populations down to remnants, this appears on the national books as an economic boom—until the fisheries collapse. As the former World Bank economist Herman Daly puts it, the current national accounting system treats the earth as a business in liquidation.

Add pollution to the balance sheet and we appear to be doing even better. In fact, pollution shows up twice as a gain: once when the chemical factory, say, produces it as a by-product, and again when the nation spends billions of dollars to clean up the toxic Superfund site that results. Furthermore, the extra costs that come as a consequence of that environmental depletion and degradation—such as medical bills arising from dirty air—also show up as growth in the GDP.

[Jitter65]

8. Warren, lots of people know that. And for the Obama haters that is terrible! nt