Waren Buffet is tired of all this talk about how awful the US economy is doing by the current Presidential candidates (he doesn’t specify which candidates) who claim it is in bad shape. And he should know, right?
In his annual letter to Berkshire Hathaway shareholders, Buffett didn’t name specific candidates or issues, but noted that the negative drumbeat about the economy, health care reform and income inequality may get voters down about the future.
“It’s an election year, and candidates can’t stop speaking about our country’s problems (which, of course, only they can solve),” he said, adding later, “that view is dead wrong: The babies being born in America today are the luckiest crop in history.”
Oh those lucky duckies being born today. Imagine the wonderful world into which they are being born! To paraphrase Heath Ledger in his role as the Joker, Buffer wants us to see the sunny side, and to hell with all this damn negativity. I can;t imagine why they feel the need to campaign on the issue of economic injustice, can you? Seems like a loser to me. More happy talk by Presidential contenders is definitely in order.
But seriously, it’s easy to see why Buffett doesn’t want discussions about income inequality that have struck a nerve with the electorate. He is one of the richest men in the world, and the wealth of people like him is doing just fine, thank you very much.
The top 0.01 percent of Americans — fewer than 14,000 households — received 5.6 percent of adjusted gross income in 2012, according to data released Wednesday by the IRS that underscore the increasing concentration of income.
It was the biggest share of income clustered at the very top of the distribution scale since 2007. Those in that group had a minimum income of $12.1 million, up from the $8.8 million it took to reach that club in 2011.
I’d feel great about the economy too, if I were higher up in the economic food chain. Unfortunately, for the vast majority of people income growth has stagnated, if not outright declined. All one needs to do is look at how the median income level in America is trending over the past few years to understand why many, many people in the US might not be so sanguine regarding an economy that works so well for millionaires and billionaires.
The Sentier Research monthly median household income data for November came in at $56,746. The nominal median rose $75 month-over-month and is up $2,812 year-over-year. That’s an increase of 0.1% MoM and 5.2% YoY. Adjusted for inflation, the latest income was up $58 MoM and $2,574 YoY. The real numbers equate to increases of 0.1% MoM and 4.8% YoY.
In real dollar terms, the median annual income is 1.8% lower (-$1,052) than its interim high in January 2008 but well off its low in August 2011. […]
[R]eal median household income … spent most of the first nine years of the 21st century struggling slightly below its purchasing power at the turn of the century. Real incomes … hit an interim peak at a fractional 0.7% in early 2008, far below the nominal illusionary peak (as in money illusion) of 27.2% six months later. The real median household income is now at -1.1%. In contrast, the real recovery from the trough has been depressingly slow.
Shorter version: A good economy for the Warren Buffetts of the world turns out to be not so wonderful for millions of Americans, many of them deeply in debt, with limited if any savings. The rise of Bernie Sanders (and to some extent Trump, as well) is, in my opinion, attributable to the fact that so many of us are struggling to just barely get by, living from paycheck to paycheck, while the wealthy make out like – well, like bandits.
It is also one of the main reasons for Sanders’ appeal among young people, who don’t feel like they are living in great economic times at all. Quite the contrary. Because their economy sucks.
[M]ost Millennials are struggling in the current economy. The Millennial generation leads the way in the amount of student debt it carries. Many are stuck in low wage jobs earning so little, they are living with their parents deep into adulthood. How broke are Millennials? Pretty broke when you look at the data.
[…]
A very high number of Millennials don’t even work or if they are working, are stuck in a low wage job. Close to half of recent college graduates are working in jobs that don’t even relate to their undergraduate degree. Not a problem when you pay little for college but this can be an issue when you are going into tens of thousands of dollars of debt to finance your studies.
No wonder Sanders’ campaign, which has maintained a laser focus on income inequality in America has found an audience, despite the relative lack of media coverage of his campaign compared to Trump and Clinton. It’s a message Warren Buffet and others of his ilk would prefer not be told because it is true. And often the truth is damn depressing.
So forgive me if I side with those candidates, like Sanders, who are speaking out so “negatively” about the US economy. The truth hurts, and at this moment in time, as more and more of us watch our incomes decline or job and career prospects diminish or never get started in the first place, we need the truth, not happy talk, from those seeking higher office.
