First Munger, Now Buffett

Warren Buffett has written a letter in the NYTimes thanking uncle sam for the bailout which preserved some of Buffet's billions in the crisis of 08 in which Buffett had exposure.  Buffet should be thanking taxpayers, their children and grandchildren, because Uncle Sam has no money, it has to come from taxpayers, and their hapless descendants.

You cannot believe in Free Markets and applaud Warren Buffett.  Buffett's father was a congressman, and conservative, lamenting government intrusion in people's lives.  An issue alive at that time was pension plans, forced savings, insurance as a finance vehicle, and tax policies that caused people to invest unwisely in the stock market.  Being an insider to all that, it was a simple conclusion: buy basic stocks and hold, the markets will grow unreasonably over the years, people are forced to invest, you cannot lose.

Many people had that insight, but Buffett enjoys survivorship bias, that is he has survived best among all those that knew what he knew.  We think he is smart because he survived.  Just luck of the draw.

His partner Munger earned millions form the bailout, as did Buffett.  Survivorship bias makes the survivors believers in the system, and in themselves, because, well, they did all right. It is easy to ignore those whose rolled craps in the game, and even easier to ignore what we do not have because of the game: freedom, cures, options etc....  but easier just to say "I am smarter..."  and "You need to buck up..."  when people question your success.

The economy was never in trouble in 08.  Welfare queens like Buffett were in trouble.  David Stockman explains what happened.    You cannot love free markets and admire Warren Buffett.

Bookmark this post --- Email this post