Warren Buffett: Stop blaming the rich for income inequality

[LegendKiller]

Indeed, politicians and money do come into play in some form, but my point is that it can all be offset by effort. The effort is going to depend on a ton of shit, like how quickly someone can learn things, what background they have (ie: did they fuck off during their entire stint in education and can't even read, etc.), luck, timing, etc.

I think our difference here is that you keep using standard of living as something people should inherently get and which provides them more than life. My take on standard of living is: you have the minimum required to keep you alive until you otherwise earn a higher standard of living through your own means. If people don't like it, then they can get fucked -- until they want to put some more effort into bettering themselves.

This is where you depart form reality.

Do you know what Carried Interest is? It's when you can forgo a portion of your income to invest it into the hedge fund you work for for a number of years. Then, instead of paying your top marginal tax rate on that income, you pay capital gains rate. Thus, if you get paid $10m/yr and put $9mm into the hedge fund, keep it there for a few years, you can take it out and not pay 38% but pay 15%.

What politician voted for that? Who keeps voting for that? Politicians who get a cut of the extra 23% you saved, that's who.

You *CANNOT* overcome that as a common man, it is impossible, and that's why the wealth gap is increasing and why it is becoming ever more difficult for the "common" man to keep the same standard of living. It doesn't matter how hard you work, it will keep getting more difficult.

What about global labor arbitrage. You take a decent company, one that employs a decent amount of Americans. You LBO it, sell 90% of the capital structure as debt, fire 50% of the workforce, hire 30% back as Chinese or Indians. Even then, when the company goes BK, you only lose 10% and the pension funds of the people you fired lose 50% of the 90% in the BK. Meanwhile the LBO firm bought up the debt at $.20 on the dollar and exchanges the remaining 30% for equity in the new company, tripling their original investment.

I have seen that happen, time and again.

What about the LBO scam artists who lever up a company, pillage its over funded pension by revising the actuarial and return figures, then when the company goes BK and its pension is insolvent they turn it over to the PBGC and those people get 50% of their promise benefits. The LBO scam artists keep their money.

If you think hard work can overcome this, then you are a fucking moron. Period.

 

[Svnla]

You implied that people are "blaming the riches for the wrong(s) with the poor."

Buffett didn't say that. YOU said that, and if you can't back up your editorializing, then don't try to twist what Buffett actually said to suit your own purposes.

Again, where did I say the poor hate the rich or anything about jealousy as you claimed? Since you are still unable to quote my exact words to support your statement, you need to hit the road because you are a liar.

 

[MCSEandbroke]

Yea, I don't know why she ended up in the position she did. Could it perhaps be that she was a moron that chose to get a law degree, then not use it so she could sit around and make trinkets? Or maybe that she never bothered finding a spouse that could support her while she sat at home doing arts and crafts? I'm going with one of those.

Well, this is clearly where we differ I don't think Morons should have to die alone in the park...we need to treat people better!

 

[norseamd]

Buffett is nothing more than a brand. He has sold everybody on this folksy "awe shucks" thing, but in reality, he's just another wheeler and dealer who has avoided paying taxes his whole life. Every single deal he does is structured to avoid paying taxes.

This is actually the root of income inequality. If he had actually paid the taxes he should have he'd never have tried to accumulate the wealth he did.

He is the root of capitalistic corruption. He has made a business of working with governments to further crony capitalism.

He controls most of the American alcohol distributor industry and pays off local and federal governments to pass laws that crush his competition and increase profits for himself and his businesses and shit.

 

[MongGrel]

This is where you depart form reality.

Do you know what Carried Interest is? It's when you can forgo a portion of your income to invest it into the hedge fund you work for for a number of years. Then, instead of paying your top marginal tax rate on that income, you pay capital gains rate. Thus, if you get paid $10m/yr and put $9mm into the hedge fund, keep it there for a few years, you can take it out and not pay 38% but pay 15%.

What politician voted for that? Who keeps voting for that? Politicians who get a cut of the extra 23% you saved, that's who.

You *CANNOT* overcome that as a common man, it is impossible, and that's why the wealth gap is increasing and why it is becoming ever more difficult for the "common" man to keep the same standard of living. It doesn't matter how hard you work, it will keep getting more difficult.

What about global labor arbitrage. You take a decent company, one that employs a decent amount of Americans. You LBO it, sell 90% of the capital structure as debt, fire 50% of the workforce, hire 30% back as Chinese or Indians. Even then, when the company goes BK, you only lose 10% and the pension funds of the people you fired lose 50% of the 90% in the BK. Meanwhile the LBO firm bought up the debt at $.20 on the dollar and exchanges the remaining 30% for equity in the new company, tripling their original investment.

I have seen that happen, time and again.

What about the LBO scam artists who lever up a company, pillage its over funded pension by revising the actuarial and return figures, then when the company goes BK and its pension is insolvent they turn it over to the PBGC and those people get 50% of their promise benefits. The LBO scam artists keep their money.

If you think hard work can overcome this, then you are a fucking moron. Period.

That and on a completely differnt issue, many of the major banks that were "Too Big Too Fail" have still had things like an "Cartel" doing insider trading in chat rooms, and that was only one they saw.

I'm sure there are many more, and that was like a slap on the wrist at a fine of .10 to the dollar .

So the banks are now entities that are convicted felons with a license to rape any at will it seems.

 

[MongGrel]

They have been raping everyone for a few decades now, it's just business as usual and authorized these days.

 

[LegendKiller]

That and on a completely differnt issue, many of the major banks that were "Too Big Too Fail" have still had things like an "Cartel" doing insider trading in chat rooms, and that was only one they saw.

I'm sure there are many more, and that was like a slap on the wrist at a fine of .10 to the dollar .

So the banks are now entities that are convicted felons with a license to rape any at will it seems.

There are few very bad players like that and the whole LIBOR rigging is really just a sideshow. I do agree on one thing, TBTF needs to go away. Banks need to be capped at 5% of the total deposit base, no more.

I do like how people like mjminer think that it's just the people's fault for not working harder. We haven't even touched on how it is 100% legal for Congress to trade on insider info. Sure, there was that silly little law they passed, that they then watered down while nobody was looking.

Wonder who gives them the inside info? Couldn't be the very same people who Congress gives a 23% tax break to. Eh? Or the ones Congress passes trillion dollar defense budgets for, eh?

Nope. Can't be that.

 

[MongGrel]

A lobbyist BBQ has been in order for a long time, but that isn't gonna happen in the near future I imagine.

 

[Subyman]

Reminds me of a quote Jim Rohn once said...



I think most people don't understand this concept. If you really want to be successful, people should focus on raising the value they bring to the hour. Is it really worthwhile for a company to pay someone $15 an hour to sling hamburgers? If you wanted to stay with McDonalds why not move up, go to school and become a manager or even a GM. You even have the opportunity to work corporate for McDonald's. That's a good way to increase your value and in return you could make a nice living.

I fear that this is going to be the start of automation for a lot of big businesses. They are probably now working on ways to eliminate many entry level positions. And why shouldn't they? In the end it's going to save them a lot of money and the upkeep is going to be minimal. Plus, machines don't call out sick and they will gladly do their job 24 hours a day, 7 days a week.

I do think income equality is going to be a huge issue as we move forward. The problem is we've shipped out a lot of good paying jobs. This is why poverty, crime and drug use is such a epidemic in the inner city. Another reason why our jails are overflowing with criminals. This doesn't do our society any good. The poverty cycle is vicious. It's generational. You have people who have been on welfare for decades. How do you retrain these people when all they've known is welfare, HUD, etc... It's a daunting task that nobody knows the answer. We've created this beast. Now, we have to fix it. I don't think eliminating or decreasing welfare is the answer. If our government does this, they had better have something in place for these people. If not, we could face riots, looting and the crime rate could go thru the roof.

The issue with your first paragraph is that hardly anyone finds any fault with the income discrepancy between a burger flipper and the general manager. No one points a finger at the GM that makes 2-3 times more than the people under them. I'd argue there isn't much debate on whether your average McDonald's executive is worth 8-10x more than a burger flipper.

The issue comes in when nation-sized quantities of wealth are concentrated in one family. Where a man like Warren Buffet is worth 5,000,000 times more than the laborer. I harbor absolutely no ill will toward Warren Buffet. I think in the system we have created, he absolutely deserves what he earned from it. My issue is with the system in the first place. Capitalism is an incredible system. It works very well for a period of time, but I believe it is a short-term system. When let run for too long it collapses without proper regulations because wealth tends to concentrate.

Just like the trust busting days of the early 1900's, I think we need another round. I fear we won't have a president that would take up the task like Roosevelt did. The presidency costs too much money.

I often hear that innovation is driven by large concentrations of wealth without regulation, but is "innovation" the true goal of a society? Is a better mouse trap worth the dichotomy?

IMO automation can be the holy grail if we approach it with a different mind set. Instead of trying to maximize individual wealth, we should use automation to eliminate labor and foster creativity. Humans have such an amazing capacity to create and discover, let's focus our society onto those goals and leave the labor to the machines. Sadly, I think with the way capitalism is taught and constructed today, we will simply push the poor deeper into poverty.

 

[mrjminer]

This is where you depart form reality.

Do you know what Carried Interest is? It's when you can forgo a portion of your income to invest it into the hedge fund you work for for a number of years. Then, instead of paying your top marginal tax rate on that income, you pay capital gains rate. Thus, if you get paid $10m/yr and put $9mm into the hedge fund, keep it there for a few years, you can take it out and not pay 38% but pay 15%.

What politician voted for that? Who keeps voting for that? Politicians who get a cut of the extra 23% you saved, that's who.

You *CANNOT* overcome that as a common man, it is impossible, and that's why the wealth gap is increasing and why it is becoming ever more difficult for the "common" man to keep the same standard of living. It doesn't matter how hard you work, it will keep getting more difficult.

What about global labor arbitrage. You take a decent company, one that employs a decent amount of Americans. You LBO it, sell 90% of the capital structure as debt, fire 50% of the workforce, hire 30% back as Chinese or Indians. Even then, when the company goes BK, you only lose 10% and the pension funds of the people you fired lose 50% of the 90% in the BK. Meanwhile the LBO firm bought up the debt at $.20 on the dollar and exchanges the remaining 30% for equity in the new company, tripling their original investment.

I have seen that happen, time and again.

What about the LBO scam artists who lever up a company, pillage its over funded pension by revising the actuarial and return figures, then when the company goes BK and its pension is insolvent they turn it over to the PBGC and those people get 50% of their promise benefits. The LBO scam artists keep their money.

If you think hard work can overcome this, then you are a fucking moron. Period.

So, loopholes need to be closed that allow people to escape some of their taxes. I'm not against this by any means. I think people and businesses should have to pay the taxes that are in the spirit of the applicable tax laws. One amusing commentary, though, is would you honestly rather have that money in the hands of the government, or in the hands of these guys? If you think about it, the rich seem to have a pretty good grasp on how to manage money.

As for pensions, LBO, et al., people get screwed all the time. That's capitalism. Sucks, but nothing is without risk. Takeover raids happen, and poorly-written pension planes can also have negative consequences for the employees.

Losing a job is always a risk, but do you know what really minimizes these things? Doing better work. If the company was making money, it might not get completely gutted, there transfer opportunities to different companies (if, of course, you have a skill you have developed or if you actually bust your ass at work). Further, if it was making enough money, the owner might not want to sell it. Beyond that, if it was making even more money, it might even get out of the price range of some otherwise potential buyers.

Overall, though, I think that people can put themselves in positions where they do not get screwed (at least, less and less over time) if they work for it. If someone is tired of getting shit on, I guess they better start working on gaining a viable skill or putting more effort their work. Of course, anyone can open up a business themselves, or do their own contract work, too.

Nothing is stops people from advancing like themselves. I think everyone knows this.

 

[Jhhnn]

So, loopholes need to be closed that allow people to escape some of their taxes. I'm not against this by any means. I think people and businesses should have to pay the taxes that are in the spirit of the applicable tax laws. One amusing commentary, though, is would you honestly rather have that money in the hands of the government, or in the hands of these guys? If you think about it, the rich seem to have a pretty good grasp on how to manage money.

As for pensions, LBO, et al., people get screwed all the time. That's capitalism. Sucks, but nothing is without risk. Takeover raids happen, and poorly-written pension planes can also have negative consequences for the employees.

Losing a job is always a risk, but do you know what really minimizes these things? Doing better work. If the company was making money, it might not get completely gutted, there transfer opportunities to different companies (if, of course, you have a skill you have developed or if you actually bust your ass at work). Further, if it was making enough money, the owner might not want to sell it. Beyond that, if it was making even more money, it might even get out of the price range of some otherwise potential buyers.

Overall, though, I think that people can put themselves in positions where they do not get screwed (at least, less and less over time) if they work for it. If someone is tired of getting shit on, I guess they better start working on gaining a viable skill or putting more effort their work. Of course, anyone can open up a business themselves, or do their own contract work, too.

Nothing is stops people from advancing like themselves. I think everyone knows this.

You don't quite get it. Blaming working people for the changes in our economic ecosystem wrought by multinational Capitalism is like blaming monarch butterflies for their decline in an ecosystem altered by farmers.

If you argue that we've been damned fools to let that happen the way that it has, I'd agree. We really are more capable than butterflies when we're not too well propagandized.

 

[nickqt]

http://www.msn.com/en-us/money/mark...ing-the-rich-for-income-inequality/ar-BBk7Alo

The Oracle of Omaha has spoken, stop blaming the riches for the wrong(s) with the poors.

Oh, so because he isn't being a class traitor right at this particular moment, you'll quote him?

How cute.

 

[LegendKiller]

So, loopholes need to be closed that allow people to escape some of their taxes. I'm not against this by any means. I think people and businesses should have to pay the taxes that are in the spirit of the applicable tax laws. One amusing commentary, though, is would you honestly rather have that money in the hands of the government, or in the hands of these guys? If you think about it, the rich seem to have a pretty good grasp on how to manage money.

As for pensions, LBO, et al., people get screwed all the time. That's capitalism. Sucks, but nothing is without risk. Takeover raids happen, and poorly-written pension planes can also have negative consequences for the employees.

Losing a job is always a risk, but do you know what really minimizes these things? Doing better work. If the company was making money, it might not get completely gutted, there transfer opportunities to different companies (if, of course, you have a skill you have developed or if you actually bust your ass at work). Further, if it was making enough money, the owner might not want to sell it. Beyond that, if it was making even more money, it might even get out of the price range of some otherwise potential buyers.

Overall, though, I think that people can put themselves in positions where they do not get screwed (at least, less and less over time) if they work for it. If someone is tired of getting shit on, I guess they better start working on gaining a viable skill or putting more effort their work. Of course, anyone can open up a business themselves, or do their own contract work, too.

Nothing is stops people from advancing like themselves. I think everyone knows this.

You aren't getting it. I don't give a flying fuck through a rolling donut whether tax receipts increase one iota. What I care about is re-aligning the pay structure through forced means. How so? Because corporations won't bother paying somebody $100mm when $50mm of that $100mm is taxed at 80%. They'll stop at $20mm. They won't keep throwing money at it.

LOL - you think that is capitalism? It's not capitalism, it is an oligarchy. This is why we are in this predicament, because idiots like you refuse to see the truth, our capitalistic republic has been taken over by oligarchs.

Nothing does stop people from advancing, but that has become *much* more difficult in the last 30 years.

 

[blastingcap]

Again, where did I say the poor hate the rich or anything about jealousy as you claimed? Since you are still unable to quote my exact words to support your statement, you need to hit the road because you are a liar.

Apparently you are now hiding behind the sheer broken-ness of your own quote, daring anyone to comprehend it. Lol.

Buffett did not say broken English gibberish, so don't attribute your own views to his quotes. End of story.

 

[Svnla]

Apparently you are now hiding behind the sheer broken-ness of your own quote, daring anyone to comprehend it. Lol.

Buffett did not say broken English gibberish, so don't attribute your own views to his quotes. End of story.

Nice try to spin. You said that I (not Buffet) said the poor hate the rich and about jealousy.

Your very own words =

YOU, on the other hand, are trying to make it seems like poor people hate rich people; that it's some sort of jealousy thing.

I asked you to show that I said anything like that and so far, you are unable to do so because I did not say that.

Therefore, you ARE a LIAR, and a bad one at that. Either put up or shut up and so far, you are unable to put up so you need to (again, your own words)... "bitch, please". LOL.

 

[blastingcap]

Nice try to spin. You said that I (not Buffet) said the poor hate the rich and about jealousy.

Your very own words =



I asked you to show that I said anything like that and so far, you are unable to do so because I did not say that.

Therefore, you ARE a LIAR, and a bad one at that. Either put up or shut up and so far, you are unable to put up so you need to (again, your own words)... "bitch, please". LOL.

OK, wise guy, please explain exactly what you meant to say by your broken English (in the first post of this thread). Go on. Do it.

 

[OverVolt]

Buffett already lost his prowess anyway.

 

[CZroe]

Buffett already lost his prowess anyway.

He tried on his SJW hat once but his money meant he'd never be truly accepted.

 

[HomerJS]

So poor people set up a system that allows a CEO to be taxed at a lower rate then the person who gets his coffee??

 

[theeedude]

I think most credible economists, (not hacks like Art Laffer and Stephen Moore) would agree that wealth concentration lowers economic performance due to the multiplier effect being small. The wealthy don't buy much incremental goods and services if they get more money, they mainly use that money to bid up asset prices. So maybe a Picasso will sell for $150M instead of $100M. Doesn't really matter to the economy one way or the other. The Fed has failed spectacularly in trying to get wealth effect from channeling cheap money to the wealthy to translate to real growth, all it has translated into are asset price bubbles. Only fiscal redistribution through higher taxation and government outlays would help.
In any case, fun times are approaching as more and more jobs get automated and robotized. When computers and robots can do better work than majority of population the whole system of wealth distribution based on work is going to collapse. Not that it's based on work already, but that will put that illusion to rest.

 

[norseamd]

I think most credible economists, (not hacks like Art Laffer and Stephen Moore) would agree that wealth concentration lowers economic performance due to the multiplier effect being small. The wealthy don't buy much incremental goods and services if they get more money, they mainly use that money to bid up asset prices. So maybe a Picasso will sell for $150M instead of $100M. Doesn't really matter to the economy one way or the other. The Fed has failed spectacularly in trying to get wealth effect from channeling cheap money to the wealthy to translate to real growth, all it has translated into are asset price bubbles. Only fiscal redistribution through higher taxation and government outlays would help.

In any case, fun times are approaching as more and more jobs get automated and robotized. When computers and robots can do better work than majority of population the whole system of wealth distribution based on work is going to collapse. Not that it's based on work already, but that will put that illusion to rest.

https://www.youtube.com/watch?v=T_r68xEH0io

 

[Jaepheth]

The whole argument seems like a red herring.

It doesn't matter who's responsible for income inequality, but it's a problem and needs to be fixed. To do that requires some measure of wealth redistribution.

Is that fair? I don't know, maybe not. What I do know is that what we have going is unsustainable, and if it crashes everyone suffers.

My view of economics is that a healthy economy requires liquidity; the movement of money. Having too much money staying stagnant in too few hands doesn't help. You need a mechanism for taking money from the top and looping it back down to the bottom to let it circulate through the system again. Modern technology means that simple service industries are no longer sufficient for this task.

If you insist on creating a system that redistributes the wealth to more "deserving" persons then, whatever, that's a completely different argument about morality.
But for the economy it would be better to seize all assets above a certain level of wealth and throw the cash out onto the streets. Yes, many of the recipients will spend it on hookers and blow, but then those hookers and dealers spend the money on abortions and gold rims, and then the doctor and the parts dealer buy food and renovate their homes, and then the farmer and the contractor buy.... etc, etc. The money finds its way back to the top anyway, and then you start again. In the end, many of the poor will stay poor, and the deserving rich will stay rich, but the economy will be much healthier, and improved upward mobility will allow the American Dream to live again.

 

[CZroe]

The whole argument seems like a red herring.

It doesn't matter who's responsible for income inequality, but it's a problem and needs to be fixed. To do that requires some measure of wealth redistribution.

Is that fair? I don't know, maybe not. What I do know is that what we have going is unsustainable, and if it crashes everyone suffers.

My view of economics is that a healthy economy requires liquidity; the movement of money. Having too much money staying stagnant in too few hands doesn't help. You need a mechanism for taking money from the top and looping it back down to the bottom to let it circulate through the system again. Modern technology means that simple service industries are no longer sufficient for this task.

If you insist on creating a system that redistributes the wealth to more "deserving" persons then, whatever, that's a completely different argument about morality.
But for the economy it would be better to seize all assets above a certain level of wealth and throw the cash out onto the streets. Yes, many of the recipients will spend it on hookers and blow, but then those hookers and dealers spend the money on abortions and gold rims, and then the doctor and the parts dealer buy food and renovate their homes, and then the farmer and the contractor buy.... etc, etc. The money finds its way back to the top anyway, and then you start again. In the end, many of the poor will stay poor, and the deserving rich will stay rich, but the economy will be much healthier, and improved upward mobility will allow the American Dream to live again.

"Problem."

 

[Mai72]

Tony Robbins interviewed the top 50 investors in the world for his new book. Here is an interview with Frank Kern. He talks about his interviews with investors like Warren Buffett. I found it interesting. I know most here are going to hate on Tony. I thought a few people here would find the video worth while.

https://www.youtube.com/watch?v=LPCfhshWg54

 

[Mai72]

IMO, the wealthy (000.1%) are efficient when it comes time to paying taxes. In comparison, wage earners who earn a lot of money are the ones that are heavily taxed. They are the ones buying the new homes, cars, clothes, etc... They mostly live above their means and they get taxed for it when it comes time to pay their taxes.

The wealthy are able to play the tax game to the point where they are paying as minimal as possible. So, why don't most people do follow the rich so they can pay as little as possible during tax time? Would that be even possible?