WARREN BUFFET’S DEFENSE OF THE FUTURE

In the latest TIME magazine of 1/15/2017, Buffet suggests that we will grow in the next 25 years (about a generation in time) that the USA population will grow from $59,000 to $79,000.Both are GDP per capita. Buffet is doing his part to raise the morale of the general American public.

Unfortunately, his example is wrong. Wrong. He uses averages. Averages are distorted by the few, say 1% that have 90% of the income and 40% of the wealth. I like Mr. Buffet. He is one of the top 1% that pays his taxes here. Further, we do have some things in common. I went to the same grade school as he did about 10 years later. I grew up within a mile or two from his residence. I bought treats at his parents’ grocery store. His father was our congressman.

He drives a two year old car and lives just two houses from a good friend. So I am only talking about this article, not personality or the character of Mr. Buffet. As a former futurist, I have to believe that the future is really hard to describe or know. However, if we do have growth the distribution will not be based on averages, rather on distribution. Since 1980, most of the population here in the states is a growth of about 6%, for the folks at the top, it is between 200 to 300 greater than the median salary of the general worker. Or, today the CEO is over 300 times greater than the median worker.

Steven Pinker, another academic that I admire, strikes at “confirmation bias.” We think that things are bad and thus we believe in only negative accounts of the human condition. Well we do have improvements, but that must be balanced off by the negatives. That means outsourcing and robotics. If you own a company and your competitor is outsourcing and you are not then you must go overseas to cheap labor to compete. Robotics means that machines will work all the time and make goods that are as good as or better than humans. Thus demand for workers is lessened.

Americans are working under “crony capitalism.” The critics on both the Left and Right indicate that this form of capitalism is one where monopoly capitalism of overlapping corporations look out for themselves and their kids. They live in gated communities and are protected by contract security.

TIME has an issue to help folks begin to believe in their institutions. However, there are some statistical tricks that suggest that their heart is in the right place, but the journalism is a bit transparent.