Monday, November 4, 2013
We know.. we're such blue meanies and all that.. Why don't we pick on someone our own age and wealth strata..
But for today's post, we choose Buffett not out of personal venom but he's simply the most famous Billionaire in America presently outside of Bill Gates and we genuinely Hate that man.
And pretty much all the points we make today will be mathematical and practical logic based. The calculator will do the arguing for us...
Think of it like a fan.
If the blades circulate very slowly, you're not going to feel any coolness. There must be a certain speed or traction for that fan to blow cool air your way and the motion must be consistent for any effect to take place.
That's really how an economy works.. any nation, state, city, county..
No 'Bill' buying the apples, then there's no Anne and thus no Carl.
So what happens when wealth is held in large numbers by very few people... How does it affect the whole ebb-flow of capitalism and consumption?
Here's where Warren Buffett as symbol and reality comes in..
Buffett has a net worth of $54 billion which looks like $54,000,000,000.
Now let us say we also gave $54 billion to 540,000 Americans via $100,000 checks to each person...
Let's start with automobiles.
How many vehicles can one super-wealthy person buy?
How many vehicles do you think 540,000 people each given a check for $100k would buy?
Let us pretend only a measly 1% of that total took that money and used a portion to buy a new car, that is still 5,400 people i.e. 5,400 new or used vehicles purchased...
And we all know that more than 1% would go treat themselves to a new car
Which helps car dealerships stay in business and allows them to pay their employees and do charitable deeds in their local communities more?
Let us say Buffett loves having lots and lots of homes.. Unless he has a Nicolas Cage-like mental illness and owns more homes for personal use than months in a year, it is realistic to assume Buffett may buy 1-2 expensive homes in a year..
Now we come to the populace each with $100k..
We will once again low-ball assume that 1% would use that money or a portion of, as a down payment on a new home..
That's 5,400 new homes sold.. 5,400 people now borrowing from banks which normally we vent relentlessly on but in this instance, it connects to the continual money flow of an economy...
And each home needing to be furnished..
No business can survive without quantity.. either repeat customers or a steady stream of new ones.. And you need populaces who possess wealth and have the means to pay for their purchases to keep their businesses alive
How many of these people have jobs if this nation was basically two wealth states.. the Buffett state and the struggling poor??
Buffett owns a lot of businesses and corporations and that's very nice...
Let's say a mere 5% of the populace who received the $100k want to start their own business and achieve their dream of individual entrepreneurship..
If each person opens a bricks and mortar business providing products and services and including themselves, employees a mere 5 individuals...
That is 135,000 people now working...
Does Buffett have 135k employees on his payroll?? Doubt it...
Those 540,000 people dividing up that $54B sure would be paying their fair share which allows for police and fire, teachers, waste pickup, street improvement and a thousand other positive things governments do with tax dollars..
Yes governments waste money on bad things to but life is not either/or..
Anyways, you see the point we're making..
This is not an argument in support of Communism, Socialism, Marxism or any other 19th century stale 'Ism'...
Its actually an argument in support of 18th century to present-day Capitalism..
When great amounts of wealth are in the hands of a select few, not only does it give those people great amounts of power and political influence to shape policy to their behalf while treating the populace like children or chattel...
Really this entire global economy would have collapsed upon itself 30 years ago in a dust heap if not for the advent and expansion of personal credit cards allowing the poor to feel rich and to purchase without often the fiscal means to repay...
And of course the Buffetts of the world got wealthier over this..
If there was no outlet to do so, the power brokers who truly run things never would have devised the concept or had Congress in the early 1980s change the laws to make this banking practice national and uniform in policy..
And don't get us started on the parents pushing their kids to be like Buffett or Trump as the path to Happiness..
But it is their wealth acquisition and confiscation which is making the nation and world at large a poorer, more desperate place to live..
The Buffetts of the world..
The truly greed-less and selfless simply teach those people to acquire the food for themselves from which independence and self-respect grows..
Funny how so many admire and rationalize those who make our lives a lesser quality than it should be
Posted by Susquehanna at Monday, November 04, 2013