Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

 

Who am I to argue with Warren Buffett?

He's ridiculously rich and doesn't even want to be president.

He is, therefore, in possession of all his marbles.

Buffett, though, would like to argue with all those who claim America is disappearing down a dark hole where serpents hiss and the grill never gets turned down.

He means, I suspect, such doomsayers as pretty much every presidential candidate.

They portray the nation as desperate. Naturally, they portray themselves as the only people who can reverse this desperation and create a new morning, as opposed to the old moaning.

To which the great investor says: Pish.

Buffett just released his annual letter, a regular expression of his own good sense.

He specifically dismissed the notion that those who are entering the economy today -- and those even younger than that -- will struggle.

"That view is dead wrong," he said. "The babies being born in America today are the luckiest crop in history."

You'll be reassured that Buffett offered some numbers to back his assertion.

He said: "American GDP per capita is now about $56,000. As I mentioned last year that -- in real terms -- is a staggering six times the amount in 1930, the year I was born, a leap far beyond the wildest dreams of my parents or their contemporaries."

He said that a mere 2 percent GDP growth rate -- and has been forecast -- isn't such a terrible thing.

As the population is growing by only 0.8 percent it seems obvious, he mused, that per capita there would be 1.2 percent growth.

"In a single generation of, say, 25 years," he said, "that rate of growth leads to a gain of 34.4 percent in real GDP per capita. In turn, that 34.4% gain will produce a staggering $19,000 increase in real GDP per capita for the next generation. Were that to be distributed equally, the gain would be $76,000 annually for a family of four. Today's politicians need not shed tears for tomorrow's children."

That's alright then.

But here we must parse his judgment.

The delicate, but most important element is "were that to be distributed equally." Currently, it isn't. Currently, the exaltedly wealthy get very slightly more than an equitable share. Shouldn't something substantial be done about that?

Still, there's growth.

You might fear, though, that any growth has been achieved because Americans are so very much smarter than they used to be. (Oh, dream with me a little.)

Buffett doesn't agree.

"US citizens are not intrinsically more intelligent today, nor do they work harder than did Americans in 1930. Rather, they work far more efficiently and thereby produce far more. This all-powerful trend is certain to continue: America's economic magic remains alive and well."

But what about the rise of the machines? What about the worry that we'll all become robots or simply be eliminated -- or, in the case of the wealthiest, retired into a very sad cryogenics clinic in Utah?

Buffett seems to believe that our metal masters won't control the future as much as some fear. In fact, he thinks there's no need to make America great again at all.

"For 240 years it's been a terrible mistake to bet against America," he said, "and now is no time to start. America's golden goose of commerce and innovation will continue to lay more and larger eggs. America's social security promises will be honored and perhaps made more generous. And, yes, America's kids will live far better than their parents did."

Perhaps, thanks to the golden goose, now the whining will stop and everyone will bathe in their good fortune.

And perhaps the moon is purple, the stars are made out of blancmange and the iPhone 7 will fold into four pieces and double as a handkerchief.

Published on: Feb 27, 2016
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