RichardGibbons

I kind of think you don't get it if you think that your statement is some sort of refutation of what Liberty said. Also, there's no arrogance in saying something is unnecessary. Is it arrogant for me to say it's unnecessary for me to wear a pig on my head to survive? It's just unnecessary, no more and no less. I'm not saying that I won't wear a pig on my head, nor that the pig will probably get annoyed and squeal and kick at me. I'm not even saying that I'm not wearing a pig on my head now. But wearing that pig is unnecessary. They do. I think there's very few academics who would claim that they have proof of the absence of a a god. All they're claiming is that they have hypotheses that in combination suggest that a universe without a god is possible. That said, if you want to pretend otherwise because it doesn't fit your world views and ideas of what science is, that fine. Just don't be surprised when people don't take your argument seriously. (That might seem arrogant, but it isn't really. If you know calculus, is it arrogant to point out a math error of someone who, when they add 14 and 17, always gets 21?)

This is a bizarre thing to say.... I'm pretty sure that science has never claimed certainty that a higher being doesn't exist. Science doesn't claim anything with certainty. It's ok, you probably just don't understand what science is. Here's a primer to help you get up to speed: http://en.wikipedia.org/wiki/Scientific_method

After reading Sanjeev's writings for a decade, it would surprise me if he's timing the portfolio. I think he's doing the strategy that he thinks will provide the best returns. He recognizes the value of dry powder at the bottom of the market (and really, anyone who kept their eyes open during 2008 should also). Furthermore, saying, "nothing's really changed since January" makes no sense. I'd say more has changed in the last 5 months than most other 5 month periods I can think of over the last couple of decades. In fact, if this 5 month period doesn't meet your criteria for a change in investment thinking, then I think there's probably only a few that do. In that case, you should basically never have a change in your investment thinking. Which I guess is fine, but it's probably pretty non-optimal if you assume the economy will not affect any businesses you own. Moore's trying to help Sanjeev learn, but I'd guess that there's a fair amount that Moore could learn from Sanjeev. Nevertheless, Sanjeev will almost certainly learn more from Moore than vice versa. :)

The data says "there is enough supply -- the vacancy rate hasn't moved and the rents aren't going up. But the costs of home ownership have skyrocketed. Thus, home ownership is in a bubble." It seems odd to me that you want to interpret it as something else. It's largely explained by Ericopoly's point, that there's been a massive increases in borrowing. When rates are low, People are willing to borrow huge amounts of money to buy houses, but, for some reason seem to be reluctant to borrow money to pay their rent.

Real estate is a producing asset. That's how you know that it's overvalued. I think it has fewer influencing factors than most stocks.

This nicely sums up the conversation, from the third reply on this thread, by hardincap: What a nice statement -- totally summarizes and refutes all the opposing arguments, so that really, you have no choice but to understand. But, Hmm. I'm not sure if it's deliberately not reading the other persons said, or just simply misunderstanding. It's hard to imagine that it's the latter, since hardincap explained it so clearly and concisely. My working hypothesis is that the right wing media, with its one-sided view and demagoguery, has made people believe that they don't need to make sensible arguments when discussing an issue, but that shouting down is sufficient. Hence, the Christie's comments and the response of some people on this thread. The really unfortunate thing is that there are actually good arguments against Buffett's position. It's just that nobody's making them. I think Munger summarizes the situation very well:

Thanks Myth. I'd agree that I'll never persuade Hawk, just as it's pretty unlikely he'd persuade me. I kind of view it as having a similar purpose as a debate. Gingrich's goal isn't to persuade Romney of his ideas. Very good summary by Howard Mark -- it's pretty rare you see such a nice summary given of both sides with such minimal bias. I think the place you want to end up in is not necessarily the Buffett rule, but the ovarian lottery that Buffett talked about years ago (though I'm pretty sure that was someone else's idea). Basically, you want to create a society such that, if you were born randomly into someone in that society, you'd maximize your chance to have a good outcome.

Yes, that's what I mean. 100% tax would obviously be bad. 0% tax would also obviously be bad. There already is a little redistribution of wealth as of 1862. The government determines what is sensible. Most western countries, with the exception of Britain and a few others, have better opportunities to succeed. Basically, this is what economic mobility is all about. (That said, if you want to argue about which countries are the best at creating really rich people and really poor people with huge gulfs between them, then US is pretty good. Though Russia and China seem to be catching up in that respect, too.)

Nor, at reasonable levels, does it significantly disincentivize the anyone from trying to move from one to the other.

The whole idea of taxes are that they redistribute assets for the benefit of society. For instance, defense and policing are to the benefit of society, so we redistribute assets to ensure that we can pay for these things and society benefits. It's not about ensuring that the person or corporation from whom assets were taken receives benefits proportional to the assets that were removed. I would guess that almost every person and corporation receives benefits disproportionate to what they pay (most more, and some less). Though the right to live in a relatively free country with laws and low corruption is pretty valuable to me (and presumably to most corporations).

I assume you are being facetious since this is the Corner of Berkshire & Fairfax Message Board and not Mother Jones. Yes, I was.

But corporations are people, so you're taking the tax from two people and saying it all applies to one!?! :)

Totally right, IMO. More importantly, you then don't have "too big to fail".

Basically everything in that wikipedia link implies that there isn't significant economic mobility in the USA. It isn't under dispute. The answer to your question is that the inequality has been great.

Yeah, you'll also find you're wrong about that. Search for "social mobility", and you'll find out that USA is typically one of the worst countries in the world when it comes to social mobility. Basically, the rich get richer, and the anecdotal dot-com millionaires are not representative. e.g. http://www.guardian.co.uk/business/2010/mar/10/oecd-uk-worst-social-mobility Basically, if you look at the evidence, it's very hard to escape the conclusion that in the USA, the richer are getting richer, and the poorer are getting poorer. That said, I think that this topic is one of those where "it's is difficult to get a man to understand something, when his salary depends upon his not understanding it".

I suspect he's figured out that there's the potential to create as much positive change through his public persona as he does through his wealth. In effect, he's solving the global problems with his money, and solving with the national problems with his jawboning. He's an impressive guy, making such an effort near the end of his life to leave the world in a better place than it was when he entered it.

Well, you can think that, but you could also look at the evidence. Consider the "Winners take all" graphs here, particularly the second one. http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph Basically, for a generation, all the income growth has gone to the upper 20%. There's a bunch of evidence that show this. I speculate that's a natural consequence of globalization and union busting (both relatively good things, IMO). I'd agree with you that we're risking rioting in the street because of things like this. It seems to me pretty likely that if OWS does not result in significant changes, there will be a much more violent version of OWS some time in the next decade. That's why I believe that we should look for ways to reduce inequality. Finland, for instance, seems to have figured out some good ways to reduce inequality, while maintaining a productive economy. There are probably lessons to be learned there.

Yeah, I largely agree with you, Cardboard. The reason that I've raised this argument is because the last 2 pages before my comment were a bunch of rich guys chanting, "It's all the poor's fault that they're in that situation. All they have to do is step up." And that's clearly insane, and it's a bad idea to let insanity go unchallenged, because someone might believe it. The easiest way to do that is to create a counterexample that shows it's insane, which I did. (Tim, the reason that it seemed ridiculous was because it is. Take what the person is saying to the natural extreme is what creates a counterexample.) My main point is, inequalities in society are necessary, and saying "It's the poor people's fault that they're poor" is simplistic because we need the poor (and a bunch of other reasons). At the same time, if you get too much inequality, bad stuff happens. We've lived for a generation where the benefits of society's growth has gone basically entirely to the rich. The rich might like that, but it's a really bad thing, because you will eventually get society breaking some random direction. Like the Chavez in Venezuela and the rise of the religious rule in Iran. USA is in a pretty good place, and it would be bad to make the inequality so great that the poor rise up and take the country in some random direction that has a good chance of being much worse than where we are now. If you get big enough inequalities, I think it's pretty obvious that it will eventually break, and the outcome will be very unpredictable, but probably bad. To me, the easiest solution that's the most likely to have a good outcome is to reduce income inequality. Actually doing it is a bit harder. :)

So, you think the solution is for everyone to upgrade their skills? Hmm, so you'd prefer to live in a world where there are no barbers, baristas, fast food restaurants, people growing and harvesting food, child care, grocery stores, malls, garbage men, physical laborers etc. I think it would be a pretty bad thing to eliminate any retail business, any businesses involving food, and really, any other business that uses low-cost labor in its supply chain. I'm pretty sure that, given long enough without food, I'd die, and it wouldn't surprise me if the same thing would happen to you. Or do you really mean that you'd just like to retain the illusion that that's possible for everyone to be wealthy, so that you can pretend that the inequities of society are entirely because the poor don't make an effort?

Because it's a lie that they've made more true sacrifices than anyone else. People like to espouse this myth, but good luck telling that to the people working two jobs to keep food on the table. Largely, success is a matter of luck (being smart probably helps too, but being smart is also a matter of luck). I think from a monetary standpoint, I'm more successful than most of my peer group. But it was mostly luck, and there's many areas where I wasn't as lucky. That's the whole idea behind the ovarian lottery. If you don't want to pay your fair share, I understand it -- you would like to keep everything you have. But you'll have to deal with it, because that's the cost of living in a democracy, and because it's basically indefensible allocating such a huge percentage of the total output of society to such a small percentage of people. And people are figuring that out.

The refutation is that, as income inequality gets too high, the poor/middle class will rise up and kill the upper class. This is very bad for you. There are also other bad things, like lack of roads making commerce hard, lack of laws and police making avoiding being beaten up, robbed, and raped more likely, and various things like death and various hardships resulting from negative externalities.

Netnet, yeah, that's pretty clear to anyone who looks at the evidence. That said, in a way, Packer is right -- Obama hasn't done a great job. His main problem was that he was negotiating in good faith, and starting from a position that should be acceptable to both parties. Instead, he should have recognized a bit sooner that the Republicans weren't negotiating in good faith. So, his strategy should have been to take an unreasonable position from the start, so that he could have more point to concede. In that way, the Republicans could have claimed a victory, but the results would have been what Obama actually wanted from the start. That said, Obama does deserve some leeway. It wasn't at all clear from the start that the Republicans' only goal would be to oppose anything that was proposed. And, one should generally assume from the start that you're working with someone who's negotiating in good faith, rather than assuming that they don't actually have principles, but are just being obstructionist. But he should have figured out much faster that the Republicans' primary goal isn't to achieve the most beneficial outcome for the nation.

"If a minimum wage is a good thing at $10.00/hour, wouldn't it be an even better thing at $20.00/hour or higher?" So, do you live your life this way? Eating 2500 calories a day is much better than eating 500 calories a day, so you try to eat as much as possible every day, often exceeding 10,000 calories? There are plenty of things in life where the maximum benefit doesn't come at the minimum possible value nor the maximal possible value. It seems very clear to me that minimum wage is likely one of those things.

It's because of stock/option equivalence. A synthetic short, which is short calls and long puts, is equivalent to a short position. So, if there's a bunch of people who want to short but can't find shares, you get the price to borrow the shares increasing. Then, of course, it would make sense to do a synthetic short instead, to avoiding the expense of borrowing. So everyone would do that instead. So, that pumps up the price of puts and decreases the price of calls. (How much? Well, I'd guess that it would get skewed to such an extent that you'd get the same profit from lending out your long shares as you would doing a synthetic long.) For what it's worth, this also happened with Fairfax back in the day. When the stock was at $150 or so, you could make $10 by converting from long stock to a synthetic long. Worked out pretty well. :)

Not much, though it does depend on the degree of badness of the outcomes. Luckily, the cost of solving global warming is fairly low, like 3-5% of GDP, so call it roughly the cost of the Iraq/Afghanistan wars (to bring it back it to Uccmal's point). So, I'm assuming here you're talking about other expensive, low probability guesses. Awesome! We're agreed. I never would have pegged you for someone willing to spend money on environmentalism! Yeah, I'm being facetious. I know that you haven't actually bothered looking at the costs, and therefore believe that saying "it costs too much" is a persuasive argument. I know that you don't understand that the costs are relatively low compared to potential risk of, say, something that disrupts food supplies causing a large portion of the earth's population to die. That said, I can understand that you probably don't want to understand the issue. It takes some time to read about it and think it through, and this is definitely one of those "don't read stuff that disagrees with our beliefs, or would be inconvenient" things. It is kind of ironic, though, that an argument that you believe is evidence that we shouldn't address global warming is actually an argument that we should.