Warren Buffett Criticizes What He Helped Usher In

In an interview posted today Warren Buffett describes the economy exactly as I did several times (here, here, and especially here) - pretty good for owners of capital, but pretty lousy for workers. It is worth reprinting a major chunk of what I wrote, because this situation was entirely the work of a rabid leftist policy agenda combined with political rhetoric that I predicted and chronicled all along.

Mark Perry has a post up today that perfectly illuminates what I (and others) have highlighted about this economy - it sucks for the lower skilled but isn't too bad for investors and owners. Perry notes a guy who laments the sad state of the manufacturing recovery using Census data, while Perry highlights, using Census data as well, that manufacturing profits are booming. That's what Washington has created for us, a modest recovery that is accruing to capital and not to labor. How did they achieve this feat? Easy. First we must start with a misdiagnosis of the financial crisis. Politicians blamed it all on the banks and business, when it was largely the creation of government through highly distorted incentives. They further chose to tackle a financial panic, a monetary event, as a traditional business cycle recession and applied traditional counter-cyclical Keynesian "stimulus". Also, coming out of the financial crisis, the politicians ramped up both anti-business rhetoric and an anti-business policy agenda the likes of which this country hasn't see in seventy years. So as the monetary disruptions healed, the government was sucking the oxygen out of the economy by crowding out private capital to borrow and spend on "stimulus" and sending risk-takers to hide under their desks. So as the world beyond our borders recovered, having indulged in less over the top business bashing, US manufacturers have been able to secure alot of business exporting our great products to the world, but have little incentive to hire (ObamaCare) and expand here at home (card-check, EPA, NLRB, etc). Ergo the profits but not too much hiring. So that's how we got an economy that stinks for "workers" but is OK for "owners".

It was a no-brainer to call this one. This is exactly what a leftist policy agenda is designed to achieve and it is all it is able to achieve, and this is precisely what Warren Buffett is describing. As much as I admire Mr. Buffett, I think his political understanding is appalling. He advocates for the politicians that have created this kind of economy, so it is slightly repugnant for him to criticize it or lament it.

Of course, this won't explode the great persistent and pernicious myth that the American left stands for the little guy, the working man. The American left stands for itself and it's friends, full stop. Whatever the American right stands for is subject to debate, but where leftism leads us should be beyond dispute based on today's economic environment.