Charles Munger Sr. was interviewed by Liz Clamen on Fox Business News, Monday. She asked if he thought taxes should go up. His response, “the rich should pay more”. There was no definition of rich—but Munger is a multi-BILLIONAIRE—so he can afford a few million more in taxes.
Jerry Brown wants to raise taxes on the rich, he calls $250,000 per year, rich.
Charles Munger, Jr. Supported the Amateur Arnolds tax increases. Molly Munger, sister and daughter of Jr. and Sr. wants to raise taxes by $120 billion ”for the children”
(actually money will go to unions to assure bad teachers stay in the classroom and they control the curriculum, not the parents).
Munger Sr. denounced those that bought gold—as a hedge. How did the gold buyers do vs. those who invested in his company? “The fact is that people who bought gold a decade ago were far better positioned than those who put their money in Mr. Munger’s company, Berkshire Hathaway. For the value of a share of Berkshire Hathaway has collapsed over the past decade to barely more than 74 ounces of gold from the 238 ounces it was worth a decade ago.”
Enough said.
The Munger Games
| Editorial of The New York Sun, 5/6/12 |
One would think that a man as wealthy, as smart, and as old as Charles Munger would have known better than to suggest that people who buy gold are uncivilized. “Gold is a great thing to sew into your garments if you’re a Jewish family in Vienna in 1939,” Mr. Munger told Rebecca Quick of CNBC, “but I think civilized people don’t buy gold, they invest in productive businesses.” The fact is that people who bought gold a decade ago were far better positioned than those who put their money in Mr. Munger’s company, Berkshire Hathaway. For the value of a share of Berkshire Hathaway has collapsed over the past decade to barely more than 74 ounces of gold from the 238 ounces it was worth a decade ago.
Ms. Quick had beckoned Mr. Munger into this morass by telling him he was one of the greatest investors of all time and asking him whether there is anything happening that seems “like déjà vu.” Mr. Munger replied that the panic that “came as a predecessor of the Great Recession had common themes that are always the same — the crazy greed, the crazy leverage, the crazy delusions, and I think we were very lucky that the outcome wasn’t worse. . . . Of course, we knew it was coming, and we always used to say, well, what do you think about the crazy consumer credit or the crazy this or the crazy that, well, what’s going to happen. I would always say, it’s going to have a very bad result, but I can’t tell you when.”
Where the uncivilized boors who adjusted early to this crazy period gained the judgment to buy gold is a mystery Mr. Munger didn’t pursue, though they better protected their investors than Mr. Munger and his partner, Warren Buffett, did. Mr. Munger dodged Ms. Quick’s query about the current campaign among central bankers in respect of easy money. “They went to the whip,” Mr. Munger mused. “They don’t have an unlimited number of weapons. We’d be in way worse shape if both political parties hadn’t backed huge central bank intervention. The big mistake was made by allowing the boom to go so crazy, so much evil and folly to run so rampant.”
Mr. Munger credits Alan Greenspan for having recognized that he was wrong. “He’s the only one that’s done that,” Mr. Munger said. “Everyone else has managed to look at this enormous [word unclear] and leave the previous ideas intact. . . .” He then began talking about economic virtue and sin. “What happens is that in an economy with a certain among of basic virtue, like a bunch of Germans or Japanese or something, can resort to a lot of extreme Keynesian intervention and help things. But if your whole cultural system disintegrates — say the way it did in Greece where everyone was living with no work and a lot of make believe and fraud and what have you — then the Keynesian stuff won’t work.”
Ms. Quick said she took it that Mr. Munger was “not in Paul Krugman’s camp.” Mr. Munger allowed that Professor Krugman “is one of the smartest and most articulate people we have, and he is very often right.” But not before remarking that Mr. Krugman “doesn’t sufficiently understand the kind of sin that the Democrats like. You know, the crooked plaintiffs lawyers. That stuff affects the body politic, and affects how well the economic principles work.” Then he moved on to talking about how Chairman Greenspan was “”blind not to step on the boom.” The problem, he said, was that Mr. Greenspan “really overdosed on Ayn Rand.”
Hmmm. Was it Ayn Rand on which Mr. Greenspan overdosed? In 1966, the future Fed chairman wrote for her newsletter an essay called “Gold and Economic Freedom.” It begins with the sentence “An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense — perhaps more clearly and subtly than many consistent defenders of laissez-faire — that gold and economic freedom are inseparable. . .” The essay ends with the assertion that “[i]n the absence of the gold standard, there is no way to protect savings from confiscation through inflation” and that “[t]he financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.”
“This is the shabby secret of the welfare statists’ tirades against gold,” Mr. Greenspan warned. “Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.” So maybe it was something else on which Mr. Greenspan was over-dosing when he arrived at the Fed. And maybe the reason that Berkshire Hathaway shares have collapsed in value is that neither he nor Mr. Munger were paying attention to the civilizing effect of gold and economic freedom.
You miss the duplicitous wording of the Munger measure. If passed, some of the money NOW going to education can be stopped. LAUSD has hundreds of “teachers” assigned to classrooms that actually work as administrators–the 1% cap is a fraud. Yes, the Munger measure makes it a “felony” to abuse the money. Prop. 25 says that if there is no balanced budget by June 15no legislator should be paid–and the courts ruled that the specific wording did not mean what it said. This is a transfer of funds from the rich, to assure fewer jobs in California–the measure works because there will be fewer children in California schools–parents will move to other States. Worse it gives openly corrupt districts like LAUSD more money for its special interest slush funds. CA government schools have plenty of money, just not much in the way of competent management.
May 8, 2012 at 3:43 pm
When you actually read the Molly Munger initiative, you’ll see that specific language states the money cannot go towards increasing current teacher salaries and benefits. It also puts a 1% cap on administrative costs. It also amends the penal code to make it a felony to misuse or misdirect the funds. Maybe you should take the time to read the initiative.
May 8, 2012 at 11:35 am