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Old 07-09-2017, 10:11 AM
 
Location: Ruidoso, NM
5,170 posts, read 4,730,147 times
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Quote:
Originally Posted by MinivanDriver View Post
Nice of you to cherry pick. Mean wealth? Sure. Median wealth, we're ranked #5 behind Switzerland, Australia, Norway, and Luxembourg. Two of those countries are banking havens. One of those countries has enormous wealth from oil. And Australia is a largely homogenous country occupying a mostly-empty continent with roughly 7% the United States population.
Sure we are high on *mean* wealth, but it all goes to a few people. And we are sliding on that one as well. It wasn't so long ago (40 years) that we were #1 on both measures.

And BTW, you have mean and median mixed up.
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Old 07-09-2017, 11:49 AM
 
2,240 posts, read 1,385,700 times
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It's not shocking at all that we're returning to a multipolar world economically. A state of bipolar, and then a brief period of unipolar power is not sustainable and has very rarely if ever existed in world history. We will be along the elite nations for the foreseeable future, much like Britain (but with many larger, more sustainable advantages).

To predict anything other than a stable u.s in the world stage is to say all major systems in the world will fail and a very tough time period would follow. The pieces are in place for buffets predictions to be accurate as long as there's semi decent leadership and there isn't a lose lose scenario of major powers throwing their power away in a world war.
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Old 07-09-2017, 12:17 PM
 
24,706 posts, read 26,777,106 times
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Quote:
Originally Posted by MinivanDriver View Post
Nice of you to cherry pick. Mean wealth? Sure. Median wealth, we're ranked #5 behind Switzerland, Australia, Norway, and Luxembourg. Two of those countries are banking havens. One of those countries has enormous wealth from oil. And Australia is a largely homogenous country occupying a mostly-empty continent with roughly 7% the United States population.
I generally like your posts, but you screwed it up here.

1st, you confuse the definitions of median and mean. The graph showed the median wealth, which means 50% above that line and 50% below. The mean is the average and skews toward a few high wealth people. The median is a better measure of wealth.

That said, the graph doesn't tell the whole story either. It's true a few small banking and oil enclaves are part of the story.

Much of the difference in wealth can also be explained by the fact that real estate is much more expensive in other developed countries than in America. Since most middle class people have a high percentage of their wealth in their homes, it would make sense that the median wealth would be higher in other countries with higher real estate costs. But as we all know, the house you live in is a very illiquid asset, and not really a very good measure of wealth. Truly wealthy people don't have the majority of their wealth in their homes.

Next, Australia isn't really all that homogenous. The real story is Australia has a privatized Social Security system that mandates people save 9% of their salaries and employers match another 9%. This money gets invested in stocks and other financial assets. They've effectively forced everyone to save and invest money. I wish America would do the same, but any talk of privatizing our shaky Social Security system brings howls of protest from the left, many of whom are financially illiterate and trust government way too much. That said, as desirable as I find a system such as Australia's, the transition cost of moving to their system certainly wouldn't be easy or cheap. Australia also has sky high housing prices. Combine that with a mandated 18% savings rate, and of course people there are going to be wealthier.

I also think cultural values here play a strong role. Let's face it. Americans don't value deferred gratification. You don't get wealthy or stay wealthy if you're into instant gratification. Thanks to the media, advertising, and government enabling, we've been bombarded with millions of messages that essentially say more spending = more happiness--and we believed it. Government likes it that way because a populace that lacks self discipline is much easier to control and manipulate.
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Old 07-09-2017, 12:23 PM
 
24,706 posts, read 26,777,106 times
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Quote:
Originally Posted by Pub-911 View Post
The problem here is not with anyone's beliefs, but with the OP's flagrant misuse of words such as "inevitable", "indefinite", and "guaranteed." These are words that Buffett does not use and that no other sane person ever would either.
^^Gotta agree with you on this point.
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Old 07-09-2017, 01:02 PM
 
Location: East Coast of the United States
15,664 posts, read 18,206,684 times
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Quote:
Originally Posted by mysticaltyger View Post
^^Gotta agree with you on this point.
So, how is my characterization an exaggeration of what Buffett said? What do you think his view is on how the U.S. economy will perform over the next few decades?

This is an exact recent quote:

"Your children and your children's children and all that, they will live far, far, far better than we live with 2 percent growth."
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Old 07-09-2017, 02:09 PM
 
Location: Ruidoso, NM
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Quote:
Originally Posted by BigCityDreamer View Post
"Your children and your children's children and all that, they will live far, far, far better than we live with 2 percent growth."
Whose children? The average person hasn't partaken of the GDP growth for the last 40 years.
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Old 07-09-2017, 07:55 PM
 
Location: East Coast of the United States
15,664 posts, read 18,206,684 times
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Quote:
Originally Posted by ohio_peasant View Post
He’s not by any stretch lying, but even so, his “predictions” are more abstract maxims and exhortations of the style of Ben Franklin’s Autobiography, than any attempt at actually forecasting the future, let alone pronouncing actionable investment advice.
If it is true that American innovation will produce steady economic growth for decades, then it follows that the stock market will continue to go higher as well since it is driven by company profits.
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Old 07-10-2017, 08:06 AM
 
6,815 posts, read 4,408,035 times
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Quote:
Originally Posted by rruff View Post
Sure we are high on *mean* wealth, but it all goes to a few people. And we are sliding on that one as well. It wasn't so long ago (40 years) that we were #1 on both measures.

And BTW, you have mean and median mixed up.
Mean or median, how many American households in 1977 didn't have a telephone of any kind - and now have a cell-phone? How many otherwise promising kids in 1977 dropped out of high school? Today they lament excessive student loans - because of college. And on and on.

The demographic that's sustained marked decline since 1977 is blue-collar white men. But they're not representative of the median; or the mean.

Quote:
Originally Posted by mysticaltyger View Post
...Much of the difference in wealth can also be explained by the fact that real estate is much more expensive in other developed countries than in America. Since most middle class people have a high percentage of their wealth in their homes, it would make sense that the median wealth would be higher in other countries with higher real estate costs.
Owner-occupied residential real estate is a quintessentially American fetish. In most other industrialized nations, the percentage of home-ownership is much lower. Simply put, people view housing as a place to hang their hat, and not their castle.

Instead, I'd argue that the "difference in wealth" - to the extent that there is one, which is debatable - stems from lower lifelong costs. By this I mean better state-management pension schemes, reducing the need for the individual to save for retirement. Systematized cost of health care (not that I didn't say "free" healthcare), and highly subsidized cost of higher education. Reduce or eliminate the palpable out-of-pocket costs for education, health care and retirement, and suddenly there's more apparent wealth - even if laundry detergent, gasoline and a gallon of milk cost 2X more.

Quote:
Originally Posted by BigCityDreamer View Post
If it is true that American innovation will produce steady economic growth for decades, then it follows that the stock market will continue to go higher as well since it is driven by company profits.
This was my conjecture in a currently ongoing thread in this Forum. But I also think that innovation is slowing down; today there's less watershed intellectual change than there was in the "golden century" of 1870-1970, during which we went from candles and horses and duck-feather quills, to lasers and mainframes and a successful manned mission to the moon. In contrast, we've been talking about a manned mission to Mars for nearly my entire lifetime - and my hair is really starting to go gray (albeit for other reasons).
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Old 07-10-2017, 08:51 AM
 
Location: Ruidoso, NM
5,170 posts, read 4,730,147 times
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Quote:
Originally Posted by ohio_peasant View Post
Mean or median, how many American households in 1977 didn't have a telephone of any kind - and now have a cell-phone? How many otherwise promising kids in 1977 dropped out of high school? Today they lament excessive student loans - because of college. And on and on.
We didn't have to make this lame argument in the past, because we got tech advances *and* higher living standards. Now we just get new tech. Cell phones exist even in the most squalid countries. Should they be satisfied as well? And I think the great majority of young people would rather live in a world where an expensive college education wasn't a requirement for having a chance at a decent job.

It isn't that we couldn't have higher living standards. Per capita GDP has doubled while median incomes have gone nowhere. It's just that all the gains have gone to a few.
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Old 07-10-2017, 09:08 AM
 
Location: Ruidoso, NM
5,170 posts, read 4,730,147 times
Reputation: 4206
Quote:
Originally Posted by ohio_peasant View Post
But I also think that innovation is slowing down; today there's less watershed intellectual change than there was in the "golden century" of 1870-1970, during which we went from candles and horses and duck-feather quills, to lasers and mainframes and a successful manned mission to the moon. In contrast, we've been talking about a manned mission to Mars for nearly my entire lifetime - and my hair is really starting to go gray (albeit for other reasons).
The main reason is because the pace of scientific discovery has slowed. The low hanging fruit has been plucked. Even quantum physics is now nearly a century old. It has been a well known science for a long time. Fusion energy was been promised for 50 years, and that one has clear economic benefit, but reality keeps intruding.

Even so, computers continue to advance and this will result in massive changes to our economic system and way of life. Any long range forecast that ignores this can... well, be ignored.
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