Warren Buffett and our kid's future.

[Gone4Good]

Quote:

Originally Posted by samclem One thing's for sure--if they save at the rates their parents did (on average), their future may be one of reduced prosperity.

Isn't that conceding the entire point? How can both that, and this from Buffet be true?

Quote:

The babies being born in America today are the luckiest crop in history.

[samclem]

Quote:

Originally Posted by Gone4Good Isn't that conceding the entire point? How can both that, and this be true?

Right. I'm not defending Buffet's position, I disagree with significant parts of his assessment. And I think maybe the purpose of his letter is to "influence rather than inform." He's not a disinterested bystander in our nation's larger public debates at this busy time of public reflection and "deciding."

[Rustic23]

Samclem +1

[Markola]

Wage growth aside, in the next to last paragraph, Buffet talks about the benefit to our quality of life through the abundance of products that an ever-more efficient and productive economy will provide. Every labor-saving gadget in one's house or garage, when it was invented, was likely only available to the very wealthy of the time at first. Think of the shoe box size cell phone. Now every broke student has a vastly better smart phone in their pocket, and monthly rates are coming down. That's a tremendous quality of life improvement for most people in society during the same time period of the chart showing flat wages overall.

[dallas27]

I'm sorry, but it is an intriguing chart, and has a obvious inflection point at 1973. How we can discuss it without singling out the event that caused it is just not possible for me. Inquiring minds want to know.


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[audreyh1]

Quote:

Originally Posted by dallas27 I'm sorry, but it is an intriguing chart, and has a obvious inflection point at 1973. How we can discuss it without singling out the event that caused it is just not possible for me. Inquiring minds want to know.

I started high school?

[NW-Bound]

I was getting out of high school? The US involvement in Vietnam War was winding down? Nixon went to China (72)?

[REWahoo]

Quote:

Originally Posted by NW-Bound Nixon went to China (72)?

And I got to come home early!

[bclover]

Quote:

Originally Posted by MichaelB I think Mr Buffet's point is that the standard of living will continue to rise and our children will enjoy and benefit from that.

+1

[dallas27]

The only event i can think of is that is when we adopted a fiat currency system.


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[Gone4Good]

Quote:

Originally Posted by Markola Wage growth aside, in the next to last paragraph, Buffet talks about the benefit to our quality of life through the abundance of products that an ever-more efficient and productive economy will provide. Every labor-saving gadget in one's house or garage, when it was invented, was likely only available to the very wealthy of the time at first. Think of the shoe box size cell phone. Now every broke student has a vastly better smart phone in their pocket, and monthly rates are coming down. That's a tremendous quality of life improvement for most people in society during the same time period of the chart showing flat wages overall.

When I was growing up in the 1970s/80s I remember having cable T.V., a telephone, a personal computer (1982), a car in the driveway, video games (1970s), dishwasher, clothes washer & dryer, a microwave oven, etc. If I had to guess I'd say my family was probably a bit on the low side of middle class back then.

Today, I basically have all of those things plus the internet. That's not as huge an improvement as everyone seems to think.

[ERD50]

Quote:

Originally Posted by Gone4Good When I was growing up in the 1970s/80s I remember having cable T.V., a telephone, a personal computer (1982), a car in the driveway, video games (1970s), dishwasher, clothes washer & dryer, a microwave oven, etc. If I had to guess I'd say my family was probably a bit on the low side of middle class back then. Today, I basically have all of those things plus the internet. That's not as huge an improvement as everyone seems to think.

Are you serious?

Are you saying that the current choices are NOT "huge improvements" over a 1982 computer, or a 1970's video games (Pong?)? The internet can't just be brushed aside.

The World of Personal Computers in the 1980s Was A Wacky, Wonderful Place | Smart News | Smithsonian


-ERD50

[Gone4Good]

Quote:

Originally Posted by ERD50 Are you serious? Are you saying that the current choices are NOT "huge improvements" over a 1982 computer, or a 1970's video games (Pong?)? The internet can't just be brushed aside.

They're definitely improvements. But the argument that's being made is that nobody really needs a pay raise because smartphones. And no, I don't think the improvements in stuff today from when I was growing up is so overwhelming that it justifies that argument.

[Gone4Good]

Quote:

Originally Posted by ERD50 Are you serious? Are you saying that the current choices are NOT "huge improvements" over a 1982 computer, or a 1970's video games (Pong?)? The internet can't just be brushed aside.

So here's perhaps another way to think about things.

If you look at that chart above, since 1973 productivity increased about 140% and wages increased about 8%.

If you could live today at your current wages, with all of today's technology, or live with 1970's technology but have more than twice the real income you have today, what would you choose?

I think what answer you give largely depends on how wealthy you are today. Poorer people would probably choose to give up the technical gains in favor of a massive increase in income whereas richer people might choose the opposite.

If that's true, then it is probable that a collection of relatively wealthy folks will overstate the value of technological improvements to people on Buffet's "losing side" of income gains.

[Mulligan]

Quote:

Originally Posted by Gone4Good When I was growing up in the 1970s/80s I remember having cable T.V., a telephone, a personal computer (1982), a car in the driveway, video games (1970s), dishwasher, clothes washer & dryer, a microwave oven, etc. If I had to guess I'd say my family was probably a bit on the low side of middle class back then. Today, I basically have all of those things plus the internet. That's not as huge an improvement as everyone seems to think.

I thought I was middle class in the late 70s and early 80s. You just ruined my childhood memories, G4G. No cable, a party line phone, and no personal computer. We did have pong though. But still its funny that what you said has entered my mind watching old movies from 70s and 80s. I have thought more than once only the internet and refinements of what we had is all that has changed. I am not a big fan of smart cell phones, so I will conveniently ignore that. But I have seen some sweet car phones in the movies from back in the day though.


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[ERD50]

Quote:

Originally Posted by Gone4Good They're definitely improvements. But the argument that's being made is that nobody really needs a pay raise because smartphones. And no, I don't think the improvements in stuff today from when I was growing up is so overwhelming that it justifies that argument.

But not just smartphones, improvements overall. It's still subjective though, so...

Quote:

Originally Posted by Gone4Good So here's perhaps another way to think about things. If you look at that chart above, since 1973 productivity increased about 140% and wages increased about 8%. If you could live today at your current wages, with all of today's technology, or live with 1970's technology but have more than twice the real income you have today, what would you choose? ...

But that choice doesn't exist, and it ignores the gains in the 3rd world countries. The real question is - are you better off today with flat wages AND all these tech advances, or not? And I think almost everyone would say they are better off today, even if real wages are stagnant.

Of course they would be even better off with the tech advances AND real wage growth, but that's not even worth asking

From John Prine:

http://www.metrolyrics.com/far-from-...ohn-prine.html

Quote:

Well a question ain't really a question If you know the answer too

https://www.youtube.com/watch?v=M_hCDPIjT6k

-ERD50

[meierlde]

Lets go back 5 years further, say 1968. We lived in Mi but did not have AC, By that time the phone had become a private line as the phone company did not build party lines in newer subdivisions. The cars did not have A/C either. Obviously no computer, since they lived in large glassed in rooms at the time. In our case we had a washer and dryer, going from wringer to automatic in 1958 or so. But the microwave came along later, as did a portable dishwasher due to the way the kitchen was laid out.

[samclem]

New U.S. Single Family Homes

The median-sized new home today is 900 sq ft larger than in 1973.

[Gone4Good]

Quote:

Originally Posted by samclem New U.S.Single Family Homes

I'm not sure that means much without accounting for debt and savings rates over the same time period. Hurray, we're house poor!

[Mulligan]

Quote:

Originally Posted by ERD50 But not just smartphones, improvements overall. It's still subjective though, so... But that choice doesn't exist, and it ignores the gains in the 3rd world countries. The real question is - are you better off today with flat wages AND all these tech advances, or not? And I think almost everyone would say they are better off today, even if real wages are stagnant. Of course they would be even better off with the tech advances AND real wage growth, but that's not even worth asking From John Prine: http://www.metrolyrics.com/far-from-...ohn-prine.html https://www.youtube.com/watch?v=M_hCDPIjT6k -ERD50

All I know is I would rather have my middle class home with all my present day amenities and even having to clean my own home over being an extremely wealthy aristocrat from centuries gone by.


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