Buffett: Bank woes are "poetic justice"

[flashl]

TORONTO (Reuters) - The woes in the U.S. financial sector are "poetic justice" for bankers who designed and sold complex investments that have since gone sour, billionaire investor Warren Buffett said on Wednesday.

...

But he warned that the U.S. dollar will continue to slide unless the country can rein in its yawning trade deficit -- the "biggest factor" behind the decline. Still, he said, the U.S. economy will "do very well over time."

Buffett, one of the world's wealthiest people, appeared to see irony in the fact that many of the banks who marketed complex investments which have now crashed are bearing much of the fallout.

"It's sort of a little poetic justice, in that the people that brewed this toxic Kool-Aid found themselves drinking a lot of it in the end," he said.

Reuters

[whistle]

1. That is correct, the U.S. has nothing of value to trade with any producing nation

...except military technology and war

[sam sarrha]

2. probably 'Everybody's' pension fund is bundled with those failed mortgage, we need to "Immediately"

put a ban on all outsourcing, and start building up SMALL BUSINESS, and quit subsidizing multinational corporations that do not live here, or produce here.

we need immediate small tariffs on all imports to fund establishing small business. and building solar/algae/wind/ag hemp sustainable energy, a free America from oil project bigger than the moon project, make it a march of dimes project.. get everyone involved ..K thru elder care homes.

or we are screwed.

[ixion]

3. well said

and spot on. :applause:

[ursi]

5. best suggestion! Stop outsourcing!

[nealmhughes]

4. Here the US is sitting on the richest piece of real estate in world history, and trying to live off

our "reputation." Well, if one makes nothing that anyone wishes to buy (now we do have weps and aerospace and damned good HVAC), then is one surprised? And why do people not wish to buy US goods? Because we don't make them any longer! A southern textile industry made sense: the cotton is grown there, therefore by lessening transport cost, the thread can be spun close to the fields, and then to lessen costs even more, the thread woven into cloth and then cut into garments, then sewn all close to the source. That was the genius of US heavy industry: Pittsburgh and Birmingham and Youngstown had the iron ore, limestone and the coal for steel foundaries and even water, all conveniently located near one another, put the workforce near the source and the infrastructure will follow.
Now, in an attempt to save on labor, all is shipped that can be overseas to avoid those pesky labor and environmental laws. The greed of the US has been its own downfall of late. One could morally equate it nearly to the same cycle that led to slave labor fueling the industry of the textile trade in the UK in the Antebellum South -- cheap labor (captive, quite literally) and cheap labor in Lancashire (no more farm jobs, therefore economically captive labor): a capitalist's wet dream, add in railroads and steamships, et voila. . .
Of course, it didn't last for long. Nor can our present system: something will give and it won't be pleasant for a great many people for quite a while.

[Warpy]

6. Once again, you can't concentrate capital at the top

into a few hands and have the bottom substitute debt for substandard wages and expect the system to last for long. It is inherently unstable and will collapse. The people at the bottom always get hurt the worst, but the people at the top who fall on top of them don't escape injury.

This has repeated itself so many times through our history that you'd think we'd start getting wise to it. Unfortunately, economics seems dedicated to finding ways around it all, to fatten the rich without beggaring the poor, something that is impossible, and every 50 years or so there's a new generation with no memory of the last cycle, ready to swallow the same old snake oil.

Had the protections of the New Deal been left in place, complete with the progressive tax system and sensible tariffs protecting US jobs, we wouldn't be in this mess. However, the rich couldn't wait to get rid of it, and now they're going to take the fall with the rest of us.

[nealmhughes]

7. This has been entirely of the government's making: they alone are

tasked with tariff, treaty, and interstate commerce. Were someone to take their capital and infrastructure out of the country, there is no reason that they cannot be taxed to such an extent that they will be beggared as long as they conduct business inside the US.
One, of course, has the right to reside where they wish and keep their money in whatever bank they wish, but once they start selling across our border, then their autonomy is gone.
The idea that "retraining," whatever that encompasses, is a panacea for the US labor force is ludicrous. An large industrial economy is based in a few basic things: feeding people, creating raw materiel for manufacture, and the transport, housing, health care, and other ancilliaries that go with the job of production. Without production, we are beggars of a sort, relying upon the largesse and our past glorious reputationn for others who do provide goods for us with the US as middlemen: witness Marx's derision of Britain as a "nation of shopkeepers."
We need only laugh now at "What is good for GM is good for the county," when we look at Toyota, Nissan, and even Ford Europe. Microsoft will soon be as quaint as the Model T after Tata and "Super Happy Software Szechuan" gets finished with their agenda.
All it takes is for the East and South to tire of North America and we shall be bowing to Europe. Not that I feel that this is a bad thing in and of itself, as Europe now exhibits the spirit of the Enlightenment more than the US, and the hope and exhiliration of recovering from the 50s, 60s, 70s, and 80s in Eastern Europe should not be sneezed at nor taken as a flash in the pan. Soon, Slovenia shall be up to par with US and Canadian living standards, as they almost are already! A small country between Italy and Austria in the Alps about which we know almost nothing save that it was once part of Imperial Austria-Hungary and then Yugoslavia. If Turkey and Greece and Bulgaria get their old feuds straightened out, watch out Florida and California!
I actually feel a bit jealous of the EU right now: no tyranny, Enlightenment, no school boards trying to insert an overt unscientific Fundamentalist agenda in schools, universal human rights, etc. ad nauseum: in short, what we ought to be. What a shame.
Will our kids be moving to Zagreb or Sofia as immigrants for opportunities soon?