In Hungarian (Magyar) there’s an expression that when translated into English goes something like this, “The one making the accusation is the one guilty of the offense.”
Keep that penetrating phrase in mind as you digest what Warren Buffett said that follows.
In an interview with CNBC, Warren Buffett said the following:
- “We are prosperity. We should take care of people who’ve become roadkill because of something beyond their control … I think that’s the obligation of a rich country,” Warren Buffett says.
- He said the benefit of free trade is rather “invisible,” and in fact the policy has done some damage to those dislocated workers.
- “In a country with $65,000 in GDP per capita … you do take care of the people that for one reason or another … have become roadkill…”
- “I’m 100 percent for free trade. I think it has benefited the country enormously and will continue to benefit it. But the benefit of free trade is invisible. … There’s nothing in Walmart that says you saved 8 percent because we bought this somewhere other than American manufacturers…”
- “You have this huge national benefit unseen but you ruined the economic lives of people who are 50 or 55. They are not going to be retrained and relocated … they became uneconomic in the world of economy. Rich countries can take care of those people to follow policies which benefit all of us to take care of the relative few who are dislocated.”
The Journalistic Questions…
When trying to unpack what someone is doing, the basic questions of a trained journalist are, “Who, What, When, Where, Why, How, and How Much?” And then “Follow the Money…”
Recall that historically and biblically, money is not evil. Money is considered a blessing. Rather it is the inordinate, disproportionate love of money in an exaggerated way, that is the evil. Making anything that is not God, into a deity to be worshiped, that’s idolatry.
Back to Buffett and his comments. So, who are the ones that promoted that so-called free trade?
If Buffett admits that so-called “free trade” has “ruined the economic lives of people,” in what sense is that trade “free?”
There is, as the entitlements system is currently constituted, a taxpayer cost for those who are displaced by “free trade.” Those with multinational aspirations are benefiting from shipping jobs overseas, and then they expect the federal government to take care of those whose lives they’ve helped destroy?
Why do people who want to work feel a loss of a sense of personal value when their job gets shipped overseas or south of the border? Why do some turn to problematic practices in the wake of that disruption in their lives?
But there is still more to this ruin that hollowed out once great cities like Detroit than meets the eye.
That shipment of jobs overseas slowly erodes the American economy. A nation must produce in order to have wealth. If the production is lost, then wealth is lost, albeit it may be lost by many, but still can benefit a select few. Free trade is not ‘free,’ rather, it is ‘costly trade.’ Take one more look.
When jobs are shipped to communist China, for example, there is no less than a triple cost, plus the ripple cost.
- First, that lost job in the U.S.
- Second, the taxpayers may end up picking up the tab for entitlements that Buffett and others says he now wants the federal government to make.
- Third, the U.S. has to pay more for national defense, because we’ve just made – for example – China richer, and part of that Chinese wealth goes into their growing military might. It’s a prescription for slow, national U.S. suicide.
In terms of the ripple effect, U.S. companies that want to stay competitive, now feel they too must buy products from overseas. Still more American jobs are lost. The vicious cycle goes on. Free trade? Hardly.
Walmart and Clayton Homes
There is nothing wrong with wealth honestly earned. Rather, honestly earned wealth should be celebrated. But when that wealth is earned through a manipulation of the American economic system, why should the bulk of the people pay for that dislocation which was caused by the mega rich doing the manipulation?
For those who care to recall, back in the 1980s Walmart – Buffett’s example – used to advertise that their products were routinely “Made in the U.S.A.” Planned or not, when they began to shift those purchases to nations overseas, that slogan at Walmart was dropped, but shoppers weren’t told that those products were now “Made in China” or wherever. Tens of millions were now trained to shop at Walmart.
Independent businesses vanished. Why is it that so many smaller towns, that thrived pre-Walmart, are now becoming ghost towns? Once Walmart put them out of business, they often closed the local Walmart, only to open a Walmart Supercenter several miles down the road.
Bulk buying power gave Walmart an edge over smaller, local competitors. Walmart’s strategy that put smaller rural businesses, out of business, is not so different than part of what Clayton Homes has arguably done in several markets. Clayton has closed, per their own information, 100 (+/-) retail centers that were losing money. Sources have told MHProNews that before closing those stores, in various cases, independent retailers were put out of business first. So, Clayton’s strategic and economic moat was expanded, as more independents were driven out of business.
It must not be forgotten what Kevin Clayton said in the video linked here. Kevin said that it would be okay with “Warren” if he (Clayton) lost money for 5 years, so long as he was increasing the Clayton manufactured housing moat. Clearly, if it is okay to lose money company wide, then it is obviously okay to lose money at a retail center for a time, so long as competitors are being put out of business.
Once the Buffett mindset is better understood, what sounds like altruism turns out to be greed in disguise. If a firm decides to move overseas, why should they dump the cost of those men and women who have been displaced onto the rest of society? Why isn’t there a provision where the firm has some direct level of responsibility for the economic harm their decision causes?
That’s rhetorical, but it underscores how Buffett and others like him are okay with shipping jobs overseas and letting taxpayers foot the bill. They get to sound caring, when in fact it is those shipping jobs overseas that slowly hollows out America. Play that scenario out to the horizon, and there would be no one working in the U.S., save on minimum wage type positions. Once robotics takes those over, then what?
While one may agree, disagree, or be neutral about the Trump Administration’s style, the 45th president is arguably right to try to use tariffs, tax cuts, regulatory reforms, and other tools to ‘bring back’ U.S. jobs. By making U.S. energy more plentiful, that makes it less costly. That helps level the playing field between nations that are more energy dependent on others.
Then President Obama mocked candidate Trump, saying ‘what magic wand did Donald Trump have to bring back manufacturing jobs?’ Per then POTUS Obama, those jobs ‘were never coming back.’
POTUS Trump has proven with some 600,000 new jobs in American manufacturing alone in just 2 years, that work like steel, automotive, and other plants can be brought back to the U.S. The wages of workers is going back up. Controlling immigration is another example of how POTUS Trump is trying to use the law of supply and demand to help American workers, who are in turn voters.
For those who care more about style than substance, they may never grasp the genius behind the Trump economic plan. Tariffs historically were part of what protected American industries and made our nation richer than others to begin with. Keep in mind that tariffs used to pay a huge part of federal expenses, before the income tax and other changes went into effect here in the U.S.
There are arguably plenty of things that need to be corrected in the U.S., that could make this nation into an even greater economic powerhouse. While people like Buffett often praise more taxes on the rich, they themselves escape those taxes, while the rising millionaires end up paying a significant portion of those taxes.
The changes that hobbled America were done slowly, over time, not unlike how Buffett and his moat work slowly and over time. It will take time to unwind the arguably deep harm that was started over a century ago with laws like the graduated income tax, which is a Marxist or socialistic concept. But when one looks a North Korea, or Venezuela, those at the top live like kings, while their people live in poverty, or even desperation.
Rephrased, there is a steady stream of propaganda aimed at millions, including the business and investor class that watches a video like the one from CNBC above.
In diplomatic language, President Trump speaks nicely about North Korea’s Chairman Kim or Chinese President Xi. He’s not praising dictators. Rather, he’s dealing shrewdly, doing very tough business with rough people, using polite diplomatic language. It’s savvy.
The race for 2020 is on. The Special Counsel Robert Mueller’s probe results not only cleared the Trump campaign and the president himself, it claimed in the brief seen so far that no American was guilty of collusion with Russia. But frankly, that last part is not quite so. Some in the Democratic National Committee (DNC) and the Hillary Clinton campaign bought and paid for Russian propaganda that formed the basis of a fake ‘dossier’ that was used as a pretext to spy on a GOP presidential campaign. The federal government’s spy apparatus was weaponized during the Obama era, and it was done to favor the campaign of Democrat Hillary Clinton.
There are people in both major parties who have done some dastardly deeds, and we as political independents here at MHProNews aren’t blanketly praising or condemning either party. Each has weaknesses and strength, just as people do, businesses or organizations do. Our weakness is typos. We all have strengths and weaknesses, and rather than hide it, one should make the best of it. That’s why a wheat and chaff approach must be used with all people and all things.
To dot the i, and cross the t on Buffet and his statements above. The man is shrewd, and smart. But Buffett speaks in a kind of code, or with what some might say is a forked tongue. What Buffett says sounds compassionate, its arguably deceitful. What Berkshire’s surrogates in manufactured housing say may sound sweet as honey, but once swallowed, it arguably turns sour in the stomach.
The Omaha-Knoxville moat is designed to kill of independent businesses. That’s not compassion. Displacing American workers, to increase a profit margin overseas, that’s not compassion. These vexing issues won’t be fixed overnight. One must be as long-term in thought as Buffett himself is to defeat this kind of plan and this type of player.
To be forewarned is to be forearmed. We thank those sources in the industry that keep informing us, so that we can keep informing you.
Finally, the rise of some new producers of HUD Code manufactured housing suggests that the moat can be beaten. Certainly, some are willing to engage in the struggle, because they’ve put millions of dollars and their reputations on the line. More on that another time. That’s another episode for today of “News through the lens of manufactured homes, and factory-built housing,” © where “We Provide, You Decide.” ©
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Submitted by Soheyla Kovach to the Daily Business News for MHProNews.com.
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