Thursday, June 22, 2017

Why Warren Buffet's ending the budget deficit in five minutes is a fairy tale at best

There I was, minding my own business on Linkedin and I saw this:

Warren Buffet is intervening in government at a radical level? That can't be right! So a quick trip to Snopes:
So yes, it’s true that one of the most respected businessmen of modern times did indeed voice the quote now widely ascribed to him in various e-mailed forwards, although his remark was more in the nature of a wry commentary on the workings of Congress than a serious proposal for tackling the budget deficit. 
The rest of the lengthier e-mail in circulation (see example quoted below) has nothing to do with Warren Buffett. What is presented as the “Congressional Reform Act of 2011” began circulating on the Internet in October 2009 as the “Congressional Reform Act of 2009.” In a nutshell, what is presented as a proposed 28th amendment to the U.S. Constitution isn’t something that has been put forward by any member of Congress and thus is nothing more than a bit of Internet-based politicking.
Thank you Snopes. Now don't get me wrong. Everyone that read this and smiled, or passed it on, is a smart person, they simply did not pick up on this instantiation of a weapon of influence. Should I, or any reader, think "this can't happen to me", then we have missed the point of this blog. We might have dodged this particular one, but at the end of the day, all of us are impacted by perception management.

Back to the story at hand, I found the "reform act" to be a fun read and agree with a lot of it, especially:
Congress loses their current health care system and participates in the same health care system as the American people.
To which I reply with a hearty amen, but that is neither here nor there. This is a perceptor and this post engendered comments like:
Sadly, not even that can end the deficit. In the next election, the people that were taxed and the people who lost benefits would elect new politicians.
This has been proposed before. Until the entrenched clowns on Capitol Hill understand the principles of the Republic, this won't happen.
There are about 100 comments, I just picked two. And there is nothing grossly wrong with either. The problem, at least what they taught in programming in the 1980s is GIGO, (Garbage In, Garbage Out). If you make your wonderful and logical, (at least according to your belief system), comment based on a fabrication, that is like the warning of Matthew 7. We are building a house on a foundation of sand, if there isn't a solid foundation, the house falls down with the first storm.

What are some of the perceptors at work in this real life example.
1) Warren Beaty, even people that do not follow the market have heard of him, if famous then smart, if smart, then right.
2) Most of us, including myself, don't really understand the deficit in detail, but we know it is bad. It is kind of like living next to an active volcano, it didn't blow yesterday, maybe, hopefully ....
3) The implied enemy is the US Congress and durn it, they really should eat their own home cooking in terms of retirement system, health coverage and pay raises. Who can argue against that?

Summary: It is a good thought provoking, fun piece of writing, that taps into the angst of the American people. However, it will never amount to much. Part of the problem is that it smells a bit like the chain letter it is. Also, it is a bit long, has been around a long time so you may have seen it a decade ago and have that "deja vu" feeling when you read it and finally, it is too long and impersonal.