Warren Buffet and Economic Wisdom

Last night I watched a fascinating interview with Warren Buffet given by Charlie Rose. Buffet is, of course, one of America's greatest financial investors. Because of that I was interested to see what he would say in light of America's current economic condition. I believe the interview was conducted in November. I will sketch a few highlights that informed my thinking:

1) Buffet had an unshakable belief that the American economy will return and grow. He stated that the same ingredients that have made America great over the last 200 years are still present and that America has gone through these economic cycles before. He highlighted that during 1979 to 1982 recession there was unemployment of 10% and experts were saying that our economy would go to Japan and other places, and all the while a young Bill Gates and his friends were eating pizza and drinking coke in Albuquerque, New Mexico. Who would have been able to predict the boom that would be Microsoft. He also stated that we've been through these cycles for the last 200 years, but the ingredients for growth (our laws, innovation, creativity, openness to harnessing the human potential) still remain.

2) When asked about the growing advance of China and India outpacing America, Buffet said that he was greatful that the pie of economc wealth is increasing and that he thinks it is a good thing that China and India may be coming up with solutions to our own problems. This is not bad. The solutions that they may come up with will be shared in the areas of energy and technology advancement.

3) When asked about the Chineese having a greater GDP by the mid century than America, Buffet said it is possibly going to happen because they have 4 times of population of America. They are bound to grow faster at a percentage level because they are starting at such a lower economic position. This is not a problem. We will benefit from their growth. Furhter it is good that the world economically prospers because you do not want a world where America is perceived to have all the the "goodies." This creates more envy and a greater climate for war. He also acknowledged that the world is going to gain from being able to observe our nation's 200 years of economic development. Chaina and India can go futher than they would by seeing and learning from our mistakes and successes.

3) I was impressed with Buffet's humility. He admitted that his success comes from the way he is wired and the unique opportunities that this society affords. None of us are self-made men. He stated that if he was in a thrid world country where success has to be built on having a strong back, he would be very poor. He couldn't go around in that society and claim his gifts of "capital allocation, capital allocation," because there would be no capital to allocate. He gave the example of the middle weight boxing contenders are not successful by their own effort. They succeed with the people who build the large arenas so 13,000 people can pay to watch the fight and their audeience expands to several million more for those who want to watch the fight on satellite or cable pay-per-view."

Some conlcusions:
1) Be pateient with the economy.
2) Culture is the foundation of economic acheivement.
3) Be humble, know your place and call in life. It is God who ultimately gives success.
4) It is interesting that in the nations where there is the strongest economic growth there are strong and growing representations of evangelical Christian faith, namely China, Inida, and Brazil. Could their economic growth be linked to providing an environment for the gospel to flourish and for missionaries to be sent out from these places?