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News Link • Corruption

Karl Denninger: Charlie Munger's False Choice

Notice, again, how Munger doesn't think he should have to "suck it in and cope." This is the mark of a psychopath - a man who believes that others serve him, and that he has the right to compel them to do so - at gunpoint if necessary. There is little if any difference between someone doing this via extortion in the government realm and the same thing being done via shoveling people into trenches face-down. Buffett, 80, has praised U.S. policymakers for the financial company bailouts. The world's third-richest person, who oversees businesses selling insurance, candy and recreational vehicles, told Berkshire shareholders last year that the U.S. needs a stable financial system. Of course he has. The Government bailed him out! And let's not forget - Buffett placed bets that could have done very material damage to Berkshire on the S&P 500 index - that is, he sold "naked" long-term PUTs, European style, which he cannot get out of. The problem with people like this is that once they make a bet like this, if they're big enough, they are then able to go to the government and effectively stick it up, threatening the "end of the world" if they don't get what they want. In third-world banana republics the warlords perform their extortion with AK-47s shoved up your nose. In America we don't really do things any differently, other than through the selection of the weapon to be employed. When people like Buffett and Munger perform their "magic" with Treasury and others, they simply threaten the end of the economic world if they don't get their way - and for the little guy, the outcome is the same - he winds up face-down in a trench. Whether you are there as a consequence of starvation or a bullet in the back of the head doesn't much matter, in point of fact - either way you're hosed. Now Charlie, about those bailouts.... what happens when, as was declared yesterday, the government spends all of its tax revenue on entitlement programs, leaving nothing for more bailouts? Charlie and Warren have but one advantage in the end game that will and must arrive -when it all comes apart he's too old and tough to be particularly appetizing to the hoard of zombies.

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