Berkshire Hathaway Vice President (BRK-A, BRK-B) Charlie Manger on Saturday announced Vermont progressive senator Bernie Sanders (I-VT) as the winner in the country’s political struggle for income inequality. A hot economy and a loose monetary policy will eventually reduce the country’s wealth gap, Munger predicts.
“Because everything is thriving so high and interest rates are so low, what will happen is that the millennial generation will have a hell of a time to get rich compared to our generation,” Munger said.
“The difference between rich and poor in the rising generation will be much smaller,”
“He did it by accident, but he won,” says Munger.
President Joe Biden introduced a $ 1.9 trillion stimulus in March and is pursuing additional spending of nearly $ 4 trillion to improve national infrastructure and provide additional support for American households. Meanwhile, the Federal Reserve keeps interest rates close to zero to support economic growth.
In an interview with NBC News, Sanders praised Biden for acknowledging “the enormous crises this country is facing and the extent to which people are suffering as a result of the pandemic.”
“People who shout about it are idiots”
Munger’s remarks about Sanders contrast with critical comments made in 2019 by two other progressive leaders: Queens Congresswoman Alexandria Ocasio-Cortez and Massachusetts Senator Elizabeth Warren.
Munger questioned the weight of income and wealth inequality, downplaying the intelligence of politicians like Ocasio-Cortes and Warren, who drew attention to the problem.
“I do not think [Ocasio-Cortez] he knows who Adam Smith was, ”Manger told Yahoo Finance editor-in-chief Andy Server. “People who shout about it are idiots. It will pass by itself. “
“It’s a problem if enough politicians are shouting about it. That makes it a problem, “he added.
Biden has taken a number of steps to reduce income inequality. In a speech to Congress on Wednesday, Biden called on corporate America to pay its “fair share,” citing a tax increase set in its $ 2 trillion infrastructure proposal that would raise the rate for corporations from 21 percent to 28 percent.
Plus, Biden has proposed a $ 1.8 trillion tax increase for the wealthy for American families, which includes a universal preschool, two years of free community college, and many other initiatives.
These measures will come on top of the recent $ 1.9 incentive bill, which provided 1,400 checks to many Americans and provided a federal $ 300 supplement for weekly unemployment benefits, among other measures.
Data released by the Bureau of Economic Analysis on Thursday showed that the US economy grew at an annual rate of 6.4% in the first quarter, stimulated by the stimulus and the gradual recovery.
First-quarter data show that consumer spending jumped 10.7 percent due to a massive inflow of $ 2.36 trillion in household income.
While the stimulus has helped many lower- and middle-income Americans, the wealthy have also prospered during the recession, thanks in part to a booming stock market and the fact that many industries such as technology have been safe from the coronavirus.
In total, US billionaires added $ 1.6 trillion to their net worth at the time of the coronavirus outbreak, according to an analysis by Americans for Tax Justice released April 15, the net worth of Berkshire Hathaway CEO Warren Buffett, now 103.7 billion, increased by 50% during the pandemic report found.
The super-rich have amassed this wealth, while tens of millions of workers have lost their jobs, exacerbating inequality that had already reached elevated levels before the pandemic.
Buffett’s commitment to philanthropy
For nearly a decade, Buffett has been a staunch supporter of tax increases for the rich.
In 2013, amid an economic expansion that brought a strong return on investment but lagging wage growth, Buffett called for higher taxes on the rich, saying his tax rate should not be lower than that of his secretary.
Buffett, a Democrat, backed former Secretary of State Hillary Clinton in her 2016 presidential race and hosted a fundraiser for former President Barack Obama in 2011. Buffett spoke privately with Biden during the 2020 campaign, but did not support him.
As Buffett’s net worth grew, so did his commitment to philanthropy. In 2006, at the age of 75, with a net worth of $ 44 billion, he partnered with the Bill and Melinda Gates Foundation to start distributing almost everything. The promise, which calls on rich people to give away more than half of their wealth, came in 2010.
Today, more than 200 of the world’s richest people have made a promise, including Airbnb CEO Brian Cesky, Netflix CEO Reed Hastings and Facebook (FB) CEO Mark Zuckerberg.