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Former Navy Seal
International Poker Champion
Former CIA Clandestine Operative
Retired Canadian Astronaut & Author
from the world's big
from the world's big
The genius investor hits an optimistic note in a time of dire fiscal predictions.
08 January, 2018
<p dir="ltr">Despite the <a href="https://www.cnbc.com/2014/12/31/dont-worry-about-the-us-economyuntil-2018-economist.html" target="_blank">gloomy forecasts</a> of some fiscal analysts in recent years, Warren Buffett predicts Americans will enjoy economic prosperity for generations to come.</p><p>In an <a href="http://time.com/5087360/warren-buffett-shares-the-secrets-to-wealth-in-america/" target="_blank">editorial</a> for <em>Time</em>, Buffett outlines an argument for why he believes annual GDP growth of 2 percent, the rough average of recent years, will “work wonders” for the American public over the long term. (Most recently, the New York Federal Reserve <a href="https://www.reuters.com/article/us-usa-economy-nyfed/n-y-fed-raises-u-s-fourth-quarter-gdp-growth-view-to-near-4-percent-idUSKBN1E9292?il=0" target="_blank">estimated</a> in December 2017 that the U.S. GDP in the fourth quarter was about 3.98 percent.) The reason has to do with <strong>population growth relative to GDP. </strong></p><p><strong><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODI0MDg0MC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYyMTQyNjMzMX0.DswsHYp3amJ_zpfTT6bufw3M_68MZalmW9Bt5jNdr1k/img.png?width=980" id="476b4" class="rm-shortcode" data-rm-shortcode-id="b3e0a6c010498b525f730105a0fcd9ea" data-rm-shortcode-name="rebelmouse-image"><br></strong></p><p>For example, 2 percent annual GDP growth should be alarming if population growth were to outpace it, say, at 3 percent. But given that the U.S. population will likely increase by about .8 percent annually, according to the birth and immigration rates in Buffett's projection, we can expect <strong><em>GDP per capita </em>to increase by 1.2 percent annually.</strong> </p><blockquote> <p>"In 25 years—a single generation—1.2% annual growth boosts our current $59,000 of GDP per capita to $79,000. This $20,000 increase guarantees a far better life for our children," Buffett <a href="http://time.com/5087360/warren-buffett-shares-the-secrets-to-wealth-in-america/" target="_blank">wrote</a>. </p> </blockquote><p><span>Buffett, who was born in 1930, goes on to illustrate how virtually all modern Americans have access to luxuries—entertainment, medicine, education—that even the richest Americans didn't have a century ago. </span></p><p><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODI0MDg0MS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0ODQyNzY2MX0.2FTxgvPW4YPYaTfu9w70X3HqK_J8vEbpHxu2f5COeGo/img.jpg?width=980" id="bb30c" class="rm-shortcode" data-rm-shortcode-id="f88acef69bba2b94cf69b68ba7153379" data-rm-shortcode-name="rebelmouse-image"><br>This massive increase in standard of living was the result of innovation and productivity, Buffett wrote. But it came at a cost.</p><blockquote> <p><span><span>"To all this good news there is, of course, an important offset: in our 241 years, the progress that I’ve described has disrupted and displaced almost all of our country’s labor force," Buffett wrote. "If that level of upheaval had been foreseen—which it clearly wasn’t—strong worker opposition would surely have formed and possibly doomed innovation. How, Americans would have asked, could all these unemployed farmers find work?"</span></span></p> </blockquote><p>Here, Buffett seems to be drawing an implicit connection to modern Americans' <a href="http://bigthink.com/articles/a-world-without-work-robotic-automation-wont-be-as-bad-as-we-think" target="_blank">fear of losing jobs to automation</a>.</p><p><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODI0MDg0Mi9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY0MTg5OTAxMn0.FAMLWyz8blQRcduGcW5K1j1ksU9NljB7Qv48hzsKKAo/img.png?width=980" id="b20ea" class="rm-shortcode" data-rm-shortcode-id="f0997717db8acaedea332bfc0fe7de45" data-rm-shortcode-name="rebelmouse-image"></p><p><em><a href="http://blogs.edweek.org/edweek/high_school_and_beyond/2017/08/are_you_helping_students_prepare_for_jobs_that_will_be_lost_to_automation.html" target="_blank">Source: edweek.org</a> </em></p><p>Buffett goes on to suggest that disruption is what allows standards of living to improve drastically over time.</p><blockquote> <p>"We know today that the staggering productivity gains in farming were a blessing. They freed nearly 80% of the nation’s workforce to redeploy their efforts into new industries that have changed our way of life.</p> <p>You can describe these developments as productivity gains or disruptions. Whatever the label, they explain why we now have our amazing $59,000 of GDP per capita."</p> </blockquote><p>Still, disruptions in industry and labor have left large swaths of the American workforce in relative stagnation, Buffett argues:</p><blockquote> <p>"The market system, however, has also left many people hopelessly behind, particularly as it has become ever more specialized. These devastating side effects can be ameliorated: a rich family takes care of all its children, not just those with talents valued by the marketplace.</p> </blockquote><blockquote> <p>In the years of growth that certainly lie ahead, I have no doubt that America can both deliver riches to many and a decent life to all. We must not settle for less."</p> </blockquote><div class="video-full-card-placeholder" data-slug="clayton-christensen-on-winners-and-losers-in-the-next-economy" style="border: 1px solid #ccc;"> <div class="rm-shortcode" data-media_id="cEzvjon9" data-player_id="FvQKszTI" data-rm-shortcode-id="450f92bfaa97dea65bf25fa368e7c538"> <div id="botr_cEzvjon9_FvQKszTI_div" class="jwplayer-media" data-jwplayer-video-src="https://content.jwplatform.com/players/cEzvjon9-FvQKszTI.js"> <img src="https://cdn.jwplayer.com/thumbs/cEzvjon9-1920.jpg" class="jwplayer-media-preview"> </div> <script src="https://content.jwplatform.com/players/cEzvjon9-FvQKszTI.js"></script> </div> </div><p> </p>
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Bill and Melinda Gates lay out the key accomplishments of their philanthropic foundation in response to Warren Buffet.
20 February, 2017
<p class="p1">In 2006, famed investor and businessman <strong>Warren Buffett</strong> pledged to give away<strong> 85%</strong> of his fortune to charitable organizations, with the most sizable chunk, valued at the time at <strong>$31 billion</strong>, going to the Bill and Melinda Gates Foundation, the largest private foundation in the world which tackles worldwide issues related to healthcare and extreme poverty.</p> <p class="p1">At the end of 2016, Buffett wrote a cordial letter to the Gateses, asking to outline what impact his gift has achieved so far. <a href="https://www.gatesnotes.com/2017-Annual-Letter" target="_blank">The 2017 annual letter</a> from Bill and Melinda seeks to do just that, calling Buffett’s gift “<span class="s1">the biggest single gift anyone ever gave anybody for anything.” </span></p> <p class="p3">The main accomplishment of the foundation, according to the Gateses, is their work in reducing children’s mortality. In fact, what Bill and Melinda call “Our Favorite Number” is the <strong>122 million children’s lives</strong> that have been saved since 1990. These are children that would have died had the children mortality rate not gone down. The Gates’s philanthropic work makes a particular emphasis on improving global health issues, with reducing the deaths of kids around the world being a goal that inspired them from the beginning.</p> <blockquote> <p class="p5"><span class="s2">“Saving children’s lives is the goal that launched our global work. It’s an end in itself. But then we learned it has all these other benefits as well. If parents believe their children will survive—and if they have the power to time and space their pregnancies—they choose to have fewer children,“ <a href="https://www.gatesnotes.com/2017-Annual-Letter" target="_blank">writes Melinda Gates</a>.</span></p> </blockquote> <p class="p5"><span class="s2">In a recent tweet, Bill Gates points to the chart showing how the number of children’s deaths was<strong> cut in half</strong>, calling it "the most beautiful chart in the world”:</span></p> <blockquote></blockquote><p dir="ltr" lang="en">This is the most beautiful chart in the world: <a href="https://t.co/4R24thLJCS">https://t.co/4R24thLJCS</a> <a href="https://t.co/LT5BSnzAri">pic.twitter.com/LT5BSnzAri</a></p> <p>— Bill Gates (@BillGates) <a href="https://twitter.com/BillGates/status/832336758356455424">February 16, 2017</a></p> <p><script src="http://platform.twitter.com/widgets.js"> </p><p class="p5"><span class="s2">Bill says it was their trip to Africa over 20 years ago that really highlighted the problem for them.</span> </p> <blockquote> <p class="p5"><span class="s2">“As you know, we’d taken a trip to Africa to see the wildlife, and we were startled by the poverty. When we came back, we began reading about what we’d seen. It blew our minds that millions of children in Africa were dying from diarrhea, pneumonia, and malaria. Kids in rich countries don’t die from these things. The children in Africa were dying because they were poor. To us, it was the most unjust thing in the world,” he said.</span></p> </blockquote> <p class="p5"><span class="s2">The Gateses see the reduction of the mortality rate to be indicative of more than just what it shows. The rate also demonstrates the results of other advances in societies that pertain to gender equality, education, nutrition, access to contraceptives, and economic growth. But the biggest reason for the drop in childhood deaths the Gateses attribute to <strong>vaccines</strong>, which now cover about <strong>86% </strong>of the global population. </span></p> <p class="p6"><span class="s2"><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODMzODY4Mi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1Nzg3NjkxOX0.rzIWdrbk0GEX5OHXT4atuMrAWXJhxSRhCAmdbAj08eQ/img.jpg?width=980" id="0d035" class="rm-shortcode" data-rm-shortcode-id="f1a09dce2c5fe0ea5292ab0dcde0e581" data-rm-shortcode-name="rebelmouse-image" /></span></p> <p class="p5">The Gates Foundation partnered with businesses and governments to set up <strong>Gavi</strong>, an organization whose goal is to get vaccines to every child in the world and which has helped immunize <strong>580 million children</strong> around the world since 2000.</p> <p class="p5"><span class="s2">Bill sees vaccines as a great investment, saying that “for every dollar spent on childhood immunizations, you get <strong>$44</strong> in economic benefits.” This is partially due to the money parents save by not taking time off to take care of sick children. </span> <img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODMzODY4My9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1MTQ4NzE5Mn0.niB17SvkCDnJ0BoSwBt1LdFh4my1n4RPfZOdxnhtvaU/img.jpg?width=980" id="28405" class="rm-shortcode" data-rm-shortcode-id="9573a55bea747417e817c4cd834ede0e" data-rm-shortcode-name="rebelmouse-image" /></p> <p class="p5"><em><span class="s2">Bill (L) and Melinda Gates, founders of the Bill and Melinda Gates Foundation, take part in a discussion organized by British magazine The Economist about expected breakthroughs in the next 15 years in health, education, farming and banking on January, 22, 2015 in Brussels. (Photo credit: EMMANUEL DUNAND/AFP/Getty Images)</span></em></p> <p class="p5"><span class="s2">Other accomplishments of the foundation’s work include working with <strong>Family Planning 2020</strong>, whose goal is to provide 120 million more women with contraceptive access by 2020. It is focusing in particular on South Asia and Africa, where most of the women do not use contraceptives.</span></p> <p class="p5"><span class="s2">What would Bill and Melinda like to see as the culmination of the work? They say it’s the “magic number” of <strong>0</strong>. </span></p> <blockquote> <p class="p5"><span class="s2">“We want to end our letter with the most magical number we know. It’s zero. This is the number we’re striving toward every day at the foundation. Zero malaria. Zero TB. Zero HIV. Zero malnutrition. Zero preventable deaths. Zero difference between the health of a poor kid and every other kid,” writes Bill Gates.</span> </p> </blockquote> <p class="p5"><span class="s2">Polio is the closest to eradication, with just 37 cases last year.</span> </p> <p class="p5"><span class="s2">As far as their response to Warren Buffett, the Gateses are both thankful to Buffet and proud of what their philanthropic work has accomplished, saying they don't just use the money to send out grants, but are rather “using it to build an ecosystem of partners that shares its genius to improve lives and end disease.”</span></p></script></p>
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Bill Gates Bill and Melinda Gates Foundation Warren Buffett philantropy childhood mortality health medicine global healthcare Africa Asia