Berkshire Hathaway Vice President Charlie Munger launched a scathing bipartisan attack on the American political establishment, citing both parties, Democrat and Republican, as having fringe wings that are “full of idiots.”
In a recent interview, Munger blamed the economic crisis of the past decade on unfettered capitalism and market deregulation – a policy driven by Republicans – while also hinting that the new wave of radical Democrats led by Alexandria Ocasio-Cortez is no less crackpot.
The 95-year-old Munger rarely shies away from offering his opinion on economic and political matters, commenting extensively on everything from presidential elections to bitcoin. In 2018, Munger described bitcoin as anti-social, stupid and immoral – a position mirrored by his business partner Warren Buffett. This time around, Munger reserved his ire for the current state of Washington, D.C., which according to him, is now run by idiots from both sides of the aisle.
Asked about his reaction to Berkshire Hathaway’s share price decline, Munger slapped down the question in typically contemptuous fashion. In his assessment, boom and bust cycles are both unavoidable and necessary, which is why trying to get rid of them can only have terrible results.
Expanding on this point using the 2008 financial crash as case in point, Munger pointed out that a right-wing desire for an everlasting boom is what led to the deregulation of the financial industry and the subprime credit bubble that brought the whole edifice down. “Ideological nuttiness” were the words he used to describe this phenomenon that saw the market left to regulate itself and eventually eat itself with severe consequences for the global economy.
“People were making so much money and the economy was doing so well. Because it was being puffed up by this idiot boom and idiot expansion of consumer credit…Your life for the next three weeks would be more pleasant if you went on heroin. But it would totally destroy you. And that’s what the economy does when it allows itself to be seduced by the potential for an idiot boom into allowing all this gross immorality in this and this craziness to take over.”
If one were not familiar with Munger’s profile before watching this interview, one could be forgiven for thinking that he is some sort of left-wing politician as he railed against regulatory rollback and economic greed. This, however, is how Munger is on any given day: honest, unfiltered, and compelling.
The majority of Munger’s interview focused on his disdain for right-wing market fundamentalism, but he also targeted the increasingly influential radical left-wing without mentioning them by name. Unlike Warren Buffett who has come out to criticize Alexandria Ocasio-Cortez’s Modern Monetary Theory (MMT) plan, describing it as “danger zone,” Munger merely made a vague “both sides” reference to partisan foolishness in D.C., in what must feel like a studied snub of the DNC’s shining star.
In his words:
“Both parties have wings that are full of idiots. That is the nature of the game and the reason it’s worked as well as it has is that the people in the middle have sort of over time tuned out the idiots on both. But every once in a while the idiots given control and of course that has terrible consequences. So you’ll regret the nature of the system.”
Last modified: July 2, 2020 8:13 PM UTC