Tuesday, June 23, 2009

"After the Great Recession" - A NYT interview with the President.

I'm a little late to the party on this - as you'll no doubt notice I took a restful one-month vacation from blogging - but it is still pertinent. At the end of April, The New York Times published a lengthy interview with the President which focused on the recession. I felt like I could strongly see the influences of Warren Buffett throughout. One such example is where the President talks about the financial sector playing a reduced role after the economy regains its footing (although still a very large and significant role). He mentions how this is likely to be a good thing, as our nations top minds might find their way more into the sciences rather than pushing financial contracts around.

Obama in the interview:
That doesn’t mean, though, that Silicon Valley is still not a huge, critical, important part of our economy, and Wall Street will remain a big, important part of our economy, just as it was in the ’70s and the ’80s. It just won’t be half of our economy. And that means that more talent, more resources will be going to other sectors of the economy. And I actually think that’s healthy. We don’t want every single college grad with mathematical aptitude to become a derivatives trader. We want some of them to go into engineering, and we want some of them to be going into computer design.

At nearly every Berkshire meeting I've attended, Warren and Charlie have lamented how much brain power has gone into hedge funds rather than into the sciences. You get the impression that somewhere out there is the guy who could invent the longer lasting lightbulb or cure Parkinson's, but he ended up buying CDS for some bulge bracket bank. I think that in a broad sense this is probably true. Many of the smartest kids will go to where the gold rush is, even if there is little to no contribution made to society by that particular professional function.

I would like to see the next gold rush occur in creative ways of using renewable resources or curing diseases which afflict the proletariat, but then I'd also like to see world peace and unicorns. Out of those four, I'd say the first has the best shot of really happening. Despite the recent drop from $150 barrel oil, we may well have hit peak oil in the past decade.

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