워렌 버핏과 찰리 멍거: 50년간의 파트너십

### 금주의 주요 경제 뉴스: 인플레이션에 대한 연준의 입장, 트럼프의 관세 제안, 러시아 자산에 대한 G7의 조치
* 📉 연준의 제이 파월 의장은 **인플레이션 수치 호조에도 불구하고 금리 인하 가능성에 대해 신중한 태도**를 보였습니다.
* 🇺🇸 래리 서머스 연준 의장은 트럼프의 경제 정책을 **"가장 인플레이션이 심한 정책"**이라고 비판하며 **모기지 금리가 10%에 달할 수 있다**고 경고했습니다.
* 🔒 래리 서머스는 동결된 러시아 자산을 우크라이나에 금융 지원을 제공하는 데 사용하기로 한 G7의 결정을 **효과적인 경제 외교의 "중대한 진전"**이라고 평가했습니다.

유럽이 의회 선거에서 우향우로 돌아서고, 샤리 레드스톤이 파라마운트 합병에 대한 생각을 바꾸고, 연준은 천천히 접근합니다 - 블룸버그 월스트리트 위크.

Europe takes a right turn. Shari Redstone takes a pass,
and the Fed just takes it slow. This is Bloomberg Wall Street Week. I'm David Westin. This week, Bloomberg's Stephanie Flanders
on what happened to Europe. There was a particular rumbling of the sort of center
and the established parties. Ruchir Sharma of Rockefeller International
on what happened to capitalism. Every time we have a crisis,
the bailouts get bigger. And Ron Olson of Munger, Tolles & Olson
on his half century at the side of Warren Buffett
and Charlie Munger. Neither Warren nor Charlie are typical. And we start with the backward
looking economic numbers of the United States this week
and the forward looking statement of economic projections
from the Fed and what the Chair, Jay Powell, had to say about it. And we welcome back
our very special contributor. He's Larry Summers of Harvard. So, Larry,
great to have you with us.

What did you make out if we had some encouraging numbers actually on inflation at the same time? The Fed is a little reluctant to talk too quickly about cutting. The numbers were encouraging. It's one month, but, you know, every month is data. And I think the right posture has to be agnosticism about where we are going forward. It's hard to interpret the Fed's forecasts because they probably had a lot of inertia. With everybody having set their view coming into the meeting. So it's not really clear that the projections that people were making genuinely reflected the new numbers. That was a point that Chairman Powell stressed. We also have fiscal policy issues coming up that in a sense are on the ballot come November. There's increasing discussion about the alternatives between Joe Biden and Donald Trump. This is the fiscal policy. And you've been outspoken on the question, as others have been, about the possible inflation with the Trump economic policy.

Take us through that. Look, I, I don't think there's been a more inflationary presidential economic policy platform in my lifetime. Perhaps George McGovern in 1972, in some ways, would be a comparison. But other than that, I don't think there's been remotely comparably irresponsible set of proposals. His tariff proposals are the biggest supply shock, pushing up prices not just of imported goods, but of all the goods that compete with imported goods. That anybody who's worried about gouging should think that more competition, including from abroad, is a very, very important step. And he's for much greater restrictions on the supply of labor, leading to more wage inflation pressures. And he's for scaling back the subsidies to renewable energy, raising energy costs. So look at it from demand. Look at it from supply. This is a prescription for a major increase in inflation. And, of course, the expectation of that major increase in inflation, and possibly the fact that the Fed

will be under much more pressure
to prove that it's credible. This could easily be a prescription
for a 10% mortgage rate, something that I lived through
when I bought my first house, but that I didn't
think we were going to see again in the United States. This is really dangerous stuff. Let me pick up on the tariffs issue
specifically. As we know, President former President
Trump traveled to Capitol Hill this week. And there were reports in the press
that he floated at least as an idea replacing some or all of income tax
with tariffs. There was one report that actually
it would just replace it entirely. What would that do
from an at macroeconomic point of view? Look, people miss people misspeak sometimes they're not serious
about the things they say. That's probably a feature of candidate Trump. But replacing the income tax with revenue with tariff would be the worst macroeconomic policy proposal in U.S. history.

It, of course, burdens the middle class and the poor who purchase goods. We goods that exist on international markets. So it's regressive ish. Many economic commentators have suggested, but that is actually the least of it. Think about it this way. The Smoot-Hawley tariffs, which did enormous damage. Some people would say made the Depression great. were 6/10 of 1% of GDP. If you replaced half of income tax revenues, not all like he talked about. If you replaced half of income tax revenues with tariffs, those would be taxed. Those would be tariffs six times Smoot-Hawley levels. That's got the potential to do enormous damage to the competitiveness of every U.S. exporter, to do huge damage to all kinds of workers who use imported goods in what their businesses produce to create a downward spiral as much higher prices for everything we import. Means consumers have less to spend on

everything else. Create worldwide economic world warfare as the rest of the world responds. This is a prescription for the mother of all stagflations. Now, I don't think that's likely to happen
even if President Trump is elected. So I don't know that markets
should be discounting all of that. But this is something that I think should be viewed
very ominously. Larry, let me turn to another subject
that you and I have talked about in the past,
but we had developments this week over in Bari, Italy, with the meeting of the G7
as they took action actually on the Russian frozen assets. As I understand
it, it's not so much the principle, but the interest off of them
that would back a bond. You early on on this program called
for the use of those Russian assets, the central bank assets, the government
assets to be used for Ukraine. Are you pleased with what they've done? Have they gone far enough?

This is a major step forward. I am very pleased, but I don't think they've done everything that could be done. Look, the best estimate is that there's in the neighborhood of $300 billion of frozen Russian assets. Those assets have already been frozen. Nobody thinks they're going back to Russia. So if there are issues about expectations, about fairness, any of that, we cross that Rubicon. Two years ago, the big step they took was not just authorizing the use of the interest, but setting up a loan mechanism. So today, the Ukrainians are going to get access not just to this year's interest payments, but to interest payments out over quite a number of years, perhaps totaling $50 billion or more. I think is ultimately the right thing that is going to be to simply take these assets or take the perpetuity of all the income that they will generate. But $50 billion is a lot of money. It comes at a very important time to provide

a shot in the arm for Ukraine. It's going to be crucial for us,
for the international financial institutions
to work with the Ukrainians to make sure that those resources
are used with maximum effectiveness. And this also, David, does something else that's important. If this had not been done, I and others were very concerned that even if resources from Ukraine could be found in national budgets, it would come out of other vital international expenditures
to combat global warming, to protect against pandemic threats, to reduce global poverty. And so this is also an important step for internationalism. More broadly. It's been a long road on this. And while it didn't start with as aggressive an effort from the U.S. government as I might have hoped, I really want to congratulate Secretary Yellen, especially people
at the National Security Council, her deputy, Wally Adeyemo, Sherpa Duleep Singh for having driven something that is really profoundly important. This was U.S. leadership with others.

being reluctant, and it was a case study in the last few months of effective, determined, creative economic diplomacy. Okay, Larry,
thank you so very much for being with us. That's Larry Summers of Harvard,
our very special contributor here on Wall Street Week. Coming up, European parliamentary elections
took a right turn this week. We go over what this could mean
for the European economy with Bloomberg's Stephanie Flanders. That's next on Wall Street Week on Bloomberg. This is Wall Street Week. I'm David Westin. Sunday's elections
for the European Parliament delivered a surprise setback
for incumbents in France and Germany. Even leading French President Macron to call a snap parliamentary election
in France next month. And markets have reacted accordingly. To explain the situation,
what's likely to come next. We welcome back Bloomberg senior executive
editor for economics and government, Stephanie Flanders. So, Stephanie, not only does your job require this, but you also have a
podcast called Voternomics

where you talk about economics
butting up against politics. We certainly see that in Europe right now. We see a lot of movement
in the French market, particularly. But I guess it was really triggered
by these European parliamentary elections. Yeah. And you have the European
parliamentary elections, which as you'll remember, it's elections for
the European Parliament, which controls some parts of European policy,
not all parts of European policy. And the sort of headline sounds uninteresting in the sense
that the sort of center grouping that's led by, represented by Ursula von der Leyen,
the current European Commission President, did still emerge as the largest
grouping, got about 60% of the vote. But as expected,
you did have quite a lot of success. About a quarter of the votes
went to far-right parties. And as you say, there was a particular
rumbling of the sort of center and the established parties
in France and Germany.

Olaf Scholz,
Socialist Party was completely hammered by the Alternative for Deutschland
and other parties in Germany. And you had the rise of
Rassemblement National, used to be the National Front,
the far-right party in France. So let's turn to France for there, because that was the immediate
aftermath of this. As we saw President Macron,
I think surprise maybe even his own party and say, let's
have a snap election right away here. At the same time, there's
a real resurgence of the right of center, maybe well right of center of
Marine Le Pen and her party. What could that mean in this election
in terms of the French economy? You know, it's extraordinary. I mean, we had at the start of the, you know, a few weeks ago,
we had the surprise decision by Rishi Sunak to call the election, but he did have to kind of call one
in the next nine months.

And we were just surprised
that he was doing it sooner. In Macron's case. I mean, he surprised people
in his own office, as far as we can see. He held it very close, that decision. He's kind of got a reputation in the past
for having taken enormous risks. He took an enormous risk
in running for president without an established party
all those years ago. And so you can see,
this is kind of part of his M.O., but it has left open
a wide range of outcomes. And the one really source of stability,
ironically, appears to be Italy, and Ms. Meloni who came out
of these elections rather well. There was a time that not that long ago when we thought
she was sort of an extreme, but now she said to
seeming a reasonable centrist. Yeah, I mean, it's very interesting,
isn't it? And we are going to see her
at the end of this week.

We've had her leading the hosting
the G7 summit in Puglia. It's not a bad place to have it
this time of year and very amicable, considered to be a very credible leader
in Europe who has very much been normalized and become the acceptable
face of the far right in Europe. You know, she's got some
problems percolating under the surface. The Italian debt always an issue,
is becoming more of more of an issue. It's now on a more unsustainable path
and could, and has already in fact, is violating the European
Union's rules on how much you can borrow. So she's going to be having a tussle with them
about how much she has to tighten policy, and that could make her more politically
unpopular in Italy. But, you know, it is interesting. You see the likes of Marine Le Pen in France, who has a much of a very odd
mixture of economic policies.

quite far left policies that I think investors will be concerned about. She, you know, many people are saying the best path for her if she would be the sort of Meloni path of actually building credibility with the markets and being mainstream in economic ways, even as you are being quite far right or certainly culturally right on immigration and other things. So that's another interest. It doesn't look like Marine Le Pen's really going to be able to pull off the same trick that Giorgia Meloni’s pulled off. Well, let's go to the United Kingdom, which is no longer part of Europe because of Brexit. But now we have Keir Starmer and as you just described to the possible path that sounds a little to me like Keir Starmer trying to be really very responsible. He's saying we're not going to increase taxes, but what is the what is the possible issues for the economy in the United Kingdom

if Labor takes over? You know, it's interesting that.
I think there's a quite a lot of expectation.
that the pound will strengthen or at least continue to be.
in reasonably good health if, if and when. And it seems extremely likely.
that the Labor Party will will form the next government.
because Labor has presented a very quite austere.
very sort of sensible policy, not many would say not radical enough.
given the problems facing the UK economy. And of course, if you think about it, David, all the conversations we've had.
about the UK in the last few years, I mean stability is not what we've had from 14 years of Conservative government.
because it's been so many Prime Minister. We had three prime ministers.
your remember in one year. So ironically you have the Labor Party.
coming in as a force for stability. And you know, Keir Starmer.
might actually be the Prime Minister for several years.
and not just for a year and a half.

And finally, Stephanie, we like to try to
look at these things from a point of view of an investor, and foreign direct
investment is terribly important. In recent past, it's really been going a lot to
the United States, not so much to Europe. Given what you've just described, Germany,
France, Italy, the United Kingdom, overall Europe,
does it make it more attractive for foreign direct investment, or less,
or does it just not have much effect? No, I think
that, I mean, there could be an effect. Obviously, they're looking over
their shoulder at the US, the massive spending on the array on infrastructure
in the US. And it's very hard for the Europeans
to match that or to provide the kind of, you know, all those kind of tax
breaks and attractions that has been attracting people to the US. They also don't have the tech tech companies and the companies that have been responsible
for the big rise in the S&P.

They just don't have similar tech leaders
in the European market. So, I think it's still quite a tough sell
after all these years of underperformance. But I would say the UK
certainly has a lot of what you might call upside
potential in this environment. And if you have a more stable climate
in terms of the tax on investments now very low on corporation
profits, all of those things, I think the UK could be could be an
interesting bet over the next few years. But if you have a soaring lots of spending, lots of tax
cuts in the US, particularly under President Trump, well that is also going
to be quite attractive to investors. Stephanie, thank you so much.
Always great to have you with us. That is Bloomberg's
own. She's Stephanie Flanders. Coming up, we look at where the Indian economy heads
next as Prime Minister Modi begins his third term with Ruchir
Sharma of Rockefeller International.

Even though Modi won, it is seen by many people
as some sort of a modern defeat. That's next on Wall Street Week on Bloomberg. This is Wall Street Week. I'm David Westin. And Prime Minister Modi has begun
his third term after an election that did not give his party
the clear majority many had expected. To take us through what
we should expect next, we welcome back now Ruchir Sharma, chairman of Rockefeller
International and author of the new book What Went Wrong with Capitalism.
Welcome back, Ruchir. Thanks, David. So we're going to talk
about your new book. Before that, let's just spend a minute or two on India,
because we talked about it before. You were one of the first ones that I saw who suggested
maybe it wouldn't be a landslide for Modi. What are the possible consequences,
do you think, for economic policy of what we've seen? Well, I think that the way the election

result has been interpreted.
Is that in some ways, it's seen as if this is a two-speed economy
going on in India, that the open consumer is in good health
and almost booming. But the rural economy
in India, in many parts at least, is in some sort of distress. So, I suspect that there'll be some shift in terms of the spending priorities
of the government in favor of more of the rural economy and trying to
do something a bit more about that. But I'd say the big takeaway
of this election, and I think that this is something which
I think has been really underappreciated, that if you look at the elections
around the world, and particularly if you look at even India's
electoral history after an election, it is usually viewed as a mandate
for something. And at the same time,
the opposition, at least for a while, go into retreat
because they've just lost an election. They go into retreat and try and regroup.

What's really unique about this Indian election is that even though Modi won, it is seen by many people as some sort of a moral defeat. Just because the benchmark was so high, and he's ended up with seats which are well short of the majority mark just for his own party. On the other hand, the opposition is already behaving as if it won. It's been emboldened. It's out there much more aggressive. And a lot of the post-poll analysis is why did the opposition do so well? So this is a very strange election that we that it's not been a cleansing or a catharsis in some way. It's been like in terms of the consequences are going to be that the opposition from day one is going to be emboldened, and I daresay almost disruptive. So I don't see that much policy action take place in India given this verdict. You mentioned urban versus rural. What about socioeconomic distinctions?

Because there have been some reports
I've seen that. In fact, one of the things that turned on
Prime Minister Modi was the fact that the lower income
people felt that they'd been left behind. Yeah, but
I think there are many stories in India, because you know what is true in
one state is not true in another state. And I think that's the part about India,
which we have spoken about and something which I think is not, you know, fully understood by many
people that what happened in this election also is that there was no wave,
there was no way for Modi. Instead,
we ended up in the traditional India, where every state had its own contest
in many ways. And so therefore you got an outcome
which was an aggregation of what the various states were doing. And you're right,
there was some feeling in some states which even I travel
to, such as Maharashtra, where a lot of people felt
that they were not getting the benefits

of what was being promised, and they were facing some sort of local issues. So that's true in terms of socio-economic divide. And yes, more of the poor, it seems, did vote, and more of the so-called what they call in India, the backward caste. They voted for the opposition parties rather than Modi. So that's true, but it's a much more nuanced story. But the broad takeaway, as I said, is that I expect very little to get done in terms of new policies over the next year from an economic perspective. One of the things we've talked about in the past was the growth policies of Prime Minister Modi, combined with relative restraint on inflation, being able to really contain that. Is it likely that in order to reach out to some of the people that he did not bring along with him, Prime Minister Modi will be driven to drive higher inflation through more stimulus? I hope not, because I feel that if there's one

relative success story that the government had over the last 5 to 10 years. It was on keeping inflation relatively low. And of course, in India's case, whenever you go out and talk to people, they will always tell you that rising prices is an issue because in India's case, so many people are living at the margin. They can't afford any increase in prices. But generally, in India's case, the inflation performance was much better. In fact, the big problem with the previous government was that they let inflation get out of control. So I think if he has any sort of, you know, like sensitivity to what people want, and I think this is true everywhere, we see it in the US as well, that we don't know whether good economic growth gets you reelected. But we do know for sure that if you end up with high inflation, that gets you to big trouble. And even the US, which will speak about the high inflation rates of the last

3 to 4 years are a real problem for the Biden administration. Okay. Ruchir Sharma is going to be staying with us as we turn to his new book, What Went Wrong with Capitalism? That's next on Wall Street Week on Bloomberg. This is Wall Street Week. I'm David Westin. Ruchir Sharma of Rockefeller International stayed with us to talk about his new book, What Went Wrong with Capitalism. First of all, congratulations, Ruchir. Another book out. So let's talk about exactly the thesis of this book, because it is a statement, not a question about what went wrong. So what has gone wrong? How do you know what's gone wrong? When I look at the polling numbers, for example, that on one hand you have like all, you know, all this great data that the American economy is relatively resilient. But if you look at the number of people who are happy in America with the state of the economic union, it is at close to record lows.

According to many polls, there are about seven in ten Americans today who want major change to the economic system, or in the language of the polls, have it completely toned down. You know, that's pretty dramatic. There are only about 35% or so Americans today who feel that they're going to be better off than their parents 50, 60 years ago. About 78% of Americans felt that they would be better off than their parents. So there's a real feeling that something has gone wrong. And I think that it's particularly the fact to do with capitalism that most young Democrats, in particular in America today, say they would rather have socialism than have capitalism. Now, that's such a big statement for this beacon of American capitalism in all that is spoken about of global capitalism. Rather, they are saying that they would rather have socialism, a large cohort of the millennials and the young people, rather than have capitalism. So something has gone wrong.

And what I've done in this book is to sort of look at deep down what's gone wrong, because, as they say, the first step to a cure is to first diagnose the problem. But I feel that in America today, we're not even diagnosing what the underlying problem is. Why does it make sense from your point of view, having studied this now, if if you didn't know anything about our society, if you didn't read any of the media, you didn't read any of the polls, and you looked at our growth rate, which is at or above historical trend lines, and you looked at unemployment, which is close to lows of all time, most indications would say this should be a pretty happy economy. So why is it not? Exactly. Because after I said that, there's a sliver at the top which is doing very well. But we have this two-track economy out here that even now, if you look at it,

you know, the bottom 50 to 60%, they don't have any excess savings. They're not being able to spend that much. And as I said, that there's a feeling that they're being squashed by what's happening at the top, that today in America, economic mobility, social mobility, all of the decline significantly. This is a country where people would move around. A lot of people would be in search of an opportunity. As I said, there's a real feeling in America today that they don't have equality of opportunity. Is it the government's fault in this sense? 28 years ago, we had the great financial crisis. There was concern about a depression, not just a great recession, but a depression. And there was a lot of government intervention both in the monetary side, the fiscal side. A lot of people thought that was necessary to save us and maybe the world from depression. Then you had a pandemic and we brought the economy to a stop.

And again, it was thought
there'd be a lot of stimulus. Was it the government's fault? Didn't they need to come in and have this
level of stimulus and support? Yeah, as I say in the book, that
when we have a crisis, I can understand that the government needs to intervene. I'm not the kind of person
who's in liquidation. Instead, we just let things sort of go
and melt away on its own. What I'm trying to, but have shown in the book, is just
look at the progression of capitalism. Over the last hundred years, we have gone
from this liquidation argument, which caused the Great Depression
and in the 1930s, to now an impulse where you liquefy, liquefy, liquefy, that
the moment you have even the slightest crisis like you had last year
with the ECB or something. The impulses that we got to intervene,
we got to save. And the problem is
that we only have one case point,

which is what we use all the time
to justify intervention. Which is that we think if we don't intervene,
we'll have another Great Depression. That is the argument used all the time. But what's the result today? The result today is the fact that
bankruptcies are close to a record low. We have the number of new start-ups instead, which have been coming up right away under the pandemic. You know, they have been declining. So if you keep so much deadwood alive,
and you keep so many incumbents and entrenched billionaires and
oligopolies alive, you're not allowing new things to really surface. And the middle in particular
is getting squeezed. So the argument of the book
is that you're right, that when we have in a crisis,
you need some government help. But this is not just about crisis. This is about every time
there's a minus letter, you end up
getting government intervention. And it's not just about government
spending, as I said.

Look at the amount of regulations every year, like in America, we introduced 3000 new regulations. How many regulations have you withdrawn over the last 20 years? 20 in total. Right. So we got a regulatory state, a bailout nation that in America in the sixties and seventies and all bailing out a private sector company in America was considered heretical. We had America. We don't do this. Then you begin with the 1984 first big financial institution bailout in terms of continental Illinois. And after that, progressively every time we have a crisis, the bailouts get bigger. And so this, again, sort of, you know, leaves a feeling with people that you really a bailout nation. And if these, you know, rich corporates are getting bailed out, the average person thinks, why am I not getting more out of this? So it's about regulation, it's about bailouts, it's about government

spending, which has gone up from 3% of GDP
a hundred years ago to 36% of GDP today to every administration almost regarding some airport Kitty, out there. The other, we have seen an increase
in government spending. Every administration, including Reagan,
because people tend to think of Ronald Reagan
as being a smaller government philosophy. Yeah,
but the facts just won't be added out because under his administration,
government spending increases slowed down a bit,
but they kept on sort of, you know, carrying on at pretty high levels. And then if you look at in terms
of what happened under him as far as regulations were concerned,
even under Reagan, too, those kept on going up. The only deregulation we saw was the
financial sector, the financial sector. So lots of deregulation. But outside of that,
for the small and medium sized businesses, the regulatory burden
has kept getting bigger. And this has real consequences, David,
because it means that if you're looking

to start a new business,
the cost of doing that today is way higher on Wall Street, where, for example,
if you're looking to start a fund today, it's ten times out in terms of the cost
compared to 20 years ago. So, you know, that just means that
if you're already in business or if you're a big person in business,
you're able to benefit. So capitalism today, in its distorted
form, it's become pro incumbent and it has become big business,
but is in its true form. Capitalism should be broken. Politician and pro-choice in the title of
book is What Went Wrong with Capitalism. I take it as sort of a tenet of capitalism
that growth is usually the way out, that if we grow the entire pie, most problems
will take care of themselves. Doesn't the government's
support facilitate growth? Isn't that the way to get growth? Yeah, but as I said, that that the road to
hell is paved with good intentions.

So, yes, the government's intentions
may be okay, but as they show in the book that where should
the government intervention stop because it's progressively
gotten worse and worse. Right. So which is the
fact that should it stop now? What's the place for the government,
possibly even bigger Europe. Do we want. But America's welfare state is pretty much
catching up with that of Europe. So do we want to go the European way
with even lower productivity at the end of the day? You're right. What leads to higher economic growth? It is higher productivity. That's the single most important thing. And productivity is being undermined
by the fact that you have the creative,
destructive cyber of this economy being destroyed
by repeated government intervention. And, you know, like we spoke about
in the old days, about the invisible hand. It's still appears
to many people as invisible. But what I've tried to do in the book

is to show the progression of this,
that the government's hand is now dead in a way which was unimaginable
even 20, 30 years ago. In the book, you say democracy is not
the problem, capitalism is the problem. But I wonder if you can divorce
the two of them. Really? We have elected representatives. It's going to be awfully easy for them to
give us things in order to get reelected. And doesn't that support more government
support, more government intervention? Logically, yes. But I also make the point. Right, which is that today,
if you look at what's happened to leaders around the world,
including in the United States, approval ratings of leaders in the Western world
and the so-called capitalist
nations is close to a record low. Most incumbents
now are losing their reelection. So clearly, the status quo, the current system
we have is not working for many people.

So, then democracy is also giving you an indicator here, which is that the status quo is not working for us. So we can carry on with the status quo. But then the political leaders should know that people are not happy with status quo, and therefore are willing to support people who are willing to be disruptive, even if the disruption is sort of chaotic. And the risk of them getting reelected has gone down significantly. About, you know, 15-20 years ago, the probability that if you were an incumbent of getting reelected was 70%. Today, the probability of getting reelected if you're an incumbent is, I think, 35%. So that's a dramatic low in terms of what's happened. So the status quo is not what's working for people. And democracy is telling you that that's just not going to be acceptable to many people. The book is What Went Wrong with Capitalism.

And the author is Ruchir Sharma of Rockefeller International. Coming up, the unique partnership of Warren Buffett and Charlie Munger through the eyes of their lawyer for over 50 years. Ron Olson of Munger, Tolles, and Olson. I know no partnerships that have lasted as long as the two of them had. That's next on Wall Street Week on Bloomberg. This is Wall Street Week. I'm David Westin. Warren Buffett or Charlie Munger would have been historic investors individually if they'd never met one another. But they did meet and formed a partnership for over 50 years, one which their lawyer Ron Olson of Munger, Tolles, and Olson observed from close up almost since it began. We talked with Ron about that partnership, what made it work, and what made it different. Neither Warren nor Charlie are typical. Did they have problems that were similar? Yes, but Warren and Charlie had the owner's attitude from day one.

and took a deep, deep interest
in any problem. They. They did their own homework. They didn't believe in consultants. They didn't believe in, you know, figuring out compensation for the managers
with a compensation consult. They operated independent of Wall Street. So they were very different than most other clients, I would say. And the fact that they own the problem. They had each had a deep understanding
of every problem I got into. Maybe the first one was
that was significant was when they acquired the Buffalo
Evening News, and within a few days thereafter, the competitive newspaper
The Courier Express filed an antitrust case
with a rather loud mouth. Plaintiffs attorney
from San Francisco that I knew well and had a lot of fun with. Actually, Fred, for. And so I spent a good part of that winter on that case. And Warren of course, was deeply interested
in it, as was Charlie. They he claimed that the process
that was being used by

really Warren developed to introduce the Buffalo Evening News
as a competitive morning paper, as opposed to an afternoon paper, was monopolization. Judge Bryant in the trial court wrote
a lengthy, lengthy opinion against us and basically made the point
that Berkshire had not complied with the rules of the market. Queensberry and Henry Friendly
and his opinion said, I have searched the antitrust laws up and down
and I couldn't find that rule of the market at Queensberry. But at any rate, Warren
and I got to know each other and of course many others, since I would say
that we were in the trenches the longest in Solomon problem
and thereafter you build a relationship
that always goes beyond the problem. Run. To us about risk, I mean, risk
is at the center of investment decisions and it's also an important part of what a lawyer does is assess risk
and apprise clients of that risk. How does Warren Buffett approach
risk in your experience as his lawyer?

Well, carefully. And he approaches it also often with Charlie. I mean, they would talk regularly,
and particularly if you're talking about risk associated
with an investment, that was a regular occurrence. And each of them approached that,
I think, somewhat differently. They have a different set of priorities, a different set of readings,
different set of life experiences. Warren is, as you know, very gregarious out front, is the one who cuts the deals. Charlie is still sitting in his chair,
as his kids say, he looks like a book with two legs reading every day. You know, the two of them
had this unique partnership. And that's another reason
I don't have a lot of clients with a unique partnership like that. There's complete trust. There was a grounding in, I would say, Midwestern values. Warren had it, and Charlie, too, had both had big developed accounting capabilities. They both read
all the financials, knew him well.

and, but they didn't buy companies without an established record of consistent profits for five years or more, a leadership that they trusted with that were that had integrity, and had run the companies that they were about to acquire. And one question Warren always asked was, is this person going to love the money more than he loves the business? Because Berkshire is about to make him very rich, and if they did, it wasn't a deal. So if he have, say, love the business more, that's who we want. So it was a combination of risk assessment. But as I say, I think Charlie added a perspective that and he was guided. He he read every great psychologist and knew all the biases that exist in judgment. And the MATTHEWS Asimov deal was more evident than Warren. But confirmation bias was something Charlie guarded against in everything he did. And those are some of the thoughts. Having watched this partnership for over 50 years, as you say,

from a pretty close distance, actually. What caused it to sustain? To be clear. Charlie joined the board in 1975,
but the partnership of the two of them in informal and then later very much a part of of Berkshire Hathaway existed. Yes. So that that partnership what sustained it,
because we have seen other partnerships that are based on mutual trust
and different contributions of the two partners, and that have been close partnerships,
but they don't tend to last for over 50 years. Well, there are, I would say, a couple of things. I mentioned the common background. They both had acres
that are off the chart. They both respected that. They both had memories that exceeded mine, and they respected that. They both were interested in building a company that would have permanence,
and committed themselves to it, particularly
when Warren went along with Charlie. Finally, and moved from buying what were referred to as CIGARET companies
with a few puffs left at a cheap price.

And Charlie convinced them
that it's far better for permanence to buy wonderful company. Is that a fair price and fair company? Is that a wonderful price? And they were dedicated to that. They were. And as Warren said in his tribute to Charlie in the annual letter,
he let him take the boughs. And he also noted in the letter that he, after he had blundered,
and made a mistake on something, Charlie never reminded him of it, and that Charlie was torn. Very much like the combination
of a brother and a father. You talk about permanence and the fact that Warren and Charlie
wanted something that was permanent. Unfortunately, in human institutions,
nothing's permanent. We've lost Charlie Munger, sadly. Warren has no inclination, it appears,
of going anywhere at the same time. There will come a time
when he's no longer with us. Have they succeeded,
you think, in setting up something that can be permanent,
that can outlast even Warren Buffett?

That's not only the idea, but I am confident that's what has been built by the two of them. And the board understands that it's ongoing obligation post Warren. And let's not get ahead of ourselves. He's not going anywhere soon. I had a wonderful conversation with him yesterday morning. And, you know, the enthusiasm, the thinking is still there, just like it always was. But I would say that the board has done a very good job in helping to maintain the post. Warren permanence by by having Greg Abel as a designated successor. Gregg is admired by the board. He's admired by Warren. He understands the history of the company and the idea of permanence. He is a fabulous thinker. His judgment is superb. He is strategic, he is decisive, and Warren is working with him regularly these days on all the companies. And I think we're in terms of protecting the culture, making sure that Gregg is the successor.

If anything happens, Dawn board is off to a good start,
but every board member understands the most important thing
we can do to sustain this company is not let that culture slip away. That was Ron
Olson of Munger, Tolles, and Olson. Coming up, if it first you don't succeed, maybe just turn around. That's next on Wall Street Week on Bloomberg. Finally, one more thought. George Bernard Shaw advised that those who cannot change
their minds cannot change anything. Our leaders
typically tend to want to change things without changing their minds, or at least
admitting they're changing them, epitomized in the immortal words
of Prime Minister Margaret Thatcher. To those waiting with bated breath
for that favorite media catchphrase, the U-turn. I have only one thing to say. U-turn if you want to. The ladies. Not for turning, but there are exceptions. As when? Then Secretary of State Hillary
Clinton announced that the United States

would make a pivot away from Europe and
toward Asia in its policy going forward. We have reached a pivot point. We now can redirect
some of those investments to opportunities and obligations
elsewhere. And Asia stands out as a region
where opportunities abound. This week,
we've had any number of leaders, political and business,
very publicly, change their direction, starting the Prime Minister, Rishi Sunak,
who thought better of his decision to cut short his time
at the D-Day commemoration and hurry back to campaign,
admitting he'd made a bad mistake. Israeli opposition leader Benny Gantz
changed his mind about participating in a wartime cabinet and said that
Prime Minister Netanyahu is now, quote, preventing us
from advancing to real victory. What is the actual plan? And that's not clear yet. And that frustration
is what led Benny Gantz to decide we can't do this anymore
and take his party out. A lot of European voters
apparently changed their minds

about where the European Parliament should be headed, as they flocked
to more conservative opposition parties. This right-wing surge
did actually take place in the two most important countries in Europe,
but not across the entire continent, which caused French President Macron
to shake things up by calling a snap election
of his own parliament. Above all, I hope that on June
30th and July seven, the French will elect as many MEPs as possible
from the presidential majority. But perhaps the biggest about-face
we saw this week came from Shari Redstone, who had been flirting for months with a big deal that would merge Paramount
into David Ellison's Skydance. Just as Global Wall Street was
getting ready for the big announcement, just as a special committee of her board
was getting ready to approve the transaction, Ms. Redstone apparently changed her mind
and decided she wanted to stay in the entertainment business
her father had founded. After all, at least for now,
there's a 50% chance that nothing happens.

that in the end, Cherie says,
This is too much. I will just keep the company. This is not the first time
Paramount has needed to turn things around as its own miniseries. The offer on Paramount Plus recently explained
it was in bad shape in the early 1970s. Now all Shari
Redstone needs is a godfather. Paramount is going to come crashing down. We need it. You're right. The Godfather and the Godfather. Sure. Whoever that does it
for this episode of Wall Street Week. I'm David West
and this is Bloomberg. See you next week.

Wall Street Week 06/14/2024

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유럽의 정치적 변화와 잠재적 경제적 영향

유럽은 기성 정당들 사이에서 잡음이 들리는 정치적 변화를 경험하고 있습니다.

래리 서머스는 특히 인플레이션과 관세와 관련된 트럼프 정책의 잠재적 경제적 영향에 대해 우려를 표명합니다.

서머스는 소득세를 관세로 대체하는 방안에 대해 강력히 비판하며 미국 경제에 심각한 피해를 입히고 "모든 스태그플레이션의 어머니"를 초래할 수 있다고 경고합니다.

우크라이나에 대한 러시아 자산 동결의 중요성

약 3,000억 달러로 추정되는 상당량의 동결된 러시아 자산이 우크라이나에 제공될 것으로 예상됩니다.

이자 지급과 대출 메커니즘에 대한 접근은 우크라이나에 수년에 걸쳐 500억 달러 이상을 제공할 수 있습니다.

이러한 재정적 지원은 우크라이나에 매우 중요하며, 국가 예산이 중요한 국제 지출로 전용되는 것을 방지할 수 있습니다.

이탈리아의 지도자는 지속 불가능한 부채와 긴축 정책으로 인한 잠재적 인기 하락으로 어려움에 직면해 있습니다.

마린 르펜의 경제 정책은 투자자들의 우려를 불러일으키고 있으며, 케이르 스타머의 노동당은 영국 경제에 안정을 가져올 것으로 기대됩니다.

유럽 내 외국인 직접 투자는 미국과의 경쟁에서 어려움을 겪고 있지만, 영국은 안정적인 기후와 낮은 세금으로 투자 잠재력을 보여주고 있습니다.

인도 선거로 인해 정부 지출 우선순위가 농촌 경제로 바뀌었습니다.

이번 선거 결과로 야당은 대담해지고 여당은 도덕적 패배를 당한 것으로 보이는 독특한 상황이 연출되었습니다.

이번 선거에서 빈곤층과 소위 '후진 카스트'가 야당에 투표하는 등 사회경제적 격차가 뚜렷하게 드러나면서 내년에는 최소한의 정책적 조치만 있을 것으로 예상됩니다.

미국 경제 시스템에 대한 현재 정서

미국인의 약 70%가 경제 시스템의 영향력을 크게 변화시키거나 축소해야 한다고 주장하는 반면, 35%만이 부모 세대보다 더 잘 살게 될 것이라고 믿고 있습니다.

특히 젊은 민주당원들 사이에서 자본주의보다 사회주의에 대한 선호도가 높아지고 있습니다.

정부의 개입과 구제금융의 증가와 함께 경제적 이동성과 기회가 흔들리고 있다는 인식이 확산되면서 뒤처졌다는 느낌이 널리 퍼지고 있습니다.

정부 개입이 자본주의에 미치는 영향

레이건 정부를 포함해 여러 행정부에 걸쳐 정부 지출이 지속적으로 증가하면서 중소기업의 규제 부담이 커졌습니다.

새로운 사업을 시작하는 데 드는 비용이 크게 상승하여 대기업에 유리한 왜곡된 형태의 자본주의가 형성되었습니다.

현 제도는 낮은 지지율과 현직 의원의 재선 확률이 급격히 감소하는 등 많은 국민에게 효과가 없다는 것을 보여주고 있습니다.

워런 버핏과 찰리 멍거의 영원한 파트너십

워런 버핏과 찰리 멍거는 공통의 배경, 깊은 존경심, 영속적인 회사를 만들겠다는 의지를 바탕으로 독특하고 지속적인 파트너십을 맺었습니다.

버핏은 사교적이고 거래에 집중하는 반면 멍거는 신중하고 편견을 경계하는 등 위험에 대한 접근 방식이 달랐습니다.

두 사람의 파트너십은 영속성을 갖춘 회사를 만들기 위한 헌신과 서로에 대한 상호 존중과 신뢰가 있었기에 유지될 수 있었습니다.

찰리 멍거의 사망과 같은 불가피한 변화에도 불구하고 버핏과 멍거의 유산과 그들이 구축한 회사는 워런 버핏보다도 더 오래 지속될 수 있는 위치에 있습니다.

워렌 버핏의 승계 계획과 변화하는 비즈니스 의사 결정

워렌 버핏의 후계자로 지명된 그렉 아벨은 전략적 사고와 판단력으로 존경받는 인물입니다.

샤리 레드스톤과 리시 수낙을 비롯한 비즈니스 리더들이 결정과 계획에 큰 변화를 가져왔습니다.

이번 주에는 정치 지도자부터 비즈니스 경영진에 이르기까지 저명한 인사들이 공개적으로 방향을 바꾸고 결정에 있어 변화를 꾀하는 모습을 보였습니다.