A world famous investor, many would say the most successful, has joined the chorus advocating the theme of this website, “rethinking”. In this case he refers to rethinking the global economic crisis. Warren Buffett, Chairman and CEO of Berkshire Hathaway, Inc. wrote to his investors “I made some errors of omission. When new facts came in, that should have caused me to reexamine my thinking and promptly take action.” He is referring to a 62 percent decline in his company’s profits.
In an article in the Christian Science Journal contributing editor Colleen Douglass credited Buffett’s honesty with being a refreshing alternative to the “blame game,” where everyone accuses someone else of being responsible for the financial challenges the world economies are facing.
Douglass notes that deep divisions exist between different economic theories, the Keynseian approach with government helping balance supply and demand, and the supply-side economists calling for tax cuts.
In a fit of frustration, Business Week Magazine headlined a cover story “what good are economists anyway.” Economists seem to have one thing in common, they are usually wrong.
In his book Rethinking the Corporation, Forler Massnick quotes William A. Sherden who wrote:
“The theories of chaos and complexity are revealing the future as fundamentally unpredictable. There are no clear historical patterns that carve well-marked trails into the future. History does not repeat itself. The future remains mostly unknowable.”
Buffett’s comment merits consideration. Reexamine your thinking and promptly take action.