Should We Be Thanking Uncle Sam?
Warren Buffett: grateful citizen or crony capitalist?
In a pandering op-ed published in today's New York Times, Buffett basically massages the feet of his buddies in government for everyone to see. In the form of an open-letter, he thanks Uncle Sam for bailing out Wall Street and Big Business, thus saving the entire economy from disaster.
When the crisis struck, I felt you would understand the role you had to play. But you’ve never been known for speed, and in a meltdown minutes matter...Well, Uncle Sam, you delivered... Just as there is a fog of war, there is a fog of panic — and, overall, your actions were remarkably effective.
...I would like to commend a few of your troops. In the darkest of days, Ben Bernanke, Hank Paulson, Tim Geithner and Sheila Bair grasped the gravity of the situation and acted with courage and dispatch. And though I never voted for George W. Bush, I give him great credit for leading, even as Congress postured and squabbled.
Former New York Sun managing editor Ira Stoll, writing at his blog FutureOfCapitalism.com, offers his two cents on Buffett's letter:
The bottom of the article says, "Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company."
He could have signed it instead, "Warren Buffett, the largest crony capitalist in the world, shareholder of GE, Goldman Sachs, Wells Fargo, US Bancorp, M&T Bank, and American Express, as well as competitor of private equity and hedge fund firms that have been threatened with new taxes and regulations, and behind the scenes, insider adviser to most of the government officials mentioned above."
Also noteworthy: Buffett dropped this line on Squawkbox this morning: "If the government hadn't acted, I would be eating Thanksgiving dinner at McDonald's."
What do you make of Buffett's big wet kiss? This isn't the first time that Buffett has stepped in as the American government's unofficial propagandist.
- Comment (22)
- · Quote
- · UnfollowFollow (3)
- Pages:
- 1
- 2
- Pages:
- 1
- 2
Comments :
Jul '10
Re: Should We Be Thanking Uncle Sam?
Is there something wrong with McDonald's? Perhaps he has a short on them.
I prefer the term corporatist, because capitalism has little to do with the likes of folks like these.
Sep '10
Re: Should We Be Thanking Uncle Sam?
George Soros and Warren Buffett make a lovely couple. I believe Buffett and Bill Gates share the same views on sterilizing and contracepting the third world as their way of helping out the little people.
Goldman Sachs? Ever since that video the other day referring to The Goldman Sachs and The Ben Bernank(e), I can't hear the name Goldman Sachs without reaching defensively for my wallet in my back pocket.
Re: Should We Be Thanking Uncle Sam?
Have you read Tim Carney's book The Big Ripoff about the alliance between Big Government and Big Business? You might enjoy it!
Edited on Nov 17, 2010 at 7:07amMay '10
Re: Should We Be Thanking Uncle Sam?
I admire Warren Buffett's business acumen without reservation - especially his patience and perspective. Ira Stoll's signature description, however, has a ring of truth to it although I generally consider Buffett to be a benign influence in political and government circles. Sure, he's a legendary businessman but I think he is incredibly naive politically (just listen to him talk about his taxes versus his secretary's taxes). When he goes on like this I usually don't bother to listen; his annual letter to shareholders, though, are well worth a read. I'd like to hear what Trace Urdan has to say.
One last thing - considering what I've read about Buffett's dietary habits, he will probably be eating Thanksgiving dinner at McDonald's regardless.
Edited on Nov 17, 2010 at 7:07amAug '10
Re: Should We Be Thanking Uncle Sam?
Warren Buffett is the most overrated and shallow "financial guru" America has ever produced. He started out well, and with practical ability and discipline salvaged badly run companies and turned them around to profitability. He was smart enough to hire very savvy people to run things for him after that. His company, Berkshire Hathaway, made some epic blunders over the years that you'll never read about in the Regime Media.
Buffett's now just a figurehead for an amoral empire, a money machine. If Soylent Green were legal Berkshire would be a major player in it.
http://www.imdb.com/title/tt0070723/plotsummary
Buffett is a more happy-go-lucky George Soros. 'Crony capitalist' isn't a strong enough word; 'cynically expedient narcissist profiteer' is better.
May '10
Re: Should We Be Thanking Uncle Sam?
Not sure I'm a legit stand-in for the entire professional investing class but I'll take the bait Matthew thanks.
I've never been a huge fan. There is no arguing with his success, it speaks for itself. And his common sense approach to investing is admirable in a landscape full of fast turns and tricks. But he moralizes in a way that rubs me the wrong way.
Furthermore he uses his influence as a shield against outside influence which I also believe to be unhealthy. His companies, not coincidentally, lack transparency, engage in practices that discourage any sort of investor activism and operate with a regal attitude that bugs me.
The Washington Post Company is an excellent example. He has long backed the Graham family, acting as their white knight and allowed them to avoid any pressure to adapt effectively to the new media world. Their investment in education has been opportune, but threatened lately by new proposed government oversight.
Hence the sucking up to the administration.
May '10
Re: Should We Be Thanking Uncle Sam?
Brilliant.
May '10
Re: Should We Be Thanking Uncle Sam?
That sounds like a pretty successfuly business to me. Nobody bats 1.000. You're right - there was GEICO but there was also General Re; there was American Express but there was also USAir; and so on. But what is a share of BRKA going for these days?
If he's overrated and shallow, whence the "money machine"?
And so he must resort to insurance, newspapers, candy, investment banks, manufactured housing, ice cream, and cowboy boots?
Look, we both have the same problem with Buffett - his troubling politics. Hammering his business is not the fight you want to pick.
Oct '10
Re: Should We Be Thanking Uncle Sam?
Emily Esfahani Smith, Ed.
Have you read Tim Carney's book The Big Ripoff about the alliance between Big Government and Big Business? You might enjoy it! · Nov 17 at 7:04am
Edited on Nov 17 at 07:07 am
This is not a new alliance. It is the essence of mercantilism, a system whereby corporations are assisted in their development through regulation and taxation mechanisms of government. It has formed the basis of colonialsim and empire throughout history, and invevitably results in domestic corruption and war.
It is interesting to note that Buffet recently invested heavily in railroads, one of the primary beneficiaries of mercantilism in the 19th century. It seems Mr Buffet has officially joined the ranks of the "robber barons".
Edited on Nov 17, 2010 at 8:08amMay '10
Re: Should We Be Thanking Uncle Sam?
Trace, I'm well over my pay grade trading comments with you on this topic, but here goes. Is the best way to evaluate Buffett's investment in and involvement with the Post solely in terms of where the Post is now versus where it was when Buffett bought in? Or is it better to evaluate the investment in terms of how Berkshire used the cash it took in over the decades thanks to the Post's dividends?
May '10
Re: Should We Be Thanking Uncle Sam?
Matthew -- These are all examples of the "old' Buffet (which River credits) where he acquired distressed but quality assets and turned them around. That does not describe very well what he does today. Part of the problem for Buffet is that he simply has too much money. His capital base is too large to deliver returns turning around candy companies. So now he has to own American Express and engage in the issues that matter to that asset. And what you then find is that getting cozy with the government, is the most important way to protect and grow that asset.
I'm being simplistic of course, but that is how he has grown into the crony capitalist role from his earlier days of ferreting out great investment vehicles.
Re: Should We Be Thanking Uncle Sam?
Alright, so far we have one vote for "crony corporatist" (hi Michael!) and another for "cynically expedient narcissist profiteer."
Any others?
May '10
Re: Should We Be Thanking Uncle Sam?
Matthew Gilley
Is the best way to evaluate Buffett's investment in and involvement with the Post solely in terms of where the Post is now versus where it was when Buffett bought in? Or is it better to evaluate the investment in terms of how Berkshire used the cash it took in over the decades thanks to the Post's dividends? · Nov 17 at 8:08am
Excellent point Matthew, you're right of course, which is why Berkshire investors have done so well. But my point above still holds. He is smart and self-interested and so today that means working the government as best he can -- even if it means using his reputation and standing to influence elections. Like I said, there is no arguing with his success. But it is also true that when he dispenses political advice to the masses, he does so from a position of intense self-interest.
Sep '10
Re: Should We Be Thanking Uncle Sam?
Emily Esfahani Smith, Ed.
Alright, so far we have one vote for "crony corporatist" (hi Michael!) and another for "cynically expedient narcissist profiteer."
Any others? · Nov 17 at 8:11am
The 2 old muppets that used to heckle the performers from the balcony - Statler and Waldorf. I can't make up my mind which one of them is more like Buffet, but now that Bert has become some type of androgynous sock muppet for PC pieties, I think Soros and Buffett would make nice new Statler and Waldorf hecklers.
May '10
Re: Should We Be Thanking Uncle Sam?
Agreed. To extend on your comment, I also think "that when he dispenses political advice to the masses, he does so" very poorly.
Jun '10
Re: Should We Be Thanking Uncle Sam?
"[I]ntense self-interest", what a nice way to describe poisoning democracy. Would it be too much to ask that creeps such as Warren Buffett just shut their pie holes, at least we could then pretend that some of us aren't more equal than others. And nothing of late gives me the pip as much as this "Wall Street" rescue. These guys justify their huge profits by claiming they take huge risks, oh, wait a minute, these risks are underwritten by the government. Here's an idea whose time has come: let's tax away their huge profits? Since government has underwritten their risk there is no reason to allow any of them huge profits.
Oct '10
Re: Should We Be Thanking Uncle Sam?
A perfect illustration of the "evils" of mercantilism. Self interest is a given. Monied self interest, when harnessed to the engines of government, is a great threat to liberty.
Edited on Nov 17, 2010 at 9:10amAug '10
Re: Should We Be Thanking Uncle Sam?
Trace Urdan
These are examples of the "old' Buffet (which River credits) where he acquired distressed... assets and turned them around. That does not describe... what he does today. Part of the problem... is that he simply has too much money. His capital base is too large to deliver returns turning around candy companies. So now he has to own American Express and engage in the issues that matter to that asset. And what you then find is that getting cozy with the government, is the... way to protect and grow that asset....that is how he has grown into the crony capitalist role...
Very well said, Trace. One of America's glaring weaknesses - IMHO - is that successful people are almost automatically regarded as prophets and paragons of virtue if they choose to act the part; unless they're caught with a bloody knife in hand. I cringe when I hear Buffett - or Trump - pontificating on our national morality.
Jefferson, Jackson, and Twain railed against this with little success.
In Britain you can't be too smart, but can be too rich. They're right.
Oct '10
Re: Should We Be Thanking Uncle Sam?
One of Buffett's big businesses advises people on how to avoid or mitigate the death tax. That business would not exist if the death tax wasn't in effect, and Buffett publicly supports that tax while staying mum on the financial benefit he reaps from it. See http://www.humanevents.com/article.php?id=38595 for details.
That, plus the given examples of bailed-out businesses where his wealth is invested, leads me to agree with the term "crony corporatist".
Meanwhile, his "wealthy people and businesses should be happy to pay more in taxes" attitude, combined with tax disputes raised by his businesses (i.e., the IRS says "you owe this", while the company says "no we don't"), leads me to also apply the term "hypocrite".
Oct '10
Re: Should We Be Thanking Uncle Sam?
Put me down for "oligarch", Emily, but "crony corporatist" works just as well. It's not really news to me that a senior member of the corrupt big business class is publicly grateful that the corrupt political class helped keep the corrupt system going. This is how you'd expect an oligarchy to work in an era 21st century mass communications.
One of my frustrations from the recent financial debacle is that very little attention was paid to the complete failure of the corporate governance system to ride heard over senior executive management. I should be considered a flagrant conflict of interest to have a CEO also be the chairman of the board that is supposed to be providing oversight to senior executive management, but it's common.
John Bogle is right. We're not an investor society. We're an agency society and our agents don't care about their fiduciary responsibilities.