Thursday, January 12, 2012

Mr. Phony Baloney

     Last year Warren Buffet once again made a fool of himself by opening his mouth about tax policy. The billionaire investor said that rich guys like him should be paying more in taxes to the Federal government. Some Republican members of Congress pointed out the obvious to Mr. Buffet, that nothing was stopping him or anyone else from voluntarily sending more money than they owe to the treasury. This week Mr. Buffett doubled-downed on his stupidity by saying he would voluntarily send one dollar to the treasury for every dollar that any Republican member of Congress contributed. This is big talk coming from a man who at present has a team of tax attorneys and accountants working feverishly to relieve him of a one billion dollar tax bill that he owes.
     This kind of hypocrisy is not surprising coming from a man who recently allowed his second in command to take the fall for a mistake that he made. David Sokol had purchased stock in a company called Lubrizol and subsequently recommended the company as a possible Burkshire Hathoway acquisition. In the interest of full disclosure, he informed Mr. Buffett that he owned stock in the company. After the purchase of Lubrizol it came out that Mr. Sokol owned stock in the company and profitted off the sale. Mr. Buffett claimed no knowledge of the previous stock ownership and Mr. Sokol was summarily dismissed and faced legal ramifications.
     Mr. Buffett has had more than a cozy relationship with the Obama administration and has profited from it more than once. The first time was early in 2009 when GE stock, along with every other stock, was a fraction of it's previous price. Mr. Buffett must have been made aware by the administration that GE was set to receive TARP money and he made one of the largest investment he had ever made up to that point. This is the kind of insider trading that most of us would go to prison for if we weren't buddies with the President. But in the current administration, this kind of cronyism is the order of the day.
     Another unsavory deal that saw Mr. Buffett profit from his relationship with the President, is his investment in Bank of America. Part of that deal gives Mr. Buffett a 3 million dollar dividend every quarter. This hardly seems fair when BofA has been prevented by the administration from paying dividends to holders of common shares of stock.
     I use to have respect for Warren Buffett, even knowing that he leaned toward the left. I respected his investment savvy and admired what he had accomplished. But in the last 3 years he has lost my respect by joining the President's class warfare machine. By hitching his wagon to the President's team, Mr. Buffett has unwittingly advocated for the kinds of policies that would ensure that others could not have the same success he has had in this country. All that matters to Warren Buffett is that he's got his billions and to hell with anyone coming up behind him who wishes to achieve the same kind of success.

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