The Obama administration has announced that it is eliminating the former restrictions on foreign exploration and drilling of domestic oil reserves. This means that a higher percentage of United States oil reserves will be extracted from the ground for foreign interests. It also means that the price of oil will increase substantially. Additionally, these foreign interests will not be refining their oil using U.S. refineries, but their own. And this is where billionaire investor Warren Buffett comes in.
In the previous months, Mr. Buffett has been dumping his shares in domestic refinery companies, having been tipped off to this new Obama policy before it became general knowledge. For those paying attention, this is not the first time Mr. Buffett has benefitted from his cozy relationship with Barack Obama.
There were the shares of General Electric he bought in early 2009 just before it was announced by the administration that GE would receive billions of dollars in TARP money. And who could forget Warren's purchase of Bank of America stock, which he was allowed by the Obama White House to receive dividends on while at the same time they forbade BofA from paying dividends to common shareholders. Finally, there is the Omaha environmental group that Mr. Buffet funds which has been instrumental in keeping the Keystone Pipeline Project from coming to fruition so as not to upset the profit that Berkshire Hathaway makes from transporting oil on their rail cars.
In the 1950s, when Warren Buffett first founded his company, Berkshire Hathaway, he used his skill and cunning as an analyst of economics and business financials to make money. In recent years, especially since Barack Obama became president, Mr. Buffett has used less stock picking skill and more political connections with which to make money for his shareholders. He is the ultimate crony capitalist, and the richer and more influential he becomes, the more crony and the less skillful analyst he becomes.
It was not always the perfect marriage between Warren Buffett and Barack Obama. In the beginning of the latters administration, Mr. Buffett was critical of the president's policies, which he saw as destroying the economy. But it seemed with each billion in profits Warren made as a result of being fed valuable information from the administration, the less concern he had for his country, and the more he turned a blind eye to Barack Obama's anti-capitalist agenda. Which is the antithesis of the free market principles that built Berkshire Hathaway.
Mr. Buffett is the poster child for the crony capitalism that has destroyed the sanctity of self government and has given free markets a black eye, even though his behavior has no place in them. For now there seems to be no concern, let alone action to stop, Mr. Buffett's ultimate insider trading. It is the typical thing that happens in corrupt banana republics, which the United States of America is racing down the road to become.