Warren Buffett had a near-death experience two years ago. The so-called Sage of Omaha was stricken with dizziness and severe chest pains -- brought on, in his words, by a metabolic disturbance of such "destructive force" as to be "unlike any seen for generations." Writing in the cutesy style for which he is famous, Buffett describes his brush with death in a "letter" printed in the op-ed page of the New York Times (16 Nov 2010). He credits a favorite uncle -- name of Sam -- with being willing to "stretch legal boundaries" and take other heroic actions that were needed to save him and, as it happens, the rest of the country.
"Dear Uncle Sam," he smarmily begins. "My mother told me to send thank-you notes promptly. I've been remiss." Coming to the end of this missive, he signs off as "Your grateful nephew, Warren."
Not too long ago -- in the run-up to the November 2 elections -- President Barack Obama was out giving speeches claiming credit for saving the country from a fate worse than the 1930s Depression. Though Buffett doesn't specifically mention Obama by name in his letter (and, in fact, gives some credit to George W. Bush's actions in the waning days of his presidency), he lavishes praise on key members of Obama's team and he repeats the well-worn Obamanomic argument that we ought to be glad that unemployment is "only" about 10% -- rather than 15, 20 or 25%.
In other words, we should be glad for the "new normal" of what seems to be a permanently enfeebled economy. In the world according Buffett, who is widely supposed to be wiser than Solomon as well as richer than Croesus, the nation was saved from financial and economic ruin by the wizardry of Tim Geithner, Ben Bernanke and Hank Paulson … and their bosses in the White House. Weren't these some of the same people who created the crisis? And isn't the banking system still clogged with toxic assets? Never mind. This is just one man's opinion. Buffett offers it up like a school boy bringing a well-polished apple to the teacher:
Just over two years ago, in September 2008, our country faced an economic meltdown. Fannie Mae and Freddie Mac, the pillars that supported our mortgage system, had been forced into conservatorship. Several of our largest commercial banks were teetering. One of Wall Street's giant investment banks had gone bankrupt, and the remaining three were poised to follow. A.I.G., the world's most famous insurer, was at death's door.
… All of corporate America's dominoes were lined up, ready to topple at lightning speed. My own company, Berkshire Hathaway, might have been the last to fall, but that distinction provided little solace.
That last little bit of humor is pure Warren, if I may say so -- managing to be both self-deprecating and self-glorifying. One can picture him reprising the part of General George Custer -- heroically cast as the last capitalist to fall in the collapse of the American economy.
But here we have a replay of Little Bighorn with a feel-good ending. Unlike Custer, Buffett escapes with his scalp because the government "grasped the gravity of the situation and acted with courage and dispatch."
"Well, Uncle Sam, you delivered," says Buffett in penning his appreciation for the bail-out of the banking system. "People will second-guess your specific decisions; you can always count on that. But just as there is a fog of war, there is a fog of panic -- and, overall, your actions were remarkably effective."
Yeah, it's hard for most of us poor mortals to think clearly when we are lost in the "fog of panic." Come to think of it, that's the exact same point that Obama was making just days before the Nov. 2 election. He said: "Part of the reason that our politics seems to be so tough right now, and facts and science and argument does [sic] not seem to be winning the day all the time, is because we're hard-wired not to always think clearly when we're scared. And the country is scared, and they [sic] have good reason to be."
The American people, if you catch the drift, are out-and-out wrong if they think they were rejecting the president's policies when they went to the polls on Nov. 2. No, they were just confused and scared -- or temporarily insane. Instead of "second-guessing" Uncle Sam, or Team Obama, they should be listening to "facts and science" and thinking about all those imaginary jobs that have been "created or saved." If Buffett is right and you still have job, you can thank your lucky stars for government intervention.
Of course, Buffett is one of the sages from the business world who endorsed Barack Obama back when he was running for president. Further, in line with his elitist and interventionist impulses, he is also one of the sages from the business world who supports the president in calling for higher taxes on the "rich" -- which is ridiculously defined to include people with barely enough income (starting at $200,000) to support even a single child in college at the going cost of most private and many state universities (around fifty thousand dollars a year).
Buffett is not the only billionaire begging for more taxes. There are plenty of others in Silicon Valley and in Hollywood and on Wall Street -- people who have made their fortunes and who jet about the world in private aircraft while worrying about reducing mankind's carbon footprint.
Bill Gates, who happens to be Buffett's best friend, is one of the super-rich who yearn for higher taxes. His father spearheaded the 1098 Initiative which was on the ballot in Washington State on Nov. 2. Washington is one of just seven states without a personal income tax. With heavy support from the teachers union and the Service Employees International Union, 1098 would have enacted a state income tax on top earners to raise money for schools.
Business owners and executives -- including Microsoft CEO Steve Ballmer -- fought back against the job-killing measure. Voters rejected the initiative by a thumping 65-to-35 margin.
Are Buffett and Gates so stupid -- or so insulated from the economic reality that confronts the rest of us who must work for a living -- that they cannot grasp the fundamental idea, expressed by Oliver Wendell Holmes, that "The power to tax is the power to destroy?"
But who says there is no justice -- no "social justice," that is -- in this world?
On the same day that Buffett's "letter" appeared in the New York Times, the White House announced that Buffett will be awarded the Presidential Medal of Freedom, America's highest civilian award.
Excuse me for a quick departure. I feel a little sick.
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