Readers of this column will note that I’ve been following the joyous bromance of our economically illiterate president and the wily investor, Warren Buffett. I compared their meeting to that of seal and shark, but now it seems more like Little Red Ridinghood and the Wolf. While Barry admires Warren’s big eyes, Buffett eats him for lunch.
Writing on August 17, I noted that, “Since 2008 Warren Buffet has been busily buying up the resources and infrastructure to make a killing in coal.” I suggested that Buffett’s recent NYT letter and other statements urging tax increases on the rich might be efforts to ingratiate himself with Obama, and if Buffett’s efforts swayed public opinion, “wouldn’t Barry owe Warren a quid pro quo?”
As it played out, Buffett’s shilling for higher taxes swayed no one, largely because it was a dodge, but also because it came to light that Buffett’s Berkshire-Hathaway doesn’t even pay the taxes it owes under the current system. According to a report from Newsmax, Berkshire is “mired in a protracted legal battle with the Internal Revenue Service over a bill that one analyst estimates may total $1 billion.”
Now Barry doesn’t much care whether is buddies pay their taxes, as long as they’re big on having “the rich” pay more of theirs. (Rachel Alexander has a comprehensive early list of Obama appointee tax cheats here.) But outside the circle of corruption we call Chicago on the Chesapeake, such hypocrisy doesn’t play well.
So, Warren wasn’t going to get any play from his tax ploy. Fast forward to Barry’s Martha’s Vineyard getaway, which coincided with Warren plunking down a cool $5 billion on the teetering Bank of America. No doubt that stabilized a sector of the economy Barry is flailing to revive. On August 27th, I cited William Alden’s HuffPo article, which stated: “The [B of A] investment had many drawing comparisons to September 2008, when Buffett invested $5 billion in Goldman Sachs during the height of the financial crisis and secured a lucrative deal for his company. That was right before the government passed a bailout package known as the Troubled Asset Relief Program, rescuing a range of financial firms and confirming the wisdom of Buffett’s bet.”
Considering what a questionable investment B of A is, I asked, “Is it possible that Warren got another verbal guarantee … he could count on the president to deliver relief?”
B of A continues to limp along, but it may be that Warren Buffett got his presidential favor on a separate issue. When President Obama overrode his EPA last week, putting new ozone regulations on hold, one industry was a big winner. It was an industry candidate Obama had vowed to destroy, but in which his buddy Warren is heavily invested: coal.
Back on January 17th, 2008, Barack Obama stated that under his ideal system of Cap and Trade, “If someone wants to build a coal-fired plant they can. It’s just that it will bankrupt them, because they’re going to be charged a huge sum for all the greenhouse gas that’s being emitted.”
Warren Buffett was heavily invested in coal at the time, having gone heavily into a stock called Constellation Energy Group. Then on May 19th, 2008, Buffett shifted his allegiance from Hillary Clinton to Barack Obama because it seemed he would win the Democratic nomination. Buffett stated succinctly, “I will be very happy if he is elected President. He is my choice.” The fact that the junior Senator had dazzled the Oracle of Omaha further inflated the myth of Obama’s brilliance. It convinced some that despite having not ever run so much as a lemonade stand, Obama was a once in a millennium intellect who could easily square the US economy. Why else would a self-interested capitalist like Buffett support him?
Well, it’s amusing that Buffett never said Obama would make a good or great president, just that he was going to be president. Maybe Buffett recognized that because Obama knew so little, he would be malleable. And like any devout, central-planning socialist, he would tinker with the economy, manipulate industries and attempt to influence winners and losers. Buffett knew that an endorsement would give him an inside track, easy access to insider information. It would be simple for the Oracle to predict which stocks would climb, once he knew where the heavy foot of government was going to tread. So Warren wormed his way into Obama’s inner circle. And suddenly Barry’s not so hot to control ozone emissions from coal-fired plants.
In fact, Obama has acted to protect Buffett’s financial interests. I’m not going to get all “Sierra Club” hissy about this, because in doing so, Obama has, for once, acted in the financial interest of the United States. Obama’s decision to put off the job-killing EPA regs will benefit the US economy.
But voters should understand, this is not the case of a Leftist tacking center, conceding that his anti-business policies are flawed and are causing widespread pain throughout the nation. It’s also no accident, as in a blind squirrel finding a nut. It is a deliberate attempt to deliver a monetary favor for a political ally, while at the same time removing an issue from the next election cycle. The EPA regs are on hold until 2013, when a (good G-d in heaven, help us!) newly re-elected President Obama could wave his scepter and re-instate them. (Look for plenty of doublespeak from Obama about his intentions during the campaign, depending upon the audience.)
Now, as much as I detest crony capitalism and corrupt political patronage, I’m happy that Warren and Barry are so kissy-kissy. On balance, I’d say Warren’s a better influence than Paul Krugman, let alone Saul Alinsky, William Ayres, Bernadine Dohrn, Frank Marshall Davis, Jeremiah Wright, Van Jones, Alice Palmer or any of the other Communists in Barry’s inner circle. Why, Buffett might even have an influence on Barry’s Super-duper, so-brilliant-it had-to-wait-for-his-vacation-to-end Job-a-palooza Speech Thursday night. Now that would be a fine romance. But the shame of it all is that no matter how much Barry falls for Warren, the lovebirds will never really get together. Barry will never get a divorce. You and I may wonder what a brilliant, young Harvard grad could ever see in that loser, but Karl Marx is the love of Barry’s life.