Posted on 11/04/2007 5:51:47 AM PST by Cassandra Oz
Buffett may be brilliant when it comes to picking stocks but in the field of economics he is a blithering buffoon. I have no way of knowing why Buffett has attached his colours to the Democrats, a party whose policies can be summed up in three slogans: raise taxes, raise government spending, regulate the economy. And keep on doing it until the economy sinks into stagnation, at which point they can blame everyone but themselves.
(I know that the Republicans’ spending record has been dismal, but at lease most of them can be made to see the light. This is something that can never be said of Kerry, Kennedy, Pelosi, etc.)
(Excerpt) Read more at brookesnews.com ...
Gerard Jackson BrookesNews.Com Monday 9 June 2007
Buffett may be brilliant when it comes to picking stocks but in the field of economics he is a blithering buffoon. I have no way of knowing why Buffett has attached his colours to the Democrats, a party whose policies can be summed up in three slogans: raise taxes, raise government spending, regulate the economy. And keep on doing it until the economy sinks into stagnation, at which point they can blame everyone but themselves.
(I know that the Republicans’ spending record has been dismal, but at lease most of them can be made to see the light. This is something that can never be said of Kerry, Kennedy, Pelosi, etc.)
Back in 2003 the brilliant Buffett attacked President Bush’s proposal to cut taxes on corporate dividends. He maliciously asserted that the tax cuts were unfair and economically useless. I thought it was pretty rich that one of America’s wealthiest men should caricature tax cuts for millions of people who are far less fortunate than himself as “unfair”. At time it was estimated that more than 50 per cent of the recipients of the dividend tax cut were senior citizens. Then of course there were the millions of Americans who would benefit through their pension funds. (In Australia and the UK such funds are called superannuation).
What I found troubling was not Buffett’s sanctimonious hypocrisy but the failure of the Republicans to demand that he publicly explain to these people why it was “unfair” for them to receive greater benefits from their savings. And this is from a man who flies around the country in private jets.
To state as he did that the tax cuts would not stimulate the economy smacked of partisan politics as well as economic illiteracy. Now Buffett is noted for buying low and investing for the long-term. A strategy that has served him and his investors extremely well. Can it be that it has completely eluded him that his investment strategy refutes his assertions about tax cuts? This could very well be the case. Irrespective of what today’s economists say, including Buffett’s economic advisors — if he has any — it is savings that fuel economic growth and not consumer spending*.
By making huge investments in shares on behalf of his clients Buffett is actually marshalling their savings and directing them into the production of future goods. It is the return from these successful investments that made Buffett one of world’s wealthiest men. By the same token pensioners who own shares are net savers. If they were not they would have to reduce if not actually dispose of the holdings. It follows that increasing their disposable income by cutting their tax liabilities should increase their savings which, by definition, will help fuel greater economic growth.
Let me put it another way: by ceasing to tax dividends twice and so lower the level of corporate taxation more savings will obviously be available for investment, And it rising per capita investment that raises living standards — not taxation or heavy government spending. Moreover, capital gains are profits. By cutting the capitals gains tax more savings are made available for investment, directing the market to greater production. It therefore follows that if Buffett’s tax advice had been followed America would now be a poorer country — though not Buffett himself. (To some economists, this process validates supply-economics. To others, albeit a few at the moment, it demonstrates Say’s Law of Markets).
The self-righteous Buffett never bothered to explain why the preceding analysis is wrong. Even worse, nearly four years later he is still claiming it doesn’t work. Am I to conclude that he thinks savings have nothing to do with investment and that consumer spending really is the key to economic growth. If that is true then he should be logically consistent and call for a 100 per cent tax on all savings. (This is a policy that Keynes would have sympathised with). Of course, such a tax would completely absorb all returns from investment.
Buffett doesn’t stop at attacking tax cuts. He also launched a verbal broadside against executive pay, saying that “there had been more misdirected compensation in corporate America in the past five years than in the last century”. Maybe so, but I reckon the 1899-1902 and the 1924-29 boom periods would take some beating. The reason I mentioned them is that they shared the same characteristics as the 1990s boom.
In other words, much of what passed as excess in the second half of the 1990s was fuelled by the Fed's criminally loose monetary policy. It was this policy that created the corporate scandals he fiercely condemns and not stock option grants which were merely one of the symptoms of Greenspan’s monetary boom.
During the past decades I have come across a number of people who have done very well for themselves on the share market. What was interesting about them is that they all admitted to being ignorant of economics. A characteristic they apparently share with Buffett. However, there was one particular feature that put them a cut — a very big cut, come to think of it — above Buffett: and that was their awareness that making a lot of money did not make them morally or intellectually superior to the rest of the citizenry. But Buffett is evidently the kind of billionaire who has come to believe that his vast wealth gives him the right to govern others. And if you are that kind of person, then the Democrat Party is just the place for you.
Warren Buffet is an ELITIST....ALL ELITISTS think they know BEST for everyone else. If he thinks he doesn’t pay enough in taxes, he should pay MORE...voluntarily!
I’d rather have a drink with Jimmy Buffet any day.
maybe buffet has a more sinister, soros-like reason for his attacks.
WIFE-O-BUCKHEAD
Don't be foolish about a man who has been able to accumulate bilions by buying nad selling investments in businesses. Follow the money. What will happen to the value of investment targets in the event policy makers follow Buffet's advice? With policy errors resulting in adverse economic conditions, the value of corporate assets decrease. Just what you want if you already have billions. Buffet is acting in his own interest by advocation anti-growth policies. It is that simple.
Warren Buffett Benefited From Death Tax
by Dick Patten, 7/10/2006
HumanEvents.com
When Buffet said he paid a smaller rate than his secretary did it not occur to him that his secretary needed a tax cut?
Warren Buffett is a Democrat because there is money to be made betting AGAINST the economy too.
He likes the way the Democrats try to control the economy, which makes the economic outcomes more predictable rather than have a free-market where economic outcomes are more variable. It’s a safer bet.
Buffett, a self-proclaimed DEMOCRAT, is a darling of the lib-Dem media.
If a self-proclaimed Republican billionaire were to begin tossing political critiques and zingers at a Democrat, he or she would be despised and loathed by the national media.
Warren Buffet = CEO of the “I Got Mine” club.
Thanks for the link. That explains everything about Buffett. High taxes drives business his way.
Simple answer. Democrat policies eliminate opportunity. This means less chance of the common riff-raff moving up out of their place. And less competition for elitists like Buffet.
That factor is why virtually all the super rich support liberalism. It creates a stratified society and prevents change.
Freep-mail me to get on or off my pro-life and Catholic Ping List:
Please ping me to all note-worthy Pro-Life or Catholic threads, or other threads of interest.
The liberal elitists seek a society that is comprised of the rich/governing, elitist class and the poor/governed, serf class with the ruling elite taxing the upper end of the serf class and then doling out these proceeds to the lower end of the serf class. The middle class is an anathema to the ruling elite because it aspires to financial independence, the true enemy of the elites. It’s sort of like “I’ve got mine. Pull up the ladder.” The aristocratic liberal elitist wants a large net worth for himself and very little earned income so that he can shelter as much of his income as he can from taxation. (Tax free municipal bonds are very popular with the elites.) Well, heck, we’d all like to do that but for most of us the savings required to create a substantial net worth comes from our income which they want to tax to death thus preventing us from saving and investing in an attempt to acquire the financial independence they have already achieved. No, instead they want to dole out the tax money they gouge from us (the income earners) to those who don’t work, don’t pay taxes, and who vote to keep these elites in office. It’s sick.
According to Rush’s website the top 50% of the current income earners pay 96% of the federal taxes. When less than 50% of the top income earners pay all the federal taxes we will have a very large problem because the majority (non-tax payers) will be in a position to vote into office these elitist socialists who will modify tax law to increase the transfer of wealth from the minority (tax payers) to the majority (non-tax payers).
Remember, the poor don’t pay taxes but neither do the very rich like Buffet.
At any time Warren could sit down at his little desk in his little proletarian house in Omaha and write a $billion check to the US Treasure. I guarantee you they will cash it. Why do we have to go first?
He says that his tax rate is less than his secretary's. What he doesn't say (and he probably knows this) is that when he and his secretary retire, she would get a much bigger social security check than he will, WHEN MEASURED in terms of percentage of former pay.
Buffet is very disingenious.
Let me also point out that since Buffhead owns a lot of HRBlock stock, he PERSONALLY BENEFITS from tax turmoil.
Buffett is a value investor. he wants to buy lots of stock when the market hits a really low bottom and Bush isn’t helping. That’s why he needs dems to trash the economy
Not a penny of the $30 billion he’s giving the Gates foundation is going towards taxes. IMHO this whole foundation loophole is the biggest problem of them all. I think we should have a $2 million inheritance tax deductible (i.e. $4 million for qualifying married couples). Any foundation gifts should apply towards that deductible. We’ve created a system of elite aristocratic foundations that controls trillions and uses that capital to throw their weight around for their insiders.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.