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The staggering hypocrisy of Warren Buffett
American Thinker ^ | 05/07/2023 | Jack Hellner

Posted on 05/07/2023 4:57:36 PM PDT by SeekAndFind

Somehow, Warren Buffett believes that the federal government should cover all depositors, no matter how rich they are, even though the FDIC specifically states that it covers only $250,000, and that is what it charges insurance premiums on.  Underwriting risks seems to be a foreign concept to Buffett. 

Warren Buffett said Saturday that it would have been "catastrophic" to let any Silicon Valley Bank depositors lose their money when regulators seized the troubled California lender.

The fall of Silicon Valley Bank on March 10 triggered panic across the financial system. In a bid to restore calm, US officials made the controversial decision to protect all depositors at the failed institution even if their accounts were above the $250,000 limit insured by the Federal Deposit Insurance Corporation.

Therefore, I believe that Buffett should cover all losses for people insured by Geico, which is 100% owned by Berkshire Hathaway, no matter what limits the policies have.  I am sure that would be acceptable to him, the shareholders, and the regulators.  After all, it is catastrophic for the insured when they have to pay some of their own losses. 

Geico is owned by Berkshire Hathaway, which is led by well-known investor Warren Buffet. Warren Buffett has owned shares of Geico stock since 1951, and Geico became a wholly-owned subsidiary of Berkshire Hathaway in 1996.

Geico is the second largest auto insurer in the U.S. providing coverage for more than 28 million vehicles and over 17 million auto policy holders. Originally specializing in insurance for government workers, Geico has since expanded their customer base to offer affordable insurance rates in all 50 states.

Leftists somehow believe that the government has unlimited funds.  Buffett also does everything to reduce his tax bill while lecturing others that they should pay more


(Excerpt) Read more at americanthinker.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: buffett; geico; hypocrisy; svb; warrenbuffet
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For example, Berkshire Hathaway pays a zero dividend rate no matter how much excess cash it has so he doesn't get double-taxed.  Then he donates stock at current value, instead of his cost, in order to reduce his tax.  It is a huge subsidy that helps only the rich.  Why doesn't he sell the stock, pay the capital gains tax, and donate the excess if he wants to pay more?
1 posted on 05/07/2023 4:57:36 PM PDT by SeekAndFind
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To: SeekAndFind
Buffett has a point here.

I'm all for honoring contracts, but in today's age a $250,000 FDIC limit makes no sense for business bank accounts.

We had an FR discussion on this back when SVB first collapsed. I estimated that under a $250,000 FDIC insurance limit, the Ford Motor Company (just one example) would need something like 1,800 different bank accounts just to cover its biweekly payroll.

And then there's the problem of how you sell a home for more than $250,000 when the typical transaction involves between a minimum of three different bank accounts.

2 posted on 05/07/2023 5:01:58 PM PDT by Alberta's Child ("I've just pissed in my pants and nobody can do anything about it." -- Major Fambrough)
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To: SeekAndFind

.


3 posted on 05/07/2023 5:06:04 PM PDT by sauropod (“If they don’t believe our lies, well, that’s just conspiracy theorist stuff, there.”)
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To: SeekAndFind

He did praise the quick saving of the bank but later in the question/answer either he, or Charlie Munger, did say there needs to be some consequence for the actions of SVB and that for most depositors the banking industry is fairly opaque. (e.g. crafted financial instruments which are difficult to unwind)


4 posted on 05/07/2023 5:06:58 PM PDT by posterchild
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To: Alberta's Child

Well, I think the idea would be, because you are only insured to $250,000, you should DAMN WELL, pay attention to the operation of that bank. Sitting back and waiting for a bail out is not, what I would suggest, the answer.


5 posted on 05/07/2023 5:11:45 PM PDT by fhayek
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To: SeekAndFind

SPJNK.


6 posted on 05/07/2023 5:14:49 PM PDT by Carriage Hill (A society grows great when old men plant trees, in whose shade they know they will never sit.)
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To: fhayek

I agree with that and with the original posters point but merely pointing out that there was a lot more said on the topic throughout the question/answer period.


7 posted on 05/07/2023 5:16:02 PM PDT by posterchild
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To: fhayek
There's a downside to this that isn't so far-fetched.

If a major corporation with tens of thousands of employees has to worry about the stability of its banks, then the entire banking industry will change dramatically. Only large banks will survive. And even then, many major companies will decide to set up their own banks, and their employees will all be forced to do business with the company bank.

It's kind of funny how the same people that complain here on FR about the U.S. banking system getting shrunk down to 4-5 major banks are the same ones who complain that the U.S. government shouldn't bail banks out ... when the refusal to bail out smaller banks is only going to accelerate that trend.

8 posted on 05/07/2023 5:17:05 PM PDT by Alberta's Child ("I've just pissed in my pants and nobody can do anything about it." -- Major Fambrough)
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To: Alberta's Child

I am not expert (that goes without saying), but I suggest that there COULD be a free market solution. Ford deals with a bank, but also pays an insurance premium that with some large banking/insurance concern that kicks in if the original bank fails. No government fingerprints necessary. The insurer would have all the incentive in the world to keep tabs on the bank in question. Again, not perfect, but preferable to the government’s involvement. At least IMHO...


9 posted on 05/07/2023 5:23:39 PM PDT by fhayek
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To: fhayek
That may be an improvement. The potential problem there should be obvious: What happens if the insurers fail?

That’s not an outlandish possibility. In fact, the collapse and near failure of major insurer AIG was one of the things that made the 2008 financial collapse so devastating.

We are discussing some questions here that go right to the core of the stability of our entire financial system.

10 posted on 05/07/2023 5:27:18 PM PDT by Alberta's Child ("I've just pissed in my pants and nobody can do anything about it." -- Major Fambrough)
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To: SeekAndFind

The world has really passed this old man by.


11 posted on 05/07/2023 5:28:19 PM PDT by Levy78 (Reject modernity, embrace tradition. )
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To: Levy78

I certainly have some differences with Warren Buffett, particularly the charities he supports, but in many ways he rejects a lot of ephemeral fads of modernity and embraces wisdom from an older tradition.


12 posted on 05/07/2023 5:32:09 PM PDT by posterchild
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To: Alberta's Child

It’s kind of funny how the same people that complain here on FR about the U.S. banking system getting shrunk down to 4-5 major banks are the same ones who complain that the U.S. government shouldn’t bail banks out

- - - - - - -

Conservatives want to reduce barriers to entry and regulations to have more and better businesses. It’s stupid to suggest that means one wants bailouts.


13 posted on 05/07/2023 5:36:12 PM PDT by TTFX
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To: SeekAndFind

There used to be banks dedicated to serving businesses.


14 posted on 05/07/2023 5:50:58 PM PDT by Brian Griffin
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To: posterchild

Agree, but he fails to understand the impact of a lot of tech. Hell, I’m less than half his age and it’s hard for me wrap my arms around some of it.


15 posted on 05/07/2023 5:52:00 PM PDT by Levy78 (Reject modernity, embrace tradition. )
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To: sauropod

IIRC-—He has fought the IRS for years over BACK TAXES


16 posted on 05/07/2023 5:53:08 PM PDT by ridesthemiles
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To: Alberta's Child

“In the United States, AIG is the largest underwriter of commercial and industrial insurance.”

https://en.wikipedia.org/wiki/American_International_Group


17 posted on 05/07/2023 5:55:17 PM PDT by Brian Griffin
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To: SeekAndFind

The biggest risk of all is an operation run out of Washington, DC.

It can turn $32 trillion of possible value into wallpaper with the aid of just 270 (51 + 218 + 1) people.


18 posted on 05/07/2023 6:01:43 PM PDT by Brian Griffin
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To: SeekAndFind

The way to deal with risk is auditing and questioning.

Who is your auditing firm?

Please give us copies of your latest FDIC status forms.


19 posted on 05/07/2023 6:07:42 PM PDT by Brian Griffin
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To: Alberta's Child

“And then there’s the problem of how you sell a home for more than $250,000 when the typical transaction involves between a minimum of three different bank accounts.”

Each of the $250,000 checks may be bad.

Each of the three banks the $250,000 checks are deposited at may be unsound.

When I sold my Reston, VA house I bought stock with the net proceeds.

In Britain, house sales can involve a chain of contingent sales transactions. Sale 1 completes just after Sale 2 completes which is just after Sale 3 completes...

The faster the completed chain is wound up by closes the less actual risk there is.


20 posted on 05/07/2023 6:20:03 PM PDT by Brian Griffin
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