Billionaire investor Warren Buffett is out there clamoring for higher taxes on those whom politicians refer to as "wealthy" -- small business owners who are a great deal less wealthy than he is.
That's hardly surprising as Mr. Buffett is invested almost, though not altogether, in giant corporations . . . those that are deemed to be "too big to fail." Accordingly he is an indirect, though very substantial beneficiary of the bailouts and the other corporate welfare payments that the federal government channels to such behemoths.
So its only natural that he wants the public treasury to extract funds from the multitudes -- who are multitudes of magnitude less wealthy than he is -- to keep the gravy flowing into the giant corporations in which he is invested.
Mr. Buffett has just made a risk free $5 billion investment in the Bank of America, shoring up the bank's balance sheet, which had been deteriorating dramatically. The capital infusion was seen as a sign of Buffett's confidence in the B of A. The bank's common shares. which on the previous day had closed at $6.99, surged by 12% to $7.86 the next morning.
What Mr. Buffett actually is confident about is neither the financial skills nor the business acumen of the bank's management. It is based on the certainty that the government would keep the institution afloat come what may, just as it did the last time the "too big to fail" basket case was tottering.
In any event, Mr. Buffett almost immediately made a $500 million paper profit on his investment as a result of the uptick in the bank's stock price that resulted from his display of confidence. He didn't buy any common stock. He got preferred stock paying a 6% dividend together with warrants giving him the right to acquire common stock for $7.14 a share. All of this puts him in a significant advantage vis-a-vis B of A's common shareholders. In addition, he'd stand ahead of those common folk on a liquidation in the unlikely event of the bank actually failing.
This has become something of a modus operandi for the Omaha based investment sage. His other similar investments include:
* Investment banking goliath Goldman Sachs, which benefitted from both a prior government bailout and the feds having watched without similarly rescuing its competitors as they went down the drain, and
* General Electric, which Obama's CEO buddy, Jeffrey Immelt, has transformed into a bloated dependent adjunct of the government and that now epitomizes the corrupt nature of such symbiotic relationships.
Mr. Buffett also is an investor in The Washington Post, which, though not a bailout recipient, is nonetheless also a dependent (as well a virtual house organ) of the federal government, its bureaucracy, and the ruling political elite. The newspaper is doing quite nicely thanks to its business location in Washington, D.C., and its environs. The area is thriving on tax dollars as the government sucks the economic life blood out of the rest of the country. Even real estate is doing well, with prices rising apace with the inexorable growth of the parasitic industry located there.
While the rest of the country is experiencing disastrous unemployment and economic stagflation, at federal regulatory agencies employment has increased by 13% and budgets have risen by 16% under the Obama administration . . . and that's even before full implementation of such major regulation expanding measures as its financial reform and health care bills.
The "sage of Omaha" has plenty of incentive to keep the volume of tax funded gravy growing.
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