Good ol' Warren Buffett

Guy Somerset at Taki's takes him down a peg.
Buffett never tires of proclaiming he pays lower taxes than his employees. His constant exemplar of a secretary makes $60,000 annually—a respectable salary, yet not particularly generous as contrasted against running paperwork for one of the planet’s most active executives. Buffett himself makes approximately $46 million per year. And this is how the man who would care for all Americans provides for his own? Noblesse oblige begins at home, Warren...

Warren doesn’t state whether he is to assume any extraordinary liabilities of this country’s non-paying by utilizing the line on the American tax return whereupon one can voluntarily contribute beyond what is assessed. He is encouraged to make use of this assumption with all due haste so long as he donates his money and not our own.

Yet most infuriating about the entire debacle of debate is that in this Punch and Judy show in Washington, each continues to refer to the measure as making people “pay their fair share.” In this general notion, the author is in complete agreement. But we tend to disagree about who is not already paying that “fair share.”

What of the over 50% of American citizens who pay no income taxes whatsoever? Is zero percent their “fair share”? If so, one begs to differ. These are the very people who most avail themselves of social services of every kind. Not only do they pay nothing to begin with, they proceed to strip the system bare of the very things which those unpaid taxes so readily provide.

Like the author says, the problem is not that taxes aren't high enough, but that there are too many net tax consumers. Yet Buffett, a man of undeniable business acumen, seems unable to identify a single area of government waste.

Mike Krieger at Zero Hedge also puts the Buffster in perspective, commenting on his $5 billion stake in Bank of America. And make no mistake, the man is not running a charity.
So back to Buffett. The truth of the matter is, as I and other have exposed these last several years, is that he essentially runs a financial services company. When the system itself was threatened the status quo was threatened. Buffett stepped in and became a government agent once he saw the writing on the wall. He did not step up for America. He did not step up for the people. He stepped up for himself and his legacy. He stepped up to save the status quo because he is the status quo. All of this raises a very serious issue in America right now and one that needs to be dealt with in the next crisis (which has arrived) or we will never be able to recover into the world’s most vibrant and dynamic economy again. A lot of people lament the lack of upward mobility in the U.S. right now and I share those sentimentshare those sentiments. However, equally important is downward mobility. What makes the concept of America unique is not merely the concept that the poor can become rich but that the rich can become poor. It is this second part that is the most dangerous to social cohesion when it disappears. Unfortunately, the system that we have today of an unholy alliance between Wall Street, Washington D.C. and the multi-national corporations (including the military industrial complex of course) stands there holding onto all the levers of power to serve as gatekeepers of their own empires.

I've emphasized the money quote in Krieger's essay. What we euphemistically call "the system" has become unfair at a fundamental level, in that not only are the barriers to upward mobility so high but that the elite are insulated from their errors.


Visibilium said…
The question remains of how America brings back the risk of downward mobility without permitting systemic collapse. The answer is pretty simple if one thinks, as I do, that societal volatility is rooted in monetary volatility. Eliminate the Fed's discretionary instability.