Everything is Awesome…
“As a result of this negative drumbeat, many
Americans now believe that their children will not live as well as they
themselves do,” Buffett wrote. “That view is dead wrong: The babies being born
in America today are the luckiest crop in history.”
-
Bloomberg Business News, Buffett Fires Lucky-to-Be-American Letter at
Politicians
By J.M. Hamilton
(3-5-2016)
Cue the happy music, perhaps
the Lego Movie theme song, Everything is Awesome, is
most appropriate…
For Rex Buffettus (aka Mr.
Warren Buffett) has descended from Omaha’s Olympian heights to let us mere
mortals know that all is right with the world, particularly America and the
American economy.
Enough with the doom-saying
politicians the multi-billionaire opined in the release of Berkshire Hathaway’s
annual
report, and in subsequent interviews (presumably taking aim at the wildly
popular – and populist - presidential candidates, Messrs. Sanders &
Trump). And shucks, I guess when
Berkshire turned in a record year – all is right in the world, owned
& operated by Plutocrat, Inc.
Per
the Guardian: The Omaha, Nebraska-based company reported a
record full-year profit of $24.08bn, up 21%, while operating profit rose 5% to
a record $17.36bn. Fourth quarter profit was up 32%, and operating profit rose
a larger-than-expected 18%.
Nice. Very nice.
One supposes – when you’re
a billionaire – and the entire economy is rigged in your favor, and you own the
Congress, and presidential candidates and Presidents… it’s
all good. Best to quash populist
outrage lifting up presidential candidates, Sanders & Trump, and spread the
word, America is purring like a well oiled machine… just
let us billionaires continue run things and make record profits. And so the propaganda campaign continues
-unabated, as does Mr. Buffet’s support for presidential candidate Clinton, and
before that, President Obama.
There’s just one
problem. The
fairy tale Mr. Buffet is spouting isn’t true, and the candidates and
populist politicians he decries are popular for a very good reason. The American public is many things, but they
are not stupid; the American public knows they have been taken for a ride by the
likes of Mr. Buffett and the billionaire class, and they and their children
have suffered, and will continue to suffer for it. Establishment candidates, particularly the
GOP, and Ms. Clinton too, are under fire as never before. Indeed the establishment itself is under fire
for running this country right into the ground.
Here’s
some inconvenient facts, Mr. Buffett, and friends, would like for us to
ignore:
Depending upon what
statistics you go by, somewhere between one in four and one in five American
children are born into, and exist, in poverty.
Over the last seven years
the poverty rate has doubled, per Mr. Dividovitz in a recent Bloomberg Surveillance interview with Mr. Tom Keene.
The number
of food stamp recipients has exceeded 45 million Americans four years
running, according to the Department of Agriculture. For the math challenged that’s somewhere
between one and ten and one in fifteen Americans, whom are either the working
poor - or the unemployed - who are
dependent upon government assistance just to survive.
U6, which not only tallies
up the government’s official unemployment statistic, but also includes
underemployment, and those who have given up looking for employment, has been
10%, and often considerably higher, for much of President Obama’s two terms in
office. President Obama inherited this
mess, but many of the President’s pro-plutocratic policies did little to
ameliorate these high unemployment conditions.
In short, President Obama was too busy adopting – or surrendering to - economic, trade, regulatory, and tax policies that benefited his wealthy
campaign contributors. Administration
policies that are all too often antithetical to the interests of the American
people.
Wages have been stagnating
in this country since the ‘90s. This is
by no accident, blame: M&A, private
equity, the financial crisis created by Wall St. banks, cartels and monopolies,
free trade agreements, globalization, automation, robotics, and a feckless
Congress, run by owned politicians.
Wage and wealth inequality
are at highs not seen, since the last Gilded Age. Many have cited the statistic that 99%
of all new income in our society is going to the 1%, and Mr. Buffett
wonders why Messrs. Sanders and Trump are very popular.
Yup,
per the folksy, grandfatherly, Mr. Buffet – the smiley face of crony-capitalism
- everything is just peachy keen,
and indeed, Awesome.
Get out those pom-poms Mr. Buffett and cheer a little louder and we just
might believe you. NOT.
At
the end of the day, Mr. Buffett is a hypocrite. Where most billionaires wisely live in the
shadows – many eschew the limelight for very good reason – Mr. Buffett has
taken it upon himself to be the yell-leader, not for capitalism, but crony-
capitalism. That dichotomy is very
important, because capitalism – when actually practiced – is market driven, w/
necessary government intervention.
Government intervention, when appropriately applied, insures:
competition in the market place; strong aggregate demand, via fair wages and
benefits paid to American workers; and consumers and employees benefit from
many competing entrants/businesses into the market place, keeping prices in
check.
On the other hand,
crony-capitalism, whom Mr. Buffett is the godfather of, is the antithesis of
capitalism or the anti-capitalism.
Crony-capitalism is in bed with government, in fact - owns government, and
seeks: monopoly and monopolist pricing concessions; it advocates top-down free
trade agreements that exploit low wage workers - globally, to the detriment of
American workers; crony-capitalism exploits tax policy for its own ends,
leaving the 99% to pick up the tax tab; it engages in regulatory capture so
that businesses' social costs are picked up by the taxpayer and society, and it loves
rigged courts; and crony-capitalism oversees the redistribution of wealth –
via the aforementioned, and through the Federal
Reserve – from the 99% to the 1%.
As Mr. Buffett once
infamously noted: Class warfare is
practiced in America, and my side (aka the Billionaire Class) won. J.M.H. has taken on Mr. Buffett’s hypocrisy
before, read here
and here.
Mr. Berkshire Hathaway’s
special blend of fiction is worth revisiting and expanding upon, because if our
elected officials truly want to turn this economy around (or prevent a
political revolution), than here’s a brief tutorial. (Note, some of these points are duplicated from
my write up of last year, entitled: False
Gods)
1) Mr. Buffett
has been said to lament the tax rates he and other plutocrats pay (which are often non-existent to exceptionally low), versus the tax
rates, say his secretary pays. But then we learn that Mr. Buffett helped finance Burger King’s recent tax
inversion or tax avoidance scheme. My
guess is this is just the tip of the iceberg in Berkshire’s efforts to keep
their conglomerates effective tax rate well below his secretary’s tax rate.
2) Mr. Buffett
said that the plutocracy has been engaged in class warfare against the poor and
the middle class for sometime, and that his side won. And yet, if
anything, Berkshire Hathaway’s lobbying efforts have picked up
steam, particularly under the
Obama Administration. Looks like Berkshire’s class warfare is not about
to let up anytime soon.
3) Mr. Buffet
has called the Federal Reserve the greatest hedge fund around. Mr. Buffet would know, since he and his companies have been one
of the largest beneficiaries of the Fed’s actions. Actions that have done
little to turn the economy around, and have harmed the middle class.
4) Warren has
called derivatives and swaps financial weapons of mass destruction. And
yet, Mr. Buffett’s companies play with these weapons and
have profited from them immensely; these
weapons are also largely reinsured by the American Public (meaning the taxpayer
does not profit from these instruments of mass destruction, but is called upon
to pick up the pieces, when they go off – see the 2008 financial crisis.)
5) Many of the
monopolies and oligopolies Mr. Buffet’s conglomerate holds are able to make
exceptional amounts of money, because the products are well known, and often
enjoy relatively inelastic demand. Meaning Mr. Buffett can set
price. In such a market, it does little harm to Mr. Buffett’s profits,
and certainly less harm to the businesses themselves, to pay his employees a
living wage. And yet, Mr. Buffett has been quoted recently as
stating that higher minimum wages will harm the working poor. His statist solution: Have our bankrupt federal government expand
the tax credit for the working poor. In this manner, Mr. Buffet’s
monopolistic profits go untouched, and the working poor continue to be the
State's wards.
6) In Berkshire’s most recent financial report,
Mr. Buffett is said to have spent 10% of his cover letter defending the
business practices of 3G. 3G
is the private equity firm that gutted takeover acquisition, Heinz’, labor pool
(despite up front assurances that said labor gutting would not transpire). Mr. Buffett also defended his 3G
partnership with Clayton Homes.
Clayton Homes is known for engaging in predatory lending practices,
generally aimed at defrauding minorities.
3G’s tax inversion deal, between Burger King and Canada’s Tim Horton,
was in part financed by Mr. Buffett. Wall
St. banks, private equity, and hedge
funds are among the top dangers to America and Americans today, and
Berkshire Hathaway is in deep with these segments, either holding stock and/or
partnering with said institutions.
7) Mr. Buffet expresses concerns about climate
change in his annual report, and pushes back on calls for Berkshire to
elaborate on how climate change would impact his insurance empire. But Mr. Buffett may have other reasons for
pushing back on calls for expanding upon the risks climate change poses (like
protecting some of his investments that are directly correlated with
contributing to the destruction of the planet). Among them: Mr. Buffett’s choo-choo, BNSF, hauls enough
coal per annum to supply electricity to one in ten U.S. homes; and Mr. Buffett,
who has a controlling interest in an outdated NV utility, has lobbied hard to
remove solar subsidies for NV homeowners. Having failed before, Warren recently decided to take another plunge into Big Oil.
That’s mighty climate friendly of Mr. Buffett, and highly self-serving.
8) There’s another reason why Mr. Buffett wants
us to believe the economy is going very well for us all, and her name is Ms.
Hillary Clinton. His
support for Ms. Clinton means a third Obama term, and the continuation of
government, tax, regulatory, and free trade policies that have so richly
benefited Berkshire Hathaway. The
Clintons and Obama have been on the receiving end of ramped up Berkshire
campaign contributions, and the Clinton Foundation, directly or indirectly, has
received money from Mr. Buffet’s family.
Hillary is so politically malleable, and has such a long history of
saying one thing and doing another, that she provides the perfect political
front for Berkshire’s business interests.
However, it is Ms. Clinton's, indeed the entire political establishment's, malleability and double dealing against the American people (where the ends – personal enrichment - always justify the means – screwing Americans over) that has led to the political upheaval that Mr. Buffett now decries.
If
Mr. Buffett doesn’t like the trend and trajectory of American politics, he need
only take a long hard look in the mirror, not only for the root causes but
also for the solutions.
The billionaire class has
acted with preternatural
greed, and, perhaps intentionally or unintentionally, perfected
malice towards the American people.
Responsible billionaires would police themselves up, before this
political revolution takes a nasty turn for the worse.
My guess is… it’s too
late. Many
Americans have had enough of billionaires, and more Americans have had enough
of class warfare perpetrated by billionaires.
Now, it will take a miracle for a GOP establishment candidate to receive
the nomination; and Ms. Clinton’s nomination, if it happens, is likely to be
corseted in ignominy and continuous investigations.
Go team, Buffett! Yeah.
Copyright JM Hamilton Publishing
2016
