We have proven any number of times in this blog that this is a hogwash argument, only meant to divide the country and increase the voting totals for the President this November. We have showed that even if you confiscated EVERY dollar annually earned by millionaire earners in this country or you confiscated the TOTAL wealth (cars, boats, homes, cash, real estate, etc.) of the wealthy in this country, you would never make a substantial dent in the debt problems this nation faces.
What we could not understand at that time is why Buffet was in such support of this asinine position. If we were smart enough to figure out this was only a divisive election year ploy, why wasn't Buffet smart enough to figure it out?
Which is when we hypothesized why this obvious ignorance might be going on. While all of this class warfare was going on, Bank of America was dropping deeper and deeper into dire financial straits. If a major, major bank like Bank Of America was to go under financially, this would have a seriously depressing impact on the whole financial system and the economy, something that any sitting President needs to avoid in a lead up to an election year.
We hypothesized (without any facts or proof, just circumstantial evidence) that Buffet was not being ignorant and a patsy of the President, he was just being a good business person. Our hypothesis went as follows:
- Bank Of America needed an infusion of capital to remain solvent.
- Obama needed the bank to stay solvent and help in dividing the country along class lines for his reelection.
- Buffet likes to make loads of money.
- We concluded the conspiracy went as follows:
- Obama asked Buffet to support his tax-the-rich strategy in return for arranging great terms and conditions for Buffet throwing some of his money to Bank Of America.
- Bank Of America received the infusion of cash and gave Buffet incredible terms, both short term and long term, from an interest and stock option perspective.
- Buffet returned the favor to Obama by supporting his nonsensical tax-the-rich rhetoric.
- Bank Of America at least temporarily avoided bankruptcy, helping keep the economy from taking a nose dive in an election year.
http://loathemygovernment.blogspot.com/search?q=%22bank+of+america%22
It seems that this is not the first time that Mr. Buffet played the political class for his own company's benefit. He has been all over Washington for the past few years, not for the benefit of the country, but for the benefit of his company, Berkshire Hathaway. Without going into a long, detailed description of the exploits of Mr. Buffet Goes to Washington that Mr. Schweizer provides in the article, consider the following highlights:
- Mr. Schweizer correctly describes Mr. Buffet as much as a"political entrepreneur" as a "business entrepreneur"
- He points out how Mr. Buffet, through Berkshire Hathaway, "has used taxpayer money as a vehicle to even greater profits and wealth" and that "the profitability of some of his largest investments rely on government largess and coddling with taxpayer money."
- At the height of the financial crisis in 2008, Buffet invested $5 billion in Goldman Sachs who needed the cash since it was not only short of cash but over leveraged in its investments. For his investment, Buffet received incredible terms including preferred stock with a whopping 10% yield and an attractive option to buy another $5 billion shares.
- However, he only did this because he expected the Federal government and Federal political class to bail out the banks: "If I didn't think the government was going to act [with taxpayer money], I wouldn't be doing anything this week."
- Buffet also had large financial stakes in other banks including Wells Fargo and U.S. Bancorp so he really needed the Federal government and political class to get a bank bailout plan implemented.
- To help that plan come to fruition, Schweizer points out Buffet went to work in Washington to ensure that the bank bailout program, TARP, actually got implemented by our politicians.
- The first bill to implement a bank bailout program was defeated in Congress but.......
- Many sitting Congressional people had large personal investments in Buffet's company: 1) Senator Bill Nelson held between $1 and $6 million of Berkshire stock, 2) Senator Dick Durbin bought Berkshire stock four times in just a three week period in late 2008, during the bailout debate in Congress, during the vote on the bailout and after the bailout vote, 3) Senator Claire McCaskill bought $500,000 worth of Berkshire stock just days after the bailout was approved, and 4) Senator Orrin Hatch also bought the stock during this time period.
- But it gets even better: following Buffet's investment in Goldman Sachs, Congressman John Boehner, Congressman Vern Buchanan, and Senator Jeff Bingaman also bought Goldman stock during this period.
- Senator Barack Obama was an early non-supporter of the bailout but over time he also became a supporter, probably with the support of Buffet since according to Schweizer, "Buffet struck a posture of cheering on the bailout from the sidelines" and more incredibly, he actually "participated in a conference call with House Speaker Nancy Pelosi and other House Democrats during which he pushed them to passed the [bailout] bill."
- Schweizer claims that without the bailout bill, it would be a financial disaster for the Berkshire investments in Goldman and other banks; with the bill he would receive a financial windfall.
- All told, financial companies that Buffet had major financial stakes in received $95 billion in TARP money while many banks, without Buffet's Washington connections received no bailout money, at least according to Robert Wilmers, chairman of M&T Bank: "The pattern is clear: the bailout money and the perks are concentrated among the big banks, the ones who pay the lobbyists and make the campaign contributions, while the healthy banks pay the freight."
- It was critical that Buffet's bank investments receive help since, according to the article, 30% of Berkshire's total wealth was tied up in the banking industry. The Houston Chronicle carried an investigative article in April, 2009 which concluded that Berkshire was one of the biggest beneficiaries of the banking bailout.
- Schweizer concludes that if Goldman had not received the bailout money, Berkshire would have taken a major hit on that investment rather than reaping $2.5 billion in profit on just the Goldman investment.
- But banks are not the only area where Buffet and Berkshire intersect with Washington. The article reviews how Buffet's purchase of Burlington Northern Santa Fe (BNSF) Railroad and its footprint of railroad tracks physically overlaps very nicely with his friend's/Barack Obama's pipe dream of a high speed rail network.
- Relative to Obama's $800 billion economic stimulus program, if you go to the program's website which tracks stimulus grants and loans and search on "BNSF," you get about 1,800 entries returned. Dig deeper into the search results and you find that Buffet interests received tens of millions of stimulus dollars, if not more, from a wide variety of Federal departments including Homeland Security and the EPA.
- And finally, after Buffet and his companies made billions of dollars off of taxpayer wealth in a wide variety of ways, he graciously decided to host a reelection fund raiser for Obama in August, 2011 at the cost of $35,000 for each attendee. Obviously, it was the least he could do.
As Mr. Schweizer concludes in his last paragraph: "Warren Buffet is a financial genius. But even better for his portfolio, though worse for the rest of us, he is a political genius.
We invite all readers of this blog to visit our new website, "The United States Of Purple," at:
http://www.unitedstatesofpurple.com/
The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.
The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment/
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