Skip to comments.Warren Buffett’s Uncle Sam (billionaire ignores Uncle Sam’s role in the housing collapse)
Posted on 12/01/2010 8:16:03 AM PST by SeekAndFind
Dear Uncle Warren,
When I was at school, there used to be an annual picture taken of all the pupils. Since there were quite a lot of us, the remarkable technology employed (at least it seemed remarkable at the time) was that of a still camera that panned from one end of the assembly, which stood in a curved formation, to the other. This produced a long, thin, photograph.
On several occasions, I recall, some young prankster, once his image had been captured at one end of the line, would attempt to sprint behind the wall of boys and install himself at the other end, so that he might appear, as if by magic, twice. When caught, the perpetrator would receive quiet admiration and a good strapping. I particularly remember the attempt by young Murphy, who was already famous for shooting an overweight prefect in the buttocks with an air rifle. Murphy subsequently joined the IRA. But I digress.
This distant memory was stirred when I saw the illustration above an open letter that appeared under your name in the National Post on Monday, in which you thanked Uncle Sam for doing a creditable job in keeping the U.S. (and thus the world) financially afloat. The cartoon featured a muscular and resolute-looking Uncle Sam, complete with Stars and Stripes top hat, standing firm against a set of large, tipping dominoes. That school picture came to mind because surely, if you were to follow the collapsed dominoes back to the person who pushed the first one, wouldnt it be Uncle Sam?
Most people know Uncle Sam from that famous illustration in the First World War recruiting poster, but just as Uncle Sam never got killed in the war, so he isnt throwing himself in front of any dominoes. What stopped them, or at least delayed them, was Uncle Sams ability to sacrifice others. Still, I suppose Dear American Taxpayer wouldnt have gone quite so well with your recent award of the Presidential Medal of Freedom for services to the state, and charitable arm-twisting.
Your letter gave a brief summary of the events that led to the alleged September 2008 brink. [E]verything, you wrote, began to turn into pumpkins and mice. A destructive economic force unlike any seen for generations had been unleashed. Only one counterforce was available, and that was you, Uncle Sam.
I liked the Cinderella reference. It fitted nicely with your economic fairy-tale theme, but, again, the question is: Who unleashed that destructive force?
You admitted that government is often clumsy, even inept. But, you went on to gush, when businesses and people worldwide race to get liquid, you are the only party with the resources to take the other side of the transaction.
But surely what you really mean is that only governments unlike, say, the perpetrators of small-scale unofficial Ponzi schemes, such as Bernie Madoff have the ability to commit their citizens to perpetual tax servitude and/or debauch the currency in order to rob savers and reward the profligate, or those who have made bad investments.
Isnt any government bailout just the socialization of failure, a process that inevitably leads to larger and larger moral hazards? Put another way, isnt the ingenuity and productivity of the private sector in a perpetual race to stay ahead of delusive government promises of economic security?
In doing your bit for state fiscal religion, you did admit that the idol of economic management might be a bit clayish in the foot department, but suggested that what it had going for it was the ability to stretch legal boundaries and avoid slowdowns, like congressional hearings and studies. That is, to ditch all that silly old democracy stuff.
I was a bit surprised by the bouquets you handed out to Ben Bernanke, Hank Paulson, Timothy Geithner and even George W. Bush, for their courage and dispatch. How much courage does it take to dispatch hundreds of billions of other peoples dollars? And isnt it a bit embarrassing that all this courage saved your own investment bacon when it came to Goldman Sachs and Moodys?
You seem remarkably forgiving of old Sammys failure to foresee the rot building up in the housing market, but what about his role in creating the rot? Again, you excuse the government for being part of a mass delusion, but dont mention the role of the artificially cheap money promoted by Uncle Sams brother, Uncle Fed, in pumping that ignis fatuus to conflagration size.
Of course I realize that since you are worth many, many billions, you must have far deeper insights than a mere scribbling pauper such as myself, but I also couldnt help reflecting that whoever your Irish equivalent might be (that is, if there are any billionaires left in Ireland), he is unlikely to be writing a thank-you note to any embodiment of the Irish government (St. Patrick perhaps, since he was in the miracle business?) for the great job he did in putting the full faith and credit of the state behind the countrys banking system. As for Uncle Euro, rumour has it that theres a movement to lock him up before he bankrupts the remaining semi-solvent members of the European Union.
In the end, your letter to Uncle Sam reminded me a bit of a childs letter to Santa Claus. Children grow out of Santa Claus, and somebody has to pay for Christmas, just as somebody has to pay for Uncle Sam. Indeed, if people hadnt gotten Uncle Sam and his equivalents around the world mixed up with Santa Claus, would this crisis ever have happened?
Your skeptical Canadian nephew,
Yup Warren is a Welfare Queen!
He has a lot of nerve lecturing to anyone about paying more taxes or anything else for that matter he puts his money in foundations to avoid paying taxes, yet we were forced through the bailouts to save his billions with our tax dollars.
The elites and corporatists use government as a tool to milk the citizens.
The Germans would tell you the bankers also caused WWII with their blood-thirsty reparations. Third world reparations, here we come...
The ROOT OF ALL EVIL, indeed.
And now they are causing another Depression look at Ireland the people forced to take on nearly $50,000 for each household of bad bank debt. And now the Fed/us are going to have to bail out the EU and here comes our Austerity recommendations from obama’s debt commission as if right on cue.
Irelands Fate Tied to Doomed Banks
Up to 50 billionnearly $50,000 for every household in the Emerald Isle.
Read it all to see the lies of the banks and politicians!
A failed banking sector that Irelands government can no longer rescue on its own. Ireland is in the midst of a real estate bust that could trump even the ruinous downturns that turned parts of southern California and Nevada into suburban ghost towns, with home-grown banks stoking it all. Now, those banks are trying to manage catastrophic losses. The Irish government has effectively nationalized the nations biggest banks by guaranteeing their debt, which would be akin to the U.S. government taking over Citigroup, Bank of America, J.P. Morgan Chase and Wells Fargo.
That means the Irish government is also on the hook for the losses those banks endurewhich have risen far beyond initial estimates, and may have a lot farther to go. So far, the Irish government is obligated to cover losses amounting to 175 percent of Irish GDP
Guess Who’s Paying For The Greece (Euro)Bailout? That’s Right — YOU
I wonder if we will end up in a war with China/N.Korea?
I see real problems ahead China is experiencing food shortages, inflation and they are mad at us for devaluing the dollar. Their last sale of debt didnt turn out too well either, I think they may want N. Korea as their ally in case conditions get too ugly with their own citizens.
China blocks UN action against N Korea
Check this part of the story out:
China Auction Failure
If the govt destroys the productive economy, everything else dies with it.
They can loan out all the money they want, it will come to NOTHING!
It's as though no one realizes that BANKS PRODUCE NOTHING BUT DEBT ! ! ! !
Your welcome they’ve done it they have destroyed our productive economy it will take a little longer I believe before we see a full collapse here but I believe we will see it I am preparing for the worst.