A BUFFETT OF MONEY

Billionaire hedge fund guru Warren Buffett was the latest progressive recently calling for higher taxes on the rich* with an op-ed in the New York Times (somebody please send him this link).   He claims he only paid seventeen percent in taxes last year; far less than others in his own company:

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Why do they feel so compelled?  Are these "blessings" being showered upon them done out of the kindness of legislative hearts, or could there be other, more base reasons?  Could it possibly be the millions of dollars people like Buffett shower on political campaigns?  Perhaps the one-on-one exposure with certain members of government - exposure of which their own constituents (and the ones who ultimately pay the price for these dealings) can only dream?  Or maybe the odd coincidence of so many former federal employees finding themselves jobs on Wall Street or K Street with the help of crony connections?  A spotted owl is made endangered through no fault of it's own.  The same cannot be said about the 'coddled rich'.  It's called corruption, Mr. Buffett, and you are complicit.

In his op-ed, he raises good points about capital gains and other loopholes but ultimately, he isn't looking for tax reform, he's calling for tax increases. 

Big difference.

What we need is tax reform - removing loopholes and carve-outs and widening the tax base.  So why would he call for tax increases instead?  Well, it seems there is a little piece of information that Mr. Buffett and the NY Times forgot to mention (full disclosure is for suckers).   Apparently Mr. Buffett's company offers certain investment plans that, if taxes were to go up, would see a marked increase in business due to their sheltering natures, and thus a tidy profit for Mr. Buffett.  Who will then instruct his small army of tax attorneys and accountants - who surely couldn't be part of the reason he only paid seventeen percent - to find every loophole possible (conveniently provided by his pals in Congress after some vigorous lobbying) to keep from paying as little of the new taxes as possible. 

What a racket.

Lets not forget, too, that he gets to play the patriotic hero, swooping in to the rescue as well as giving his good buddy Obama a nice little talking point for the campaign trail.  Everybody wins!  Well, except the middle class, whose 'millionaires and billionaires' in the $200,000 tax bracket take one on the chin.

But wait, there's more!

Not only will Buffett profit quite tidily by the increase in business, but it turns out Omaha's favorite son's business has had a bit of a problem paying it's taxes.  It seems that Berkshire Hathaway, Buffett's influential investment firm, hasn't paid it's taxes in almost a decade - since 2002, to be exact. 

Which begs the question: Why, exactly, he is demanding taxes be raised because of 'shared sacrifice', when he isn't even paying what he owes now?

But wait, there's more!

Last week, President Obama made a little phone call to his dear friend Buffett, giving him a heads up on the situation with the floundering  Bank of America.  Buffett had a bathtub epiphany and decided to invest $5 billion (the article is really wonky but highly enlightening)  in the company. Except he really didn't.  Technically, the warrants BofA offered him equals about half the amount he invested - $2.45 billion:

So Buffett is really only injecting $2.55 billion of new capital into Bank of America and receiving $300 million per year in interest (6% * $5 billion). If you divide $300 million by $2.55 billion, you get an effective interest rate on Buffett’s investment of 11.8%. That’s pretty expensive for a bank that claims it doesn’t need any new capital!

Guess what else he got out of the deal?  A nifty little tax break.  It doesn't take an oracle to see why he jumped all over this deal.  Did I mention Buffett is throwing a big fundraiser for Obama at the end of September?  Apparently the party favors will be back scratchers.

The only problem for Buffett is that it is beginning to seem like he is using his reputation of having a nose for deals to promote the Obama agenda and people are starting to question whether his famous instincts haven't been dulled by ideology.  The cash infusion into BofA was supposed to foster confidence.  Instead, there are grumbles about how much trouble the bank is really in. 

With our paychecks shrinking and the cost of goods rising, it's getting harder and harder to pay the bills and put dinner on the table.  Getting lectured by the billionaire buddy of the Spender-in-Chief about "shared sacrifice" as his political connections help him make hundreds of millions of dollars in profits while simultaneously evading taxes is rather hard to swallow.   


*  "Rich"  being 'millionaires' and 'billionaires' making a staggering $200,000 and up.  Also known as making enough to be taxed but not enough to be able to afford the accountants and lawyers to get out of the taxes, like real millionaires and billionaires.  Bye-bye small business and middle class!

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A BUFFETT OF MONEY

THE OPTICS OF R&R

There has been a lot of argument this week over the First Family's current vacation on Martha's Vineyard.  Liberals argue that all presidents take vacations, they need vacations, and how dare anyone begrudge him a vacation! (and besides, the eeeevil Bush took, like, twice as many!!!1!)  Many conservative pundits have agreed with this argument, and for good reason.  Presidents never really take vacations.  Their staff travel with them everywhere (thus incurring a goodly chunk of the expense) and they are constantly being briefed - even on the golf course.  It is a ridiculously stressful job and no matter who is in the White House, a little time away from the official residence is understandable.

(On a side note: it doesn't really resonate, though, when he promises a new jobs plan...but we have to wait until he comes back from vacation to unveil it.  What?  Are you kidding? Granted, the August recess is rather long, but this isn't a tv show where there have to be cliffhangers to keep people tuned in.  It's real life and we're dealing with 9.1% unemployment here)

But let's put this in perspective, shall we? 

Yes,  George W. Bush spent a good deal of time of vacation - certainly more than President Obama at this point in his presidency (although the claims of only 26 days in Obama's three years in office is incorrect - that number was for his first year alone).  It is important to note that he went to either Camp David or his ranch in Texas for his vacations.  It should also be noted that several of those trips to the ranch were diplomatic or otherwise official business, not just pure pleasure.  An invitation to the ranch was a coveted thing back in the day, even for heads of state.  But even then, his vacation numbers are pretty high, and he got duly thwacked for it in the press. 

The thing is, aside from the travel expense of Air Force One and all that entails (can someone explain to me why the Obamas had to take two separate planes, four hours apart, for this trip instead of flying together?), Bush's vacations were relatively cheap for the taxpayers, as he and his staff were ensconced on his ranch.  This meant no buying up of entire floors of hotels, no room service, no inconvenience for other vacationers.  For the Bushes, the problem was the amount of time spent 'on vacation', not the expense of it.  Comparing the two is apples and oranges, but every liberal you discuss this issue with will bring up ad nauseum how many days Bush spent on vacation to keep from talking about the costs involved.  It doesn't matter what the true issue is.  They know which arguments they can win, and those are the arguments they are sticking with.

The First Lady is not immune from criticism either on this issue.  This Daily Mail article skewers Michelle Obama's expensive vacation tastes, so that naturally brings up the question of former First Lady Laura Bush's vacation habits in contrast.  Unfortunately for Mrs. Obama, she doesn't compare quite as favorably as she'd no doubt like.  It turns out that Laura Bush took a girls-only trip every year of her husband's presidency.   But whereas First Lady Michelle Obama's idea of a getaway with friends involves glitzy, paparazzi infested five-star resorts in Spain, Mrs. Bush preferred to quietly meet with old friends and go...camping. 

It's not the fact that the Obama's are vacationing that rankles - quite frankly many conservatives see their being away from DC for a few weeks as a welcome respite, if nothing else - it's where they are doing it, and with whom.  The Vineyard screams old money and privilege and in this economy, where many, many people are not only not taking vacations, but have no jobs from which to vacate, it really hits a sour note.

Expensive, extravagant vacations do not send out an "I feel your pain" vibe, especially when the public is on the hook for a large portion of the cost.  If the President or his staff were at all concerned with optics, they would have had the First Family vacation at Camp David.  It offers a lot for a young, active family - horseback riding, basketball, bowling, tennis, swimming, hiking, skeet shooting, even golf - with all the comforts of a top-notch resort and the added bonus of the appropriate optics for a man presiding over two (three? four?) wars and a down economy.  There is ample space for staff and Secret Service, it's secure and, most importantly, it's already paid for.

Camp David has been a favorite of Presidents since it was converted into a presidential retreat by FDR in 1942.  In times of war and peace alike, presidents vacationed there, cushioned in the lap of secure luxury.   True, Reagan loved nothing more than to vacation in exclusive, expensive Santa Barbara, but when he did, he was staying at his own ranch.  JFK frequently vacationed at expansive family homes in the elite stomping grounds of not just Martha's Vineyard, but posh Palm Beach Florida as well.  But President Obama does not have a family spread at the Vineyard, and while people are understanding about going home for vacation (even if home is a wealthy 'compound' or, say, Hawai'i), he has no roots there, no reason for the expense aside from the fact that they simply want to vacation at the Vineyard.  If they had decided to scrap their plans for the Vineyard this year and vacationed instead at Camp David citing sympathy for the suffering of their fellow Americans, there would probably have been an awful lot less grumbling and they might have even managed to turn it into a PR coup. 

Unfortunately, our president and his lady - chic, cool, hip young urbanites that they are - require more public digs, and damn the optics.  It's hard to imagine the level of headache this is for the Secret Service.  It's easy, however, to imagine the level of cost this incurs, and it's also easy to imagine who is picking up the bulk of the tab.   

The problem for the president is that, in his quest for reelection, he is trying to persuade the American people that he, too, is a simple man of the people - that he feels their pain and is sharing their sacrifice.  It's hard to paint someone who is hobnobbing with the elite in the poster town for wealth and privilege as an 'everyman' when the real everyman is taking a staycation (code for a week on the sofa with Netflix) and thanking their lucky stars that they have a job.  For now, at least.

Which is a concern the president might be more sympathetic with next summer.

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THE OPTICS OF R&R

THE SPENDING IS NUTS

My husband sent me this (thanks, Joe!), and I just had to post it.  It is a short film by Justin Folk called "The Spending is Nuts".  It's a charming story about a nation of squirrels gone awry.  This film is so good, you might even want to show it to your kids (via ebaums world):





Looks like it's up to us to give those squirrels a happy ending in 2012!

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THE SPENDING IS NUTS

ATTACK OF THE DEBT TERRORISTS

The best way to defang a verbal attack is to own the label being applied.  The past few weeks have shown that the newest label for Tea Partiers is "terrorist".  Perhaps it's because the accusing liberals are struck with fear every time they realize the Tea Partiers really were elected with a mandate, refuse to back down and actually gain strength by standing strong against politics as usual.  Perhaps it's just political hackery at it's most base.  But when even the Vice President is using the smear (a charge he has since denied), you know it's gone mainstream.   Go figure - the tea party movement is all about defusing the debt bomb progressives from both parties have spent decades building, but they are the terrorists.  Huh. 

So I have a suggestion. For all you tea partiers who are offended by the slur (as was I at first), rethink your offense. Let's take it and make it work for us. They want to call us terrorists?  Well, okay.  Let's take a look at the movement first, and what motivated it on it's current...well, for want of a better word, jihad.  It really has its roots in the Bush administration, specifically those who voted out republicans in 2006 due to their RINO tendency to spend like a debutant with daddy's credit card.  The grumbling grew in the summer of 2008 when the TARP scheme was hatched and ushered in the age of Obama.  The movement really exploded in 2009 in the run-up to the passage of the failed nearly trillion-dollar "stimulus" bill and has established itself as a fiscal conservative David battling the Goliath of tax and spend Washington.  They dealt the beast quite a blow last November and gained some power as a result.  The victims of the Tea Party onslaught were strewn across both sides of the aisle then; the only common thread being their profligate, politics-as-usual ways. 

It might help to swallow the bitter pill of the terrorist label to know that you are, actually, in excellent company. 

The newly minted "Debt Terrorists" should release their manifesto:

Be warned, all you big spenders on Capitol Hill, your days are numbered. The agenda is clear. There will be no stopping until these demands are met:

1) Cut spending on a deep, meaningful, long term level

2) Cap spending levels by tying them to GDP

3) Balanced Budget Amendment

4) Reform Social Security (a good place to start is means testing)

5) Reform Medicare (means test here, too)

6) Repeal of the economy killing ObamaCare legislation

7) Rein in the out of control EPA and NLRB

8) Revamp tax code - lower it, flatten it out and get rid of the loopholes

If you do not give in to these demands, you will be replaced with someone who will in the next election.  If you think we're not as good as our word, consider the sixty-three who didn't come back in 2010.  We mean business.

Please note "create jobs" is not on the list. Why?  Because government doesn't create jobs it only creates the conditions to create jobs, that's why. But if the things on that list are done, jobs will follow.

If that is what the left calls "terrorism" these days, then terrorists we are. And if part of the jihad is having to stomp on Harry, Barry and Nancy's toes to get them to open their mouths and take the medicine We the People voted for last year, well so be it. 

The debt jihad has begun.

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ATTACK OF THE DEBT TERRORISTS