Why Warren Buffett is Really Supporting President Obama
By now, I’m sure you’ve all read or heard Warren Buffett’s piece in the Wall Street Journal calling for more taxes on the rich, surprising many people.
And on Thursday (before we went into Irene mode), Bill O’Reilly dedicated a segment to Buffett’s support for Obama in which O’Reilly expressed disbelief over Buffett’s support of the President. Seems that one of the richest men in America, and one of our most respected business leaders, supports the man who tanking the economy and sustaining 9% unemployment.
In fact, lots of people don’t understand how such a renowned businessman can support Obama. Which is surprising to me.
Because Buffett is 100% supporting Obama because he is such a renowned businessman.
There are several business advantages Buffett can achieve by keeping Obama in office.
Advantage 1 – No More Taxes
Warren Buffett runs Berkshire Hathaway, one of the most successful investment companies in the world. It generated billions in profit and billions in taxes.
And on April 15, I’m sure Buffett noticed that while he was writing an enormous check to the IRS, General Electric wasn’t. And I’m sure Buffett noticed that GE CEO Jeffrey Immelt is a die-hard Obama supporter who has been active in pushing the President’s agenda. So don’t be surprised to find out that Obama will create some tax loophole where all of a sudden Berkshire Hathaway, just like GE, doesn’t pay taxes anymore.
This is plausible. Re-read what Buffett wrote. While he cites his personal tax rate, when he makes his call to raise taxes on the rich, he doesn’t say “raise our taxes”, he asks the president to raise taxes on his uber-rich friends. Buffett seems to be ok with OTHERS getting their taxes raised, not necessarily his. I guess he figures he better be Obama’s pitchman before someone else gets the same idea.
Advantage 2 – Safeguard Buffett’s $5 billion Bank of America Investment
Buffett just invested $5 billion in Bank of America. President Obama and his administration have made it clear that they believe that if another bank bailout is needed, they will do it. This includes Bank of America. So, with Obama in office, Buffett faces no risk in his investment.
As long as Obama is in office, it is safer for Buffett to invest his $5 billion in Bank of America than depositing it with Bank of America. I do not think that is right, but I don’t blame Buffett. If I had $5 billion, and someone told I could invest it risk free as long as I kept one guy in office, I’d probably do it to.
Advantage 3 – Political Goodwill
Buffett is an investor. And although he personally hates Wall Street, he definately gets lumped into that group. And Wall Street certainly isn’t popular with the American people. At all. Buffett realizes there is an enourmous target on both his back and on his company.
But then I’m sure he looks at Jon Corzine, former Democratic Senator and Governor of New Jersey, former CEO of Goldman Sachs, current CEO of MF Global and current Obama supporter and fundraiser.
And wouldn’t you know it, even though Corzine is CEO of a Wall Street trading in futures and driving up the price of gas via futures contracts, Obama has no target on Corzine or MF Global. And Buffett, I’m sure, wants the same protections for his company that Corzine enjoys. Hence the fundraising and support.
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