Misplaced Gratitude

Thursday, November 18, 2010

Warren Buffett pens a "thank you" letter to his Uncle Sam for "saving" us all from the housing bubble.

You have been criticized, Uncle Sam, for some of the earlier decisions that got us in this mess -- most prominently, for not battling the rot building up in the housing market. But then few of your critics saw matters clearly either. In truth, almost all of the country became possessed by the idea that home prices could never fall significantly.
Not only did Uncle Sam "not battle" the rot, he caused it, by encouraging Americans (bankers in particular) to assume financial risks (particularly in real estate) they shouldn't have taken.

One wonders whether Mr. Buffett would feel the same level of gratitude had an uncle set his house ablaze while he was inside it, and then "rescued" him from the inferno.

-- CAV

PS: I must add that, in terms of preventing a financial collapse, I am far less optimistic than Buffett seems to be that the government has done even this much.


Today: Added a PS.


Anonymous said...

Hi Gus,
My respect for Warren Buffett disappeared when he lobbied for the expansion of the death tax. Previously, even though he had profited greatly by exploiting that law, I had withheld judgement on the basis that he hadn't made the law, had not (until then) publicly endorsed the law and, it could be argued, that he provided a necessary service to those being victimized by that law in that family owned businesses were broken up or sold at fire-sale prices to meet the IRS demands and it would have been worse without Buffett's activities. Until then he was a non-philosophical businessman taking the world as he found it; afterwards he was explicitly a looter.

Now he may have already had the looter philosophy in place prior to his political activities but I had withheld judgement because I didn't know that for a fact. Just like a college student who might take government loans is not necessarily morally suspect whereas one who lobbies for their expansion is.

C. Andrew

Gus Van Horn said...

And, as if there were any reason to still grant him the benefit of the doubt after that (or, like me, you missed that bit of news), his "giving pledge" should eradicate that.