|The 'Warren Buffett is a hypocrite school of journalism' has yet to produce a Pulitzer, but reams of copy? Well, no end to it.|
NEW YORK ( TheStreet) -- The Huffington Post is out with another in the long series of non- Pulitzer Prize-winning accounts of how, where and why Berkshire Hathaway ( BRK.B) chairman Warren
Buffett is a hypocrite on Tuesday. I would say this cottage industry within journalism had jumped the shark if jumping the shark hadn't jumped the shark long ago, and if I wasn't as guilty as the rest of being a card-carrying member of this non-exclusive group of Buffett lapdogs in print and news-aggregated pixel. Reading the HuffPo headline about the results of an investigation that showed Buffett's NetJets subsidiary was lobbying K Street to preserve luxury jet tax breaks while Buffett has called for higher taxes on the rich sent me back to my freshman days at the University of Michigan.
Bear with me: I arrived in Ann Arbor as the former president of my high school's Model Congress (i.e. no girlfriend during those awkward years), and as a "model" Majority Speaker I had sponsored legislation to return the United States to its rightful owners -- the tribal nations -- and to use Congressional funds to sponsor just about every socialist rebel army around the globe. Then I was hit over the head with the dawning of political correctness on campus in the early 90s and as a visceral reaction to the overwhelming liberalness, I became a knee-jerk conservative. So I'm cutting my Warren Buffett is a Hypocrite Club card today and testifying against my former crew and changing parties. It's time to call an end to these headlines, and I hereby promise this to be my last shameless attempt to turn Buffett is a Hypocrite into page-views (though using Buffett to generate page views remains an eminently acceptable, shameless tactic for the world of online journalism.) This NetJets one I really don't get, but then again, it's part and parcel of the Buffett is a Hypocrite headlines versus the details and realities of running a huge conglomerate and also being a media hound with overt political aims. >>View Warren Buffett's Portfolio Buffett has said that as a member of the elite he is not paying enough in taxes, and that the wealthy should do their fair share to pay taxes to the Internal Revenue Service. NetJets, a subsidiary of Berkshire Hathaway, lobbied in Washington D.C. to preserve tax breaks important to its business. So the CEO of a corporation using his pulpit to take a personal political stand about personal income tax issue and shine a light on his personal wealth, also has affiliates doing everything in their power to preserve a preferred tax status for the corporation. Should Buffett be as vocal about corporate tax reform as he is about personal income tax reform -- especially since President Obama has called out the private jet class specifically? Sure, why not? There is no end to the hypocrisy of which Buffett is guilty if we want to see it as such.
Buffett calls derivatives weapons of mass destruction while also holding a portfolio of derivatives. Buffett even sent his former top lieutenant David Sokol -- himself a sign of Buffett's hypocrisy after the Lubrizol insider trading scandal of 2011 -- to Washington D.C. to lobby Congress as it was reforming derivatives laws in an attempt to preserve an derivatives accounting treatment beneficial to Berkshire Hathaway. Berkshire lost, and Buffett said in his recent annual letter that the company will be unwinding derivative positions. Buffett said after Sokol resigned that he would have nothing to say about the matter if asked and then ended up devoting a portion of his annual meeting to the issue when the public called his bluff, and Buffett ultimately said he was just trying to be nice to a guy who he could always
consign to hell tomorrow. Surprisingly, most of the financial press actually accepted this as a mea culpa. Buffett's MidAmerican Energy has one of the largest portfolios of wind energy in the U.S. and has started to buy solar projects, yet Buffett is also one of the largest owners of coal-fired power plants in the western U.S. Buffett never wants to pay a dividend but doesn't mind owning lots of stocks that pay his company dividends. Buffett recently praised Exxon Mobil ( XOM) as a great stock to own but doesn't want to own it (I think I was the only one bothering to call this hypocrisy, actually). Buffett said housing was back before it wasn't. In fact, Buffett told Congress that no one could know enough about the market to ever see the housing bubble coming, but on the other hand, he was sure he could see the housing recovery coming, when it wasn't (he did, on the other hand, say there would be no double-dip recession in the U.S. long ago, and he looks to be correct).
Buffett knew enough about the financial industry to vocally back Goldman Sachs ( GS) and its Abacus series of subprime investments when an SEC lawsuit for fraud threatened to sink the firm, but said he didn't know enough to offer what he thought was any worthwhile testimony to the congressional Financial Crisis Inquiry Commission about the financial meltdown. They had to
subpoena him. And speaking of NetJets, spartan Buffett who still lives in a humble Omaha ranch house and doesn't even have a flat screen television in his office -- wood paneling on the sides of that dinosaur for Pete's sake! -- loves flying in private jets, the one guilty pleasure to which he has confessed, which has now come full circle in the latest Buffett is a Hypocrite exhibit. Are we up to exhibit Z? We are beyond it. Is there anything else while we are keeping score? There's too much. Buffett invested in Chinese electric car maker BYD but drives a big ole American sedan. In the final analysis, there are only three Warren Buffett hypocrisies (hypocri?) worth noting, and from which all other Buffett hypocrisies flow: A man too much in love with his endlessly self-professed humble pie nature is also too much in love with the media as a message tool. A man this filthy rich -- third-richest in the world -- simply can't be any less objectionable than the rest of the billionaire class, no matter what he says. In fact, the fact that he can say what he says is simply a byproduct of the ridiculous wealth he has already amassed. A man that is the CEO of a vast capitalist empire with competing and complicated interests and many affiliates with managers who do not have to get each and every move approved by Buffett is bound to run into some superficial hypocrisy. So there you have it. And then let's call it a day, or year, or era of reporting on Warren Buffett's hypocrisy and get back to our lives and families. I rest my case, really. I mean it. If only I did. -- Written by Eric Rosenbaum from New York. >To contact the writer of this article, click here: Eric Rosenbaum. >To follow the writer on Twitter, go to Eric Rosenbaum. Follow TheStreet on Twitter and become a fan on Facebook.