Quote of the Week

Six months ago, Warren Buffett penned an op-ed in the New York Times talking about his apparently unquenchable desire to pay more in taxes--as long as everyone else in his income category was legally bound to do the same, of course. I was skeptical of Buffett's supposed altruism at the time, and I still am. I wrote then:

There's no law prohibiting you from opening your checkbook tomorrow, grabbing a pen, and writing a $1 billion check to the U.S. Treasury. If you really want to pay more in taxes, don't sit around waiting for the government to send you a bill--just send the damn check. 

Otherwise, it seems like for all your seemingly well-intentioned rhetoric, what you really want is for others to share in your "sacrifice". Your pleas seem genuine and heartfelt, but at the end of the day you know that you could very easily cut a check tomorrow and not bother to tell anyone about it. But that's not what you want. You want all the publicity, and to make a political statement, but you don't want to actually step up and pay more in taxes unless and until every other billionaire in the country is legally obligated to do the same. That's not heroic--that's cowardly. And that's why I don't buy into your hype. The real Warren Buffett wouldn't wait around for others to show him the way forward.

Now, New Jersey Governor Chris Christie has jumped on the Buffett-bashing bandwagon (it's fun, isn't it, Chris?), saying largely the same thing that I said then. For his comments, Gov. Christie has earned this week's Quote of the Week honors.

This week's QUOTE OF THE WEEK

"[Buffett] should just write a check and shut up. I'm tired of hearing about it. If he wants to give the government more money, he's got the ability to write a check -- go ahead and write it."
                          - New Jersey Governor Chris Christie
               
Ultimately, people everywhere in this country are extremely good at spending other people's money--or at least lobbying to spend other people's money. I've been a bit amused this week with the local goings-on at UVA, where a group of students is staging a hunger strike as a way of demanding a "living wage" for all university employees.

That's fine and all, and it's in many ways a noble goal, but the reality is that a living wage for all employees will of course require an increase in tuition and fees (for all students, undergraduate or otherwise) or a decrease in salaries and wages for higher-paid faculty members. So if the students really want the employees to have a living wage, they could (and should) start by footing part of the bill themselves. Their next step could be to actually physically raise the money by asking other students to do the same, and asking faculty members to similarly contribute--a true, grassroots movement that requires (and receives) the input and buy-in of an entire community.

But instead, the students would prefer to simply lobby the university's gatekeepers, and hope that those gatekeepers will agree to then impose an increased cost on all community members, regardless of their position on the subject. That's of course a microcosm of what happens in Washington D.C. every day, and it's this type of culture that has led us to have such a wickedly indebted society.

If you want to pay more in taxes, go ahead, pay more in taxes. If you want university employees to make more money, raise some money and pay them. Either way, if you're going to ask other people to foot the bill for your latest pet project, ask them directly, not via some third party intermediary. Then maybe you'll have a better understanding of what your project actually costs, and how much you're asking your friends and colleagues to contribute. Separating the beneficiaries of a policy from those who will feel that policy's cost almost always leads to bad overall decision-making. Raise the money first, then spend it--not the other way around.

[CNN Money]

Dear Warren Buffett: Put up or shut up

To many in the world of finance, Warren Buffett has taken on a somewhat mythical status, held up as a godlike patron saint of value investing. While I recognize and appreciate the man's savant-ish ability to recite line items on corporate balance sheets, I don't buy into the Buffett worship, at least not any more.

At one point in time, Buffett was--deservedly--the undisputed king of the investing world, and he became a very rich man because of it. But somewhere along the line (realistically, during the financial crisis of 2008-2009), Buffett abandoned his independent maverick-like tendencies and morphed into a strange type of company man, shilling on behalf of big banks and the big government programs that supported them. Beginning with his assistance in structuring the original bank bailout packages, Buffett has begun to throw his political weight around, most recently with this op-ed in Sunday's New York Times.

Our leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

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.

To be clear, Buffett is not the only high-profile executive to make this "raise my taxes" plea--he is joined by Netflix' Reed Hastings and Microsoft's Bill Gates, among others.

But to me, regardless of the logic behind his argument (I happen to think there are some logical flaws, but that's not my focus here) making this plea in such a public fashion rings hollow--as usual, actions speak much louder than words. Warren, you of all people should know that when you really believe in something, you should put your money where your mouth is. There's no law prohibiting you from opening your checkbook tomorrow, grabbing a pen, and writing a $1 billion check to the U.S. Treasury. If you really want to pay more in taxes, don't sit around waiting for the government to send you a bill--just send the damn check.

Otherwise, it seems like for all your seemingly well-intentioned rhetoric, what you really want is for others to share in your "sacrifice". Your pleas seem genuine and heartfelt, but at the end of the day you know that you could very easily cut a check tomorrow and not bother to tell anyone about it. But that's not what you want. You want all the publicity, and to make a political statement, but you don't want to actually step up and pay more in taxes unless and until every other billionaire in the country is legally obligated to do the same. That's not heroic--that's cowardly. And that's why I don't buy into your hype. The real Warren Buffett wouldn't wait around for others to show him the way forward.

[NY Times]