Another reason to hate Buffett
ALAN MAASS' article "Philanthrobbery" was useful and eye-opening. I just wanted to add one example that I find particularly infuriating about all the hoopla about the "Giving Pledge."
Warren Buffett may be congratulating himself for all the good press he is getting for the gesture--but this has to be seen in the context of what's been called the "single worst day of Buffett's life," from a p.r. standpoint, which happened just back in June when he had to testify in front of Congress about his association with the ratings agency Moody's.
Buffett's gigantic investment company, Berkshire Hathaway, is the single-largest shareholder in Moody's, which, along with the other ratings agencies, played a key role in enabling the Great Recession. They are the ones who gave assurances that the toxic investments devised by the investment banks were safe. Lehman Brothers, Goldman Sachs and the rest of the gang couldn't have sowed the wholesale destruction that they did without the assistance of the ratings agencies.
Grilled about Moody's by the Financial Crisis Inquiry Commission, Buffett argued that the ratings agencies weren't to blame, because everybody was fooled by the housing bubble--"Look at me. I was wrong on it too"--as if the whole job of the ratings agencies wasn't supposed to be that they did their homework and weren't fooled when everyone else was.
But Buffett went further, rejecting the idea that Moody's should even have new management. Having directly profited by investments in a company that played a major part in touching off the worst financial crisis since the Great Depression, Buffett defended the status quo.
This was too much for even the financial commentators, who normally fawn over every word Buffett says (his nickname, after all, is the "Sage of Omaha"). "The same Buffett who profits from the duopoly status of the top ratings agencies also profits from the mistakes allowed to fester under our anti-competitive system," wrote the head editor for business network CNBC. "Perhaps we should think twice before anointing him our oracle when it comes to ratings agency reform."
Even Charlie Gasparino on Fox Business said that Buffett was "defending the most corrupt business model in corporate America." (CNBC had a round-up of the reactions.)
Anybody who's lost a job or taken a pay cut or seen their community blighted in the current crisis can, in part, thank Warren Buffett and his investment strategy.
No matter how much he "gives back," it will never be as much as he has taken away. He's not a role-model. He's a con man relentlessly looking for new hustles, no matter what the cost to society. His "Giving Pledge" is just another con.
Ben Davis, New York
