The Fool of Omaha

by Henry Payne

Warren Buffett is hailed as the Oracle of Omaha for shrewd investments that have made him a billionaire. Count me among the unimpressed

If this guy knows a good investment, then how come he is urging Americans to put their money into the worst investment in America: the recently-downgraded federal government?

“For those making more than $1 million,” writes the Oracle in the New York Times, “I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more, I would suggest an additional increase in rate.”

But why? That “investment” will go down a rat-hole of green favoritism, waste, and runaway entitlement spending.

He doesn’t need go any further for evidence than the pages of the newspaper in which his column appeared. “Federal and state efforts to stimulate creation of green jobs have largely failed, government records show,” reports the liberal daily, belatedly acknowledging what other news outlets have been reporting for months.

Doesn’t the Oracle do investment research?

If he did, he would learn that government “investments” in green Michigan firms like Evergreen Solar and Energy Conversion Devices and Fisher Coachworks have all gone belly up because there is no market for their goods.

Doesn’t the Oracle read research by economists?

“Over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending. Politicians spend the money as fast as it comes in-and a little bit more,” found Ohio University economist Richard Vedder.

Okay, national defense is a sound federal investment – largely because Washington is competing in a government market. Otherwise, Washington is a lousy investment of our dollars. For example, Washington has spent billions in Detroit since the 1960s, and in doing so has created worse social pathologies, and left the city poorer than before. Indeed, by keeping their wealth in Detroit instead of flushing it down the D.C. toilet, “wealthy” (I prefer “successful”) Michigan entrepreneurs like Mike Ilitch and Roger Penske and Dan Gilbert make far smarter charitable and economic investment decisions based on conditions on the ground, thus benefiting local communities.

Mr. Buffett isn’t advising sound investment. He’s advising political correctness.

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