tag:blogger.com,1999:blog-15755725.post4612116219191267124..comments2023-12-06T04:06:07.620-06:00Comments on One Nation Under God: Questions for Warren BuffettDon Dodsonhttp://www.blogger.com/profile/15773965410151116133noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-15755725.post-65815399953216400732012-11-29T14:43:13.238-06:002012-11-29T14:43:13.238-06:00The trouble with the private sector/ big business/...The trouble with the private sector/ big business/ "job creator" alternative to government, which has been the foundation of American economic theory since Reagan, is twofold:<br /><br />#1. When push comes to shove the "heroic" private sector and the financial sector in particular, socialize their losses and privatize their gains. This was never so blatant as in 2008-9 when the Bush budget (which dictated economic policies until the end of fiscal 2009) earmarked $700 billion to be distributed to bad gambles by Banks that were "too big to fail" with little of it going to the homeowners they had bankrupted with their shell game. TARP and the stimulus bill were brain children of a Republican Administration to clean up a very badly behaved and under-regulated financial sector. Fun fact: under Obama, only $475 billion of that has gone out thanks to Dodd-Frank. A large chunk of this Obama diverted to save the American auto industry. An industry Romney would have let die. <br /><br />And while we're on that topic: When he managed Bain Capital from 1985-1999 Romney was fabulously successful in generating high returns for Bain's investors. But he did so through heavy use of TAX-DEDUCTIBLE DEBT, usually to finance crazy dividends for the firm’s partners and investors. When some of the investments went bad, workers and creditors felt most of the pain while Romney and his chums kept off-shore banks in business. Romney privatized the gains and socialized the losses. That he calls himself a job creator is an insult to job creators everywhere.<br /><br />#2. In a recession, it is difficult for private business, especially small businessmen, who should be the engine of a healthy economy, to risk making big investments in infrastructure and R&D which will give them a competitive advantage. Even large businesses are keeping their money out of the economy for fear of another 2008 collapse. Apple's coffers exceeded $100 Billion in 2012, 2/3 of which is kept in offshore accounts. They have yet to bring it into the open market to stimulate the economy.<br /><br />This is when the government coffers (taxpayers money and money borrowed from China (1 trillion of which would be saved if the Bush tax cuts are rescinded)) are instrumental to grease the wheels of the economy - to invest in jobs and new technology and small business so that the economy can begin to grow again. And yes, sometimes the government is going to pick the wrong horse. But so does anyone trying to be on the forefront of emerging technology.<br /><br />Here is a statement I am sure you will find hard to believe: Under "fiscally conservative" Republican governments, spending historically rises at a much higher rate than under Democrat administrations. It is a myth that conservative governments bring smaller government and less spending. This is true in Canada as well. I am compiling this evidence in a paper which I would be happy to share with you. I must sound totally biased and probably am but I assure you, Canada is so envious of the U.S. having a statesman of Obama's calibre and character. I just wish all Americans could see it. <br /><br />I look forward to hearing from you and having a vigorous and stimulating debate.<br />All the best,<br />JohnJohnhttps://www.blogger.com/profile/02997748214344224168noreply@blogger.comtag:blogger.com,1999:blog-15755725.post-60205292830434838292012-11-29T14:42:53.934-06:002012-11-29T14:42:53.934-06:00Hi Don,
I'm confused by the idea that citizens...Hi Don,<br />I'm confused by the idea that citizens should not feel like it is an earned duty to pay taxes. Without government, there would be no roads or infrastructure, no small business incentives, no international diplomacy. I can't even pretend to know all the things our tax dollars go towards.<br /><br />I must confide I am Canadian. Wait! Don't delete! This is an opportunity to exchange ideas. I am interested in understanding how 49% of Americans seem to think so differently than myself. We are your neighbours and great admirers but there are issues we view quite differently. <br /><br />I agree that government is inefficient in its spending and often corrupted by many who claim to want to do "public service" but are really there to preserve their millions. These are valid complaints about a system which hinges on money and not ideals of individual excellence and collective compassion. We suffer from this same ailment in Canada.<br /><br />I would suggest that elected officials who take advantage of public coffers should be given similar jail sentences to crack dealers. Governments have a responsibility more sacred than the private sector to make good use of their shareholder's investment (ie. the people of America or Canada). <br /><br />Continued in next post:<br /><br />Johnhttps://www.blogger.com/profile/02997748214344224168noreply@blogger.comtag:blogger.com,1999:blog-15755725.post-22658366117306586772012-07-11T22:36:27.995-05:002012-07-11T22:36:27.995-05:00Grrrr... Got me riled up! Here's the secret ab...Grrrr... Got me riled up! Here's the secret about Mr. B: Berkshire Hathaway stock pays no dividends. Instead it accumulates the profits, growing in PRICE. Until you sell a share, there is NO TAX on any of it. No cap gains, no annual dividend taxes, etc. ALSO, much of WB's salary is in BRK stock or 'freebees', like private air travel and staying at luxury locations owned by...Berkshire Hathaway. His salary is peanuts becaus ehe spends essentially nothing -- it's all expense account, but he's worth BILLIONS.<br /><br /> Until he sells a few personal shares of Berkshire Hathaway, he pays nothing on his wealth. WHen he does sell, he pays only the cap gains rate of 15%. THAT is most of why he pays a lower rate than his secretary.<br /><br />He has lots of expensive MBA's, accountants and attorneys who have constructed his business to result in the lowest possible taxes for the business, his shareholders and Mr Buffett. It's also why his early shareholders love him. They bought at $5 or $10K a share and can live well by cashing in one share a year at $100K cap gains, and pay 15% caps gains tax minus deductions. Well engineered to avoid paying the gov much of anything. <br /><br />Sooo it's EASY for him to sound like he WANTS to pay more. HORSEPUCKY. If he did, he'd change how his business and stock are structured first, before pandering to the party in power. He was probably angling to replace Biden on the ticket this fall...Monsoon Matriarchhttps://www.blogger.com/profile/15476615206392489371noreply@blogger.com