Free Markets, Free People


Warren Buffet – Bank Levy Makes No Sense

Barack Obama was quite fond of quoting Buffet during the campaign. My guess is he’ll not be as willing to quote Buffet about his opposition to the President’s proposed bank tax:

“I don’t see any reason why they should be paying a special tax,” said Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., in an interview on Bloomberg Television today. Supporters of the plan to tax the banks “are trying to punish people,” he said. “I don’t see the rationale for it.”

What he’s talking about, of course, is the tax Obama has proposed ostensibly to recover the losses incurred in the TARP program. Obama has targeted about 50 banks to make this repayment.

The levy would apply to firms with more than $50 billion in assets, including Wells Fargo and Goldman Sachs, two companies that Berkshire has investments in. It would exclude Fannie Mae and Freddie Mac, the government-sponsored mortgage lenders taken over by the U.S.

Look at the damage Fannie and Freddie caused, and they were run by the Congress,” said Buffett. “Should they have a special tax on congressmen because they let this thing happen to Freddie and Fannie? I don’t think so.”

Of course Buffet throws out a point, which I’ve put it bold, that the administration, Democrats in general and the media have studiously avoided. That’s the role that the two quasi-governmental organizations, Freddie Mac and Fannie Mae, played in the financial meltdown (and how much of the TARP money they sucked down). In fact, the tax is as much about recovering the money they required as anything. But pointing that out would be detrimental to the narrative the administration has been building about the “greed of Wall Street” and their unilateral culpability. According to Bloomberg data, Freddie and Fanny owe about $110 billion. Buffet, of course, is not so easily fooled:

The levy would apply to firms with more than $50 billion in assets, including Wells Fargo and Goldman Sachs, two companies that Berkshire has investments in. It would exclude Fannie Mae and Freddie Mac, the government-sponsored mortgage lenders taken over by the U.S.

“Most of the banks didn’t need to be saved,” Buffett said. “Including Wells Fargo.”

The bank tax would raise $90 billion over 10 years and, of course, be paid for by the banks customers. Also note that the sum of $90 billion is very close to the amount owed by Freddie and Fanny.

Obama is correct – “we want out money back”. But we want it back from the institutions which wasted it. Of course that’s impossible since taxing Freddie and Fanny is taxing ourselves. Of course, so is taxing banks. However, it is much more useful to demonize them, play the greed card and pretend the government is blameless than to tell the truth, isn’t it?

I mean, if they told the truth, they’d have to implicate Congressional Democrats like Barney Frank, wouldn’t they – and that would never do.

~McQ

  • Facebook
  • Twitter
  • LinkedIn
  • Tumblr
  • Digg
  • Reddit
  • email
  • Print
  • Google Bookmarks

8 Responses to Warren Buffet – Bank Levy Makes No Sense

  • ” REAL ESTATE FRESH START AMERICA PROGRAM”

    1.  Home owners that are upside down and either out of work or not making enough money can meet with their bank that have set up a program to deal with this problem.

    2.  After the home owner meets with the Bank and meets the Banks guide lines for this program the bank shall immediately lower the home owners monthly payment to accommodate the home owner’s financial needs to ensure that the property is not foreclosed on.

    Bank/Lending Institution Guide Lines For;

    “REAL ESTATE FRESH START AMERICA PROGRAM”

    1. Home Owner will bring in all of his monthly expenses and income and it will be verified by the bank and if the expenses make it impossible for the monthly payment to be made then the band shall immediately lower the home owners payment and no matter what kind of payment back ground that this home owner had the bank will erase bad ratings on this Customers credit report and start over with new credit ratings from this day forth.

    (this will do two things; give the home owner the incentive to keep his home and give the home and give the home owner the opportunity to start rebuilding his credit line immediately this will also give the homeowner pride that is badly needed in their lives and in addition rebuild the economy)

    2. The Bank will send out their appraiser to appraise the property for the current value and this will be part of the new monthly payment schedule that the bank sets up with the Customer.
    The Bank will use the same appraiser that they use to refinance properties and the Appraiser is NOT to know that this appraisal is going to be used for this program.
    (for obvious reasons, not to deviate from actual current value, this will have to be monitored by the government to keep the banks honest)

    3. The new lower payment will remain the same until the home owners income increases and the value of their home increases as well.  (will have to be closely monitored)
    After the Customers income increases the bank will raise the payment slightly by a small percentage this shall be done on a yearly basis, and include a new appraisal of the home.

    4. This Program will stay in effect until either the Property and Homeowners Income increase to the original appraisal or until the term of this contract to be determined by the banks/government monitoring this program. (could be a 5 year program)

    Banks Responsibility, Government Responsibility, & Home Owners Responsibility;

    1. Banks Responsibility is to monitor property condition and monitor Customers Income on a yearly basis and can be verified by income tax records.

    2. Home Owners Responsibility is to maintain the home and must do so to stay in this program. If the Home Owner defaults on their responsibility they get a 60 day written notice from the bank to fix the problem and if not they loose their FRESH START and their regular monthly payments they were making before this program go back into effect immediately.

    3. Our Government’s Responsibility is to keep everyone honest that are enrolled in Our “Fresh Start Program”   (sorry folks but we need our government to help us. Try Looking at them as a Ref-ere)

    THE BENEFIT FROM THIS PROGRAM ;

    1. Slow down, Stop Bank Foreclosures NOW ! !

    2. Restore Housing and Americans Confidence and give the Home Owner A FRESH START to restore their credit, which will increase lending and help to restore Our Economy.

    3. Let  Americans know that our Government is in our corner to help all of us.

    Any Plan that any of us come up with, can ONLY work with TEAM WORK & Ameri- Can Do Attitude ! !     “UNITED WE STAND”

    Thank You, Respectfully, Michael V. Caldwell

    • ….his will have to be monitored by the government to keep the banks honest….
      Dare’s sumfink rong wif iss boyz circuit board.

       

  • <snark>
    … but you see this is false equivalency on the part of Warren Buffett.
    Fannie Mae and Freddie Mac were products of the “evil Bush”.  He produced them without ever letting Congress know and then packed them with his cronies.  The Democrats screamed, yelled and gnashed teeth the moment the found out about them.
    </snark>

  • ….note that the sum of $90 billion is very close to the amount owed by Freddie and Fanny….

    Not even close.

    Remember the “Rule of 8″, where everything the gov’t spends costs 8 times as much as predicted or claimed.

     

  • How’s that hope and change taste now, Mr. Buffet?

michael kors outlet michael kors handbags outlet michael kors factory outlet