Like “National Hamburger Day,” Saturday could have been called “Warren Buffett Weekend.” It’s when Mr. Buffett holds his annual Berkshire Hathaway shareholders meeting in his hometown of Omaha, during which he discusses the state of the U.S. economy. But the pre-meeting interviews with Buffett by the media indicate how he views our economy as flat as an A-cup bra.
Buffett’s got a poker tell – a little giggle when he has to talk about bad news. Flat economy – giggle. Employment rates – giggle.
Why is he nervous? Could it be due to how his now-ex-friend, President Barack Obama, has mishandled the economy?
Buffett and Obama were friends for many years – they first met sometime around 2005 when he was a newly-elected U.S. Senator. In August 2007, Buffett and his family hosted a major fundraiser for Obama’s nascent presidential campaign, where Buffett declared it was lonely to be a Democrat in Nebraska.
Similarly, Buffett attended fundraisers for President Obama’s re-election campaign. Obama would cite Buffett as his source of economic advice. It was the president’s way to reassure the citizenry (in the run-up to the 2012 election) that he was being business-friendly, and was working really, really hard to lift America from the Great Recession.
The bromance ended when, in 2014, Buffett purchased a Canadian donut chain, Tim Horton’s, merged it with already-owned fast food chain Burger King (headquartered in Miami), and moved the new donut-cum-burger firm’s headquarters to Canada.
The merger raised an issue we’ve been hearing a lot about lately: tax inversion.
A quick political guide: Democrats think firms moving headquarters offshore to avoid high U.S. taxes are economic Benedict Arnolds and should pay their “fair share.” Republicans say our tax system is a mess and needs to be fixed in order to keep American businesses in America.
In Buffett’s case, it was a no-brainer: combined U.S. and state corporate taxes result in a 40 percent rate – the highest in the developed world. Our clever neighbors to the north have lower corporate taxes, plus they generally don’t tax profits made overseas (if taxes have already been paid in the country where the profits were made).
Now, in April 2016, we see Buffett reacting to the flat economy situation with his giggle-tell. He knows his former pal – President Obama – has failed spectacularly at restoring the American economy and that’s why our economy has flatlined.
Buffett knows the president vetoed the Keystone Pipeline – and the jobs that would have arisen from it. He knows how his firms have had to struggle with Obama’s thousands of new environmental regulations.
What I hear in Buffett’s giggle is shame for having supported a politician who used him as a prop, and went on to keep our nation’s economy floating like a dead fish in a pond.
No doubt Buffett’s shareholders will be happy regarding their holdings in Buffett’s Berkshire Hathaway stock. But they, with Buffett, will examine the wider state of the American economy on Saturday.
After hearing the bad news, I expect the stockholders rushed to the See’s Candies stand (a BH company) at the back of the meeting hall to fill their tote bags with soothing goodies for our unstable times.
No worries there — I can vouch for the high comfort factor in See’s butterscotch lollipops.
Photo by Medill DC
Joanne Butler was a professional staff member at the US House Ways & Means Committee; issues included trade and Social Security. In the Bush Administration's Labor Department, she was a senior advisor to an assistant secretary, handling a wide range of issues from speechwriting to program quality control. She has a graduate degree from the Kennedy School at Harvard University, with a concentration in economics and international finance.