Upon clinching the 1958 World Series with a win over the Milwaukee Braves, New York Yankees manager Casey Stengel made, perhaps, the greatest understatement of all time. "I'm very proud of the players and they should be congratulated," the legendary skipper said. "I realize I couldn't have done it without the players."
Stengel passed away in 1975, when Warren Buffett's net worth was still measured in millions, rather than billions. Nonetheless, Buffett apparently stole a page or two from Stengel's playbook before "The Old Professor" doffed his cap for the final time. The page Buffett ripped away was entitled "How to State the Obvious".
The Only Thing To Fear
On CNBC recently, the Berkshire Hathaway (NYSE:BRK-A, BRK-B) Chairman and CEO noted that fear is dominating Americans' behavior and that the economy has "fallen off a cliff". I suppose I should be thankful that Mr. Buffett didn't take the politically correct route; he could have said that the economy has tumbled down a steep precipice instead. Still, when he invoked patriotism as a reason to end the "partisan bickering" and support President Barack Obama's spending bills... well, there's only so much silliness I can take.
Look, I like Buffett. Contrary to popular belief, I don't think all rich people are greedy, conniving fiends - especially not the Oracle of Omaha, who continues to live in the same modest house he purchased for $31,500 over 50 years ago. But isn't it a little disingenuous to reduce the dissent over the greatest expenditure of public money in recorded history to "partisan bickering"?
Where's The Beef?
After all, a new Rasmussen Reports telephone survey asserts that, when "given the choice between federal bailouts for the auto companies, the finance industry and financially trouble [sic] homeowners, or no bailouts for any of them, 54% say no bailouts, period."
Although more Democrats, like Buffett, favor economic action than Republicans or those unaffiliated with either of the major political parties, the number who approve of all three bailouts is shockingly low - just 26%, according to the Rasmussen study.
Hence, is it any wonder why so many Americans are anxious? As Clara Peller used to say, "Where's the beef?" People remain skeptical that spending money will alleviate the U.S. economic crisis.
Remember, it was just this past September that then-President George W. Bush warned of a "long and painful recession" if Congress failed to pass the Emergency Economic Stabilization Act of 2008, which was designed to quell the turbulent markets in the wake of the failures or near-failures of IndyMac (OTC:IDMCQ), Fannie Mae (NYSE:FNM), Freddie Mac (NYSE:FRE), American International Group (NYSE:AIG) and Merrill Lynch. Following some "partisan bickering", Congress acquiesced and ratified the economy-saving measure on October 3. Since then, however, the Dow Jones Industrial Average and the Nasdaq Composite Index both have plummeted more than 33%.
A Hand Out, Not A Hand Up
What's worse, the munificence of the federal government in recent months appears to have spawned a mass outbreak of itchy palms, as businesses and entire industries anxiously await their chance to spin Washington's Wheel of Fortune. In January, "Hustler" magazine publisher Larry Flynt and Joe Francis, producer of the "Girls Gone Wild" video series, announced that they had petitioned various government officials for $5 billion, an amount equal to the revenue lost in the U.S. adult entertainment industry over the past three years. This request bothers me, as I worry that it could result in another movie starring Courtney Love.
Bailout Bucks For Berkshire?
Buffett hasn't exactly been playing the protagonist of a Horatio Alger novel these days either. While he's not on a street corner asking for handouts, he sure has been busy sounding the clarion call for bailout bucks, which is not that surprising, given the recent performance of his company.
Berkshire's net income for the fourth quarter of 2008 totaled $117 million, or earnings per share of $76, down a whopping 96% from the $2.95 billion, or $1,904 per share, the company reported for the same three-month period last year.
With investments in more than 60 companies, including many in the battered financial sector, Berkshire Hathaway clearly will benefit from the ongoing legislative lottery. But at what cost to the American people? Or to economic freedom?