Warren Buffet: Socialist Dragoon
By Thomas E. Brewton
Mr. Buffet, an investment genius, is representative of the businessmen who make fortunes within the individualistic framework of capitalism, but are powerfully attracted to the collectivism of the socialistic welfare-state. Like the heavily-armed cavalry dragoon, Mr. Buffet has employed his wealth to harass and pressure – to dragoon – for adoption of crippling economic policies that would push the nation back toward the economic and social disaster of President Lyndon Johnson’s Great Society.
This orientation is less a contradiction than one would expect. Big business historically has preferred regulation by big government as a counter-weight to competition.
Legendary investment manager Warren Buffet has been much in the news because of his multi-billion dollar bequest to the private foundation of fellow billionaire Bill Gates. From one viewpoint, Mr. Buffet is to be commended for his charity. From another, one has to fear the direction and intent of his action.
Because Mr. Gates’s charitable activities have largely been focused upon benefitting third-world countries, it’s not clear what his political leanings are. If he employs Mr. Buffet’s billions in such pursuits, we can hope that little mischief will result in the United States. But the precedent set by other foundations created by great private fortunes – the Ford Foundation most notoriously – is worrisome.
Mr. Buffet’s cohort of socialists who made fortunes within the capitalistic system include George Soros, Jon Corzine, and Robert Rubin. Mr. Soros, like Mr Buffet an investment genius, is said to have spent more than $20 million to support the candidacy of radical left-winger John Kerry and other welfare-state advocates. Messrs. Corzine and Rubin made their millions at the investment banking firm of Goldman Sachs. Mr. Corzine spent several million dollars of his fortune to become a liberal United States Senator from New Jersey and is now that state’s higher-tax-advocate governor. Mr. Rubin, a traditional New York City welfare-state lover, served as President Clinton’s Secretary of the Treasury and is now one of the senior officials of Citicorp, the giant banking group. Mr. Rubin recently has authored high-tax-policy studies for the anticipated liberal-socialist election victories in November.
What characterizes such men is advocacy of a more powerful National State and more rigorous and extensive regulation of all aspects of our business and personal lives, financed by higher taxes. The end point is more equal distribution of wealth orchestrated by the National State, a policy unaccountably rationalized by people like Mr. Buffet as meritocracy.
Mr. Soros has been an outspoken advocate of socialism and has denounced the United States as an imperialistic aggressor. Mr. Buffet, enlisted as economic advisor to Arnold Schwartzenneger in the latter’s campaign for the California governorship, had to be dismissed, because he declared that taxes in California and everywhere else should be raised.
More recently, Mr. Buffet declared his support for retaining the full-bore inheritance tax. Ironically, his transfer of about 80% of his wealth to the Gates Foundation will shelter it from the inheritance taxes he advocates for others.
The contradiction between the world of business and the politics of collectivism is, however, more apparent than real. Historically, big business has had a natural affinity for big government. In the 1920s and 1930s, this was known as state corporatism, a central aspect of Fascism in Benito Mussolini’s Italy, National Socialism in Adolph Hitler’s Germany, and the New Deal in Franklin Roosevelt’s administration.
There has always been a tension between the individualism of free-market competition and the tendency of corporations to grow bigger. Adam Smith, in his 1776 “Wealth of Nations,” remarks that, if six businessmen get together, they will conspire to fix prices.
With the emergence of our own giant, interstate railroads, mining companies, steels mills, and oil refiners in the Gilded Age after the Civil War came the first of the great personal fortunes. Andrew Carnegie and John D. Rockefeller established the public philanthropy model for Bill Gates and Warren Buffet. Big Daddy feels comfortable with the Great White Father in Washington, both ostentatiously dispensing goodies to the masses.
A negative side of corporate growth was the push toward greater Federal regulation of trade and the imposition of protective tariffs. Big corporations operating in many different states wanted a single set of Federal regulations, rather than dozens of different state regulations.
It also became apparent that compliance with extensive Federal regulation, while expensive, was a big deterrent to the challenge of smaller competitors that lacked the giants’ net worth and access to Wall Street.
Thus, when Franklin Roosevelt assumed the Presidency in 1933, big businessmen like the heads of General Electric were active supporters of his corporatist regulation of the economy.
When socialist industrial unions reared their heads in the New Deal, big business took the path of least resistance, acceding to Federal pressure to raise the pay and benefits of unskilled workers.
Before the present era, the United States continued to prosper, despite the back-scratching relationship between big government and big business. Today, however, foreign economic competitors have spoiled the game. Unburdened by the massive inflation of wages and prices engineered by the New Deal and successor regimes, foreign companies’ lower-price competition has eviscerated our corporations that once were the largest in the world.
The truly strange aspect to the knee-jerk liberalism of businessmen like Warren Buffet is that they can’t see the connection between high taxes, big government regulation, and the economic downfall of the United States.
Thomas E. Brewton is a staff writer for the New Media Alliance, Inc. The New Media Alliance is a non-profit (501c3) national coalition of writers, journalists and grass-roots media outlets.
His weblog is THE VIEW FROM 1776
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