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Warren Buffett is as close to untouchable as public figures get in the United States. The second richest man in the world, after his friend Bill Gates, he is grandfatherly, rational and decent — the Jimmy Stewart of capitalism.
He invests in firms everyone understands, like Coca-Cola, Gillette and American Express. He lives in the same, modest home in Omaha, Nebraska, he has occupied for over 40 years. The New York Times recently called him America's “reassurer-in-chief” because of his bullishness about its long-term economic prospects.
But even Buffett's good name is now under attack. He may be 78 and have promised to give his fortune, worth some $40 billion, to Gates's charitable foundation, but he is now under suspicion as one of the evil super-rich.
The case against him begins with his 20% holding in Moody's, the rating agency which failed to apply proper risk assessments to toxic debt, worsening the economic crisis. Moody's applied investment-grade ratings to Lehman Brothers and AIG days before they imploded. Yet Buffett has made no apology for Moody's failings.
He has been a supporter and adviser to President Obama, and argued publicly for the government's bank bailouts — from which he has benefited immensely. His firm Berkshire Hathaway owns stock worth more than $13 billion in leading recipients of bailout cash such as Goldman Sachs, Wells Fargo and American Express.
Simon Johnson, an MIT professor and former chief economist at the IMF, wrote this week: “There's this general presumption that Wall Street knows best. But they may not know what is best for the taxpayer. We've gotten into the habit of deferring to them a little too much — including Warren Buffett.”
* To learn what New York is thinking, ask Donald Trump. He is furious about planned tax increases on the rich. “Rich people are going to leave this state — why should they pay New York taxes on money made out of state?” he told the New York Post. “Everyone is going to move to Palm Beach, the nicest place in the world, where there's no income tax!”
* A decline in visitors has led to 100 job cuts at the Bronx Zoo and Coney Island Aquarium. No species is spared by this recession.
