Warren Buffett’s $5 billion investment in struggling Bank of America is the latest iteration of a business philosophy that you might call dollar patriotism. Earlier this month, in an op-ed column in The New York Times, Buffett urged Washington in this period of “shared sacrifice” to stop coddling the rich, raise taxes on millionaires, and jack them up even higher for the mega-rich (anyone pulling in more than $10 million a year). And now he is bucking up BofA and Wall Street and the country much as he did in the darkest days of the financial crisis.
Buffett’s views on taxes are not universally shared by those Americans swimming in lap pools of wealth. Charles G. Koch, CEO of Koch Industries, who has been a supporter of right-wing causes and the Tea Party movement, allowed in response to Buffett’s take-my-money- please plea that "Much of what the government spends money on does more harm than good; this is particularly true over the past several years with the massive uncontrolled increase in government spending. I believe my business and non-profit investments are much more beneficial to societal well-being than sending more money to Washington."
And former American Express CEO and AIG Chairman Harvey Golub wrote in Monday’s Wall Street Journal: "Governments have an obligation to spend our tax money on programs that work. They fail at this fundamental task. Do we really need dozens of retraining programs with no measure of performance or results? Do we really need to spend money on solar panels, windmills and battery-operated cars when we have ample energy supplies in this country? Do we really need all the regulations that put an estimated $2 trillion burden on our economy by raising the price of things we buy? Do we really need subsidies for domestic sugar farmers and ethanol producers? … Do we really need an energy department or an education department at all?
“As has been said for many years what America needs is a fairer, flatter, simpler tax code. The current system inhibits growth, chases jobs out of the country and keeps America from being all it can be. If Mr. Buffett would like to pay more into the United States Treasury—rather than sheltering it in nonprofit foundations and charitable projects—he is free to do so.”
The BofA move isn’t the first time Buffett has been a rescue investor. In the fall of 2008, at the height of financial crisis, he pumped $5 billion (he must like that number) into Goldman Sachs to buttress the investment bank and $3 billion into General Electric. That helped build confidence in Wall Street and America at a time of extreme crisis. According to the Times’ Dealbook, Buffett was rewarded with full repayment by Goldman and a $1.7 billion return on his investment. GE CEO Jeff Immelt has said Buffett will be repaid.
The Oracle of Omaha isn’t the Turkey of Omaha. Behind the carefully cultivated avuncular and folksy image is a shrewd investor who cut a close lieutenant and possible successor, David Sokol, off at the knees when his inexplicable avarice threatened the Buffett franchise. Surely Buffett sees promise in BofA under the (relatively) new leadership of Brian Moynihan. But he also certainly realizes that his BofA investment will help calm jitters on Wall Street as the economy teeters on the edge of a double dip.
Moynihan succeeded Ken Lewis, whose duplicity during the weekend of Sept. 12-14, 2008, is laid out in Maria Bartiromo’s book about the financial crisis, The Weekend That Changed Wall Street. If Buffett saw his investment in Goldman as a way to make a buck and help the country (not to mention the global financial system), Lewis’s short-sighted decision to abandon a Lehman rescue and snap up Merrill Lynch was the diametric opposite of dollar patriotism. Lewis, whose $4 billion purchase of Countrywide and hurried acquisition of Merrill helped lead to the woes that BofA has been grappling with, was rewarded with a boot out the door.
Buffett isn’t George Washington or Sergeant York. But he is a patriot who takes the long view and recognizes that what’s good for the country is good for Berkshire Hathaway and his wallet. His position on taxes and crucial investments at critical moments are an example for off-shoring, corporate-tax-dodging, shortsighted executives who like to wave the flag but then drop it in the dirt at the first chance to make a qui