Warren Buffett, Hypocrite?

[warfreak2]

If I plan to stab someone in the face next year, is that less reprehensible than planning to stab someone today?

Then, if I plan to save somebody's life next year, is that less noble than planning to save someone today?

[Otsog]

His sweetheart deals that people are questioned are not due to cronyism, they are solely due to reputation.

Is there any other person or business in the entire world who you can phone up and do a multi-billion dollar in 10 minutes?

[Vjklander]

The main thing I don't like about Buffett is that he supports keeping the estate tax because it helps fund the government.

Then he turned around and set up a trust so the vast majority of his wealth will go to the Bill and Melinda Gates foundation.  Certainly a worthy choice, but not exactly helping out government like he stated.

Good enough for the "little people" but not big wheels like he and Gates.

I agree 100%.  I have no problem with him avoiding taxes to the maximum extent possible, or giving his money to whomever he wants. But it is hypocrisy to say everyone else should be taxed more when he avoids paying any tax at all. If he doesn't think the government is a good steward of HIS money, why would he insist it would be a good steward of MY money???? 

[warfreak2]

You're jumping to a conclusion. Why do you think Warren Buffett doesn't consider the government a good steward of his own money? It's just that he thinks the Gates foundation is an even better one. But it would be impossible and ridiculous to pass a law mandating an inheritance tax paid to the Gates foundation.

Besides, anyone can make a donation to charity if they think that's better than giving it to the government, it's not like charities are exclusive rich-people-only clubs.

[foobar]

What about MMM. Is he scum because he and his wife could be making 200k per year and donating 100k to take care of african kids.  At 200 bucks per life ( I have seen a lot lower), MMM is killing 500 kids per year by living his selfish scum lifestyle:) Warren isn't a saint and some of his lifestyle stuff is overblown (sure he has a house in Omaha, he also has a half dozen ones elsewhere) but I haven't seen anything to suggest he is more or less hypocritcal than anyone else.  I don't believe in the mortgage deduction, ability to write off state taxes, child tax credit and a zillion other parts of the tax code. You can bet I take advantage of every single one of them when I file though.


Warren has in the past said he would rather compound the money and donate it later. You can debate if it is better to give 1 billion today or 5 billion in 15 years. There is no right answer to that. I am just glad it looks like most of the money is going to help people rather than buildings with his name on it.

The arguments for the estate tax are a lot more than just funding government. There is a lot of thought that having dynastic wealth is not beneficial for the countries (and the kids). 

My issue with the estate tax is that the rates are so high, there is a ton of work done in avoiding it (see all the trusts, life insurance, annuities, and so on) which isn't really productive work.   I would sort of being interested in seeing how the math would be changing it to an inheritance tax (i.e. the people receiving it pay) where it just all gets treated as capital gains (and if you feeling generous you allow the people to spread payments out over 5-10 years) but I am guessing that you would still see a zillion different attempts to work around it.
 

So the only way to not be a hypocrite is to give away everything right away and live in abject poverty?  Everyone else is basically selfish scum?

Again,

[Nords]

I love him so much, I almost broke my "index funds only" investment strategy to buy some BRK (maybe an A share or two).

If you buy "B" shares then you can get much better pricing on the put & call options!

That's a good analysis of Buffett's behavior.  He tries very hard to never criticize anyone in public, and he actually shies away from confrontation.  Schroeder goes into a lot more emotional details on her blog, although it's been dark for months:  http://aliceschroeder.com/ 

When Buffett announced that he was giving his shares to the Gates Foundation (spaced out over 20 years) people were sure that he was going to crash the share price by forcing the Foundation to liquidate so many shares in such a short time.  Gee, hasn't happened yet...

[danny9m]

Warren Buffett is a great investor and I have to tip my hat to him for his latest advice on investing his wife's inheritance invest in the S&P 500 with Vanguard and invest about 10% of the portfolio in short term bonds.  What great advice.

That being said he is a hypocrite like a lot of great folks.

He has perfected the art of not getting his hands dirty, but that doesn't mean his hands are not dirty.

Check out this article on Heinz, a company he just purchased.

http://online.wsj.com/news/articles/SB10001424052702303743604579352640635188268

CNBC interviews him and doesn't mention a peep about this.
When you are a multi billionare is it really necessary to close the plant in Idaho throwing all those folks out of work in a place they won't be able to get another job.

Is it really necessary to force middle managers to come to work on Saturday and fire a lot of good people who have served that company for decades. 

Warren made his billions so it is ok to raise taxes now that he has his.   

Don't know how he can get up in front of national TV and say he wants to do more deals like Heinz.

The answer is to own stocks or assets because this economy it is great for investors, not so great for workers.
Once people wake up to this they can stop crying about it and do something about it.
Invest my friend.

[matchewed]

Warren Buffett is a great investor and I have to tip my hat to him for his latest advice on investing his wife's inheritance invest in the S&P 500 with Vanguard and invest about 10% of the portfolio in short term bonds.  What great advice.

That being said he is a hypocrite like a lot of great folks.

He has perfected the art of not getting his hands dirty, but that doesn't mean his hands are not dirty.

Check out this article on Heinz, a company he just purchased.

http://online.wsj.com/news/articles/SB10001424052702303743604579352640635188268

CNBC interviews him and doesn't mention a peep about this.
When you are a multi billionare is it really necessary to close the plant in Idaho throwing all those folks out of work in a place they won't be able to get another job.

Is it really necessary to force middle managers to come to work on Saturday and fire a lot of good people who have served that company for decades. 

Warren made his billions so it is ok to raise taxes now that he has his.   

Don't know how he can get up in front of national TV and say he wants to do more deals like Heinz.

The answer is to own stocks or assets because this economy it is great for investors, not so great for workers.
Once people wake up to this they can stop crying about it and do something about it.
Invest my friend.

From my previous response; just insert your comments about Heinz in place of the previous person I responded to. -

For one the moody where he stamp crap investment as AAA.   I know he didn't personally approve it but dont tell me he doesn't know it.

You seriously think he knows the minutia of every company? It's just as valid to say that "he didn't personally approve of Coca Cola's Asian marketing strategy but don't tell me he doesn't know it." Which sounds equally ridiculous.

There isn't anything hypocritical in a Brazilian firm backed by Buffett buying a large enough stake in Heinz for them to make calls for efficiency.

From the article you linked -

In November, Heinz said it would close the Idaho plant in the first half of this year. It may have been a model factory, but it also was an example of the kind of dubious logistics that were costing Heinz money. Frozen enchiladas, for instance, were trucked nearly 1,000 miles from a factory in San Diego, packaged with rice and sauce by workers in Pocatello, then shipped across the country to distribution centers on the East Coast.

Unless of course you're defining hypocrisy differently.

Who cares if he didn't freely mention it? Do you freely mention everything you do to everyone?

[Eric]

If being a hypocrite is a minor criticism, I'd be scared to hear the accusation that would be considered major.

[Otsog]

Thank goodness WB has so many people coming to his defense on every single minor criticisms

Maybe he should go into politics

He should have : /

[luigi49]

If being a hypocrite is a minor criticism, I'd be scared to hear the accusation that would be considered major.

Most of the guys who are defending him have shares at berkshire.  I don't blame them.

[innerscorecard]

Warren is not a hypocrite but he is not a saint. He is a nice and generous guy on the whole but he is not perfect. I don't consider his business dealings to be very hypocritical, but you guys should check out the way he treated his adopted grandchildren. Cold as ice. You don't get to be successful in business only by being a kind father figure. But there is that side of him too. He volunteers a lot of his time for young people. Few in his position host 40 school delegations a year.

[warfreak2]

Most of the guys who are defending him have shares at berkshire.  I don't blame them.

I don't have any vested interest in BRK; I'm only concerned with making reasonable arguments and holding justifiable opinions. Yours is argument ad hominem, for example.

[matchewed]

Thank goodness WB has so many people coming to his defense on every single minor criticisms

Maybe he should go into politics

I'm fine with criticism. I'm less fine with people just throwing shit at other people for no apparent reason, regardless of who the people happens to be. Feel free to criticize Warren Buffett. Just realize what criticism is and what it isn't. AKA see rule number one of this forum and life in general. Being a jerk just for the sake of being a jerk is something I'm going to be all over because I don't like it when people are assholes, and it's much easier to do it on the "anonymous" internet where we are sharing ideas.

[oldtoyota]

Warren is not a hypocrite but he is not a saint. He is a nice and generous guy on the whole but he is not perfect. I don't consider his business dealings to be very hypocritical, but you guys should check out the way he treated his adopted grandchildren. Cold as ice. You don't get to be successful in business only by being a kind father figure. But there is that side of him too. He volunteers a lot of his time for young people. Few in his position host 40 school delegations a year.

Not disagreeing with the above. In general, though, I find it interesting that people tend to say "it's business" when people are jerks. Guess what? You *can* be nice in business. It may seem shocking, but it is possible.

My guess is that WB has his eye on the end and is not thinking much about the "details" such as lives being ruined by his business choices. He may not think about it at all. A lot of people compartmentalize to handle the "bad" things they do day in and out. I am not excusing his behavior, by the way, but just explaining a possibility.

Like I said before--and someone else also said--no one is perfect. Some engage in worse activity than others. Look around at your place of work, and you'll probably see a lot of bad behavior even from people you generally like and maybe even trust. No one is a saint. To think so seems idealistic to me. I don't like it either. I would like for there to be an ideal role model I could emulate and admire. Instead, I've found I can only admire specific aspects of people.

The good news is that I read an article shared on Facebook, and the world is going to end in 20 years (according to some researchers). ;-) So, go enjoy what we have left. =-)

[matchewed]

Thank goodness WB has so many people coming to his defense on every single minor criticisms

Maybe he should go into politics

I'm fine with criticism. I'm less fine with people just throwing shit at other people for no apparent reason, regardless of who the people happens to be. Feel free to criticize Warren Buffett. Just realize what criticism is and what it isn't. AKA see rule number one of this forum and life in general. Being a jerk just for the sake of being a jerk is something I'm going to be all over because I don't like it when people are assholes, and it's much easier to do it on the "anonymous" internet where we are sharing ideas.

Good to know there is someone who will stand up for those who are wrongfully criticized in the name of justice.

I hope you will consistenly apply that and come to the aid of others (including on this forum) who are the victims of jerks and a**holes flaming for no reason.

If you're referencing that hot mess of a forum topic about having it all that has devolved into... no fuckin' clue what I'd call it now; I hope I've learned when not to handle shit with my bare hands.  :)

[PantsOnFire]

Paraphrasing Penn Gillette, I think people like Warren Buffet (rich folks who think they are undertaxed) should just send the IRS the money regardless of the minimum requirements in the law, the loopholes, etc.  They'll gladly accept it.  I couldn't care less about whether Buffet's arguments are valid or not.  But if he is making those arguments while still *voluntarily* taking advantage of the loopholes, he is by at least some measure, a hypocrite. 

[arebelspy]

But if he is making those arguments while still *voluntarily* taking advantage of the loopholes, he is by at least some measure, a hypocrite.

Just stating something doesn't make it true.

The purple unicorn standing next to me told me that.

Can you refute any of the arguments on this thread as to why it's logical, moral, and not hypocritical to work within a system while still advocating it to change for everyone, including yourself?

[brewer12345]

If being a hypocrite is a minor criticism, I'd be scared to hear the accusation that would be considered major.

Most of the guys who are defending him have shares at berkshire.  I don't blame them.

Ain't never owned a share.  Likely never will.

[brewer12345]

If being a hypocrite is a minor criticism, I'd be scared to hear the accusation that would be considered major.

Most of the guys who are defending him have shares at berkshire.  I don't blame them.

Ain't never owned a share.  Likely never will.

What happens to the share price when he passes (he is, after all, 83yo and drinks cherry coke and eats burgers, or so he portrays)

Search me.  But as a dirty bottom-fisher I will be buying heavily if people panic and the share price crashes.

[warfreak2]

Paraphrasing Penn Gillette, I think people like Warren Buffet (rich folks who think they are undertaxed) should just send the IRS the money regardless of the minimum requirements in the law, the loopholes, etc.  They'll gladly accept it.  I couldn't care less about whether Buffet's arguments are valid or not.  But if he is making those arguments while still *voluntarily* taking advantage of the loopholes, he is by at least some measure, a hypocrite.

Penn Gillette appears to be responding to a straw man argument. Warren Buffett's position is not simply that Warren Buffett, alone, should pay more tax.

[PantsOnFire]

But if he is making those arguments while still *voluntarily* taking advantage of the loopholes, he is by at least some measure, a hypocrite.

Just stating something doesn't make it true.

The purple unicorn standing next to me told me that.

Can you refute any of the arguments on this thread as to why it's logical, moral, and not hypocritical to work within a system while still advocating it to change for everyone, including yourself?

Just because someone's actions are perfectly moral, logical, etc. does not mean they aren't hypocritical if they are advocating for something that is contradictory. 

I rather liked your argument that Mr. Buffet investing the money would indeed be a better use of the money than giving it to the government.  I think that may very well be true, and if so would certainly be a strong argument for it being moral and logical for him to withhold it. 

But if that is true, then wouldn't the inverse (not withholding it and instead giving it to the government) be immoral and illogical?  How could he argue that the law should be changed to take more of his money away, if he is more likely to make better use of the money?  And if he is not more likely to make better use of the money, than why is he not just forking it over? 

[warfreak2]

How could he argue that the law should be changed to take more of his money away, if he is more likely to make better use of the money?  And if he is not more likely to make better use of the money, than why is he not just forking it over?

Again, Warren Buffett isn't simply proposing that Warren Buffett, alone, should pay more tax. Warren Buffet may be an exceptional human being who will benefit society more by investing his money and giving it to charity, but the thing about exceptional people is they are the exception.

[arebelspy]

But if that is true, then wouldn't the inverse (not withholding it and instead giving it to the government) be immoral and illogical?  How could he argue that the law should be changed to take more of his money away, if he is more likely to make better use of the money?  And if he is not more likely to make better use of the money, than why is he not just forking it over?

Because, as WF2 said, he's not advocating that just him pay taxes or not.

Even if it would be more moral for him to keep his money, it may be better overall to have everyone contributing to a tax, even if it leaves less for him to grow.

[Tyler]

I don't think Buffet is a hypocrite.  But he's certainly a businessman looking to promote a product (BRK), so one should evaluate what he says critically even as they respect him.  The thing about Buffet is that at this point he's one of the biggest market makers out there.  So one can reasonably question whether he's successful because he calls the market, or if markets move according to his calls.  And to believe that anyone at that level is immune to or above politics and working the system in his favor is, IMHO, naive. 

[RootofGood]

I love him so much, I almost broke my "index funds only" investment strategy to buy some BRK (maybe an A share or two).

If you buy "B" shares then you can get much better pricing on the put & call options!

Woah, let's not get crazy here!  Selling options?  Too risky for me! I'll stick with my 97% equities portfolio.  ;)

[foobar]

You must not own any mutual funds:) Avoiding BRK and the stocks it owns is pretty much impossible these days....

If being a hypocrite is a minor criticism, I'd be scared to hear the accusation that would be considered major.

Most of the guys who are defending him have shares at berkshire.  I don't blame them.

Ain't never owned a share.  Likely never will.

[NumberJohnny5]

Following current laws at the same time as advocating their change is not the least bit hypocritical.

If not hypocritical, then is it at least immoral?

I remember a previous thread, a similar (to me) situation was brought up, but scaled way down for the "little guy". Many people (perhaps most?) said it was immoral to take money from the government if you didn't need it, even if you were technically following the law. Heck, a point was made that it was not the original law's intent to use it in such a way.

Did the original tax law intend for billionaires to be able to shelter so much money from the IRS? If not, should we not conclude that the Warren Buffets of the world are immoral? I'm simply advocating for equal treatment; either everyone who takes advantage of current laws is moral, or anyone trying to keep as much money from the government's pocket is immoral (ok, not QUITE that simple, but you get the general idea).

Either way, I find the current discussion quite interesting.

[Otsog]

So one can reasonably question whether he's successful because he calls the market, or if markets move according to his calls. 

No, one really can't.  Buffett evaluates his performance on book value per share against the market.  He has a 48 year record of compounding book value at 19.7%.  Saying there is a chance his success could be attributed to form over substance is a deeply flawed argument that only highlights your complete lack of knowledge of the topic.

Also, he never calls the market.  Ever.  He shares his thoughts on his faith in the American economy, but he never predicts where the market is going.

[Insanity]

Following current laws at the same time as advocating their change is not the least bit hypocritical.

If not hypocritical, then is it at least immoral?

I remember a previous thread, a similar (to me) situation was brought up, but scaled way down for the "little guy". Many people (perhaps most?) said it was immoral to take money from the government if you didn't need it, even if you were technically following the law. Heck, a point was made that it was not the original law's intent to use it in such a way.

Did the original tax law intend for billionaires to be able to shelter so much money from the IRS? If not, should we not conclude that the Warren Buffets of the world are immoral? I'm simply advocating for equal treatment; either everyone who takes advantage of current laws is moral, or anyone trying to keep as much money from the government's pocket is immoral (ok, not QUITE that simple, but you get the general idea).

Either way, I find the current discussion quite interesting.

There is considerable difference between using handouts from the government for food stamps when you have millions in the bank versus claiming a mortgage/retirement deduction for income loss.

The interesting one becomes the ACA subsidy rules and those that take out low income for normal expenses and then use the subsidies from that.  This one is quite a grey area for me.

[Tyler]

Saying there is a chance his success could be attributed to form over substance is a deeply flawed argument that only highlights your complete lack of knowledge of the topic.

Interesting that one would feel so strongly as to lash out for what I felt was a statement of respect to how influential Buffet is among investing circles.  If anything such reflexive support reinforces my point.

I absolutely respect his track record and don't think he's a hypocrite.  I just politely refuse the fanboy kool-aid.

[foobar]

Depends on your code of morals.:)

Bill G and Warren's point of view is that huge sums of money should not be passed down to kids. It isn't good for the kids or society.  Either give it away or tax it away.   You can disagree with that view point but unless Warren's kids end up with 10 billion each (see the Waltons) I am fine with it. 

Following current laws at the same time as advocating their change is not the least bit hypocritical.

If not hypocritical, then is it at least immoral?

I remember a previous thread, a similar (to me) situation was brought up, but scaled way down for the "little guy". Many people (perhaps most?) said it was immoral to take money from the government if you didn't need it, even if you were technically following the law. Heck, a point was made that it was not the original law's intent to use it in such a way.

Did the original tax law intend for billionaires to be able to shelter so much money from the IRS? If not, should we not conclude that the Warren Buffets of the world are immoral? I'm simply advocating for equal treatment; either everyone who takes advantage of current laws is moral, or anyone trying to keep as much money from the government's pocket is immoral (ok, not QUITE that simple, but you get the general idea).

Either way, I find the current discussion quite interesting.

[thepokercab]

Thank goodness WB has so many people coming to his defense on every single minor criticisms

Maybe he should go into politics

I'm fine with criticism. I'm less fine with people just throwing shit at other people for no apparent reason, regardless of who the people happens to be. Feel free to criticize Warren Buffett. Just realize what criticism is and what it isn't. AKA see rule number one of this forum and life in general. Being a jerk just for the sake of being a jerk is something I'm going to be all over because I don't like it when people are assholes, and it's much easier to do it on the "anonymous" internet where we are sharing ideas.

+ 2 on this.  I don't think anyone here is arguing that Warren Buffett is some sort of super awesome human being worthy of our constant praise.  He's a successful businessman whose given some money to charity.  Good for him.  On the same token- why is he more or less a "hypocrite" than anybody else?  Who here hasn't said one thing and done something else. 

Why not just start a thread called "________, Hypocrite? and go to town.

[NumberJohnny5]

There is considerable difference between using handouts from the government for food stamps when you have millions in the bank versus claiming a mortgage/retirement deduction for income loss.

Without taking the thread too far off-topic, I look at both scenarios in a long-term context. Instead of saying "for 5 years in a row you received more from the government than you paid in", I'd take into account what happened the years prior. In both scenarios, you have people who could willingly let the government have more money; but instead, used legal "loopholes" to keep as much money in their pocket as possible.

The interesting one becomes the ACA subsidy rules and those that take out low income for normal expenses and then use the subsidies from that.  This one is quite a grey area for me.

Probably a better (and not quite as emotionally charged) example. It seems that when we hear stories about how someone used a "loophole" to their advantage, before we can pass judgement we need to know their net-worth. If your net-worth is a few hundred in the bank, then you're scum for cheating the system. If you're a multi-millionaire, then you're financially savvy.

Am still curious as to whether people find Warren Buffet's actions immoral or not. Probably looked like a rhetorical question, but I'm genuinely curious. I know that being a hypocrite (or not) does not mean one's immoral (or not).

[Otsog]

Saying there is a chance his success could be attributed to form over substance is a deeply flawed argument that only highlights your complete lack of knowledge of the topic.

Interesting that one would feel so strongly as to lash out for what I felt was a statement of respect to how influential Buffet is among investing circles.  If anything such reflexive support reinforces my point.

I absolutely respect his track record and don't think he's a hypocrite.  I just politely refuse the fanboy kool-aid.

It really wasn't a statement of respect and I really wasn't lashing out : /

It was just an uneducated statement. 

[Nords]

Warren is not a hypocrite but he is not a saint. He is a nice and generous guy on the whole but he is not perfect. I don't consider his business dealings to be very hypocritical, but you guys should check out the way he treated his adopted grandchildren. Cold as ice. You don't get to be successful in business only by being a kind father figure. But there is that side of him too. He volunteers a lot of his time for young people. Few in his position host 40 school delegations a year.

Heh-- reading "The Snowball" to see how he treated his older sister... and his own kids... and the family dog... it's no surprise that he's uncaring toward someone a couple generations away with no genetic relationship.

I love him so much, I almost broke my "index funds only" investment strategy to buy some BRK (maybe an A share or two).

If you buy "B" shares then you can get much better pricing on the put & call options!

Woah, let's not get crazy here!  Selling options?  Too risky for me! I'll stick with my 97% equities portfolio.  ;)

Well, nobody is paying squat for the put options right now, and I have a ways left to go before I need to consider selling call options. 

[Insanity]

Without taking the thread too far off-topic, I look at both scenarios in a long-term context. Instead of saying "for 5 years in a row you received more from the government than you paid in", I'd take into account what happened the years prior. In both scenarios, you have people who could willingly let the government have more money; but instead, used legal "loopholes" to keep as much money in their pocket as possible.

To me the difference there is a clear cut difference.  Food stamps are there for those who actively need it (and there are those without money who actively take advantage of it).  Again, it is just my opinion.

The interesting one becomes the ACA subsidy rules and those that take out low income for normal expenses and then use the subsidies from that.  This one is quite a grey area for me.

Probably a better (and not quite as emotionally charged) example. It seems that when we hear stories about how someone used a "loophole" to their advantage, before we can pass judgement we need to know their net-worth. If your net-worth is a few hundred in the bank, then you're scum for cheating the system. If you're a multi-millionaire, then you're financially savvy.

Am still curious as to whether people find Warren Buffet's actions immoral or not. Probably looked like a rhetorical question, but I'm genuinely curious. I know that being a hypocrite (or not) does not mean one's immoral (or not).

I don't believe he is either a hypocrite or immoral.   I understand the view of those who do, but I don't agree with it.

[fixer-upper]

I've never heard the man make a stand like Tim Cook recently did. 
I've never heard him take responsibility for layoffs .
He stays out of the limelight when he ships jobs to China.
He doesn't apologize when his products are downsized.

Is it fair for me to judge him for the actions of the CEOs he hires and fires?  I think so.

[Nords]

I've never heard the man make a stand like Tim Cook recently did. 
I've never heard him take responsibility for layoffs .

I think Tim Cook is probably one of the good guys, but I have yet to hear ANY of America's CEOs of publicly-traded corporations say "Well, I've already cut my own salary back below the company's average wage, so now I'm afraid I'm going to have to lay off a few employees."  Come to think of it, I'd probably include private corporations in that accusation too.

Instead the media publicizes the layoffs amid much jaw-clenching and hand-wringing, along with some public self-flagellation.  Then next year in the annual report it notes that the CEO's compensation last year was "only" seven digits instead of eight.  Sure, he layed off eight or even nine digits worth of salary expenses, so maybe he's worth the price, but he could've saved a few jobs by cutting his own salary. 

Buffett has a number of issues (like avoiding confrontation at all costs) but last year his salary was $100K.  His reimbursed expenses were about $350K (personal security, jet fuel).  Meanwhile his CFO made over $1M. 

The difference is that Buffett has a much higher percentage of his net worth tied up in Berkshire's share value-- and it's a lot higher than Tim Cook has tied up in Apple's value, too, let alone the rest of the S&P500's CEOs.