Warren Buffet: Obama’s Welfare Queen

The media is full of news about the (miniscule) “taper” that the Federal Reserve is doing. It is asking what will happen to the stock market. Yet this story appeared without any mention of Quantitative Easing or Federal Reserve stimulus.

Warren Buffett gained more wealth than any other U.S. billionaire, adding $37 million a day, according to one study.

Through Dec. 11, Buffett’s net worth—at least on paper—shot up by $12.7 billion to $59.1 billion in 2013 from $46.4 billion at the start of the year, according to Wealth-X, the wealth research firm. That works out to a paper gain of $1.5 million an hour.

[…]

The gains were fueled almost entirely by rising stock prices, which boosted the value of company shares held by founders and corporate chiefs. And the wealth was spread throughout all industries, suggesting that the broad stock market gains have been the chief wealth driver this year—rather than industry-specific gains in tech, energy or other sectors.

The story contains a link to a related article, which tells us:

The top 1 percent’s share at the end of 2012 was equal to 50.4 percent of the U.S.’s overall wealth, a level higher than any other year since 1917 and surpassing 1928, the peak of stock market bubble in the “roaring” 1920s, according to Emmanuel Saez, a professor of economics at the University of California, Berkeley.

Since the financial crisis of 2008, the top 1 percent of incomes have grown by 31.4 percent while the bottom 99 percent of incomes has grown only by 0.4 percent, he said.

This is what Obama’s and Bernanke’s monetary policies do to the country. They provide massive infusions of wealth to the wealthiest people. Even though Warren Buffett does not live in Connecticut, this is what Jim Grant was referring to when he said,

Five years, and they are conjuring $85-billion-a-month, with which to buy securities, with which to enrich Greenwich, Connecticut, even more. This is what it is. This is the policy of the one-tenth of one percent. […] You said there is no inflation. How about on Wall Street? How about stocks and bonds and art and Ferraris and farmland? Assets are up.

If pushed, Obama and Bernanke will claim that they are hoping people use this stock market windfall to invest in businesses and hire people. But not only is the business environment toxic (a situation that is not helped by Obamacare, or the EPA, or many other Obama policies), but why should people take the time and energy and risk to start businesses when they can simply watch their wealth grow in the stock market. Basically, Obama is a believer in a poisonous form of “trickle-down” economics even as he condemns such ideas. As George Will wrote:

Obama’s speech denounced “trickle-down ideology” and deplored growth that “has flowed to a fortunate few.” But the monetary policy he favors — very low interest rates, driving money into equities in search of higher yields — is a powerful engine of inequality. Since the Dow closed at 7,949 on Inauguration Day 2009, it has doubled , benefiting the 10 percent who hold 80 percent of directly owned stocks. The hope is that some of this wealth will trickle down.

So that’s why Warren Buffet got $37 million every day while you got hammered in 2013. It’s also why Buffet is an Obama supporter who contributed to his campaign. That’s another fact that the story about Warren Buffet’s amazing riches in 2013 decided not to bring to the reader’s attention.