Berkshire Billionaire No Fan of Charity, Tells Poor to ‘Suck It In and Cope’

Warren Buffett’s right-hand man lashed out at government handouts while also praising the bailout in a speech at University of Michigan.

Charlie in charge

Berkshire Hathaway’s Vice Chairman Charlie Munger and his longtime business partner Warren Buffett apparently do not see eye to eye when it comes to charity. In 2006, Buffett donated pledged 85% of his $40 billion fortune to the Bill and Melinda Gates Foundation and has recently been urging more billionaires to do the same. Munger is having nothing of it. “There’s danger in just shoveling out money to people who say, ‘My life is a little harder than it used to be,’” Munger said at an event at the University of Michigan, which was moderated by CNBC. “At a certain place you’ve got to say to the people, ‘Suck it in and cope, buddy. Suck it in and cope.’”

Both billionaires, however, backed the bank bailout. Does Munger oppose individual charity but support corporate welfare?

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World Cup: Rethinking Video Replays

This piece, which was originally intended for the Goal Post, has inadvertently confirmed one of the oldest stereotypes about The New Republic. As media critic Brendan Nyhan describes it, TNR has a tendency to elevate “the ‘surprising’ and ‘counter-intuitive’ article above all else.” Well, this was from the actual rejection email I got from a junior editor there: “Talked to the higher ups and I think they’ll pass on this one. I guess not quite as counter-intuitive as they look for.” Disappointing, but also a bit hilarious.

I hope you find it more worthwhile. If so, you can let me know in the comments below.

Imagine for a moment that an executive order made the use of closed caption television in the detection or prosecution of crimes illegal. Police officers could only relying on sleuthing skills and serendipitous timing to catch bank robbers or vandals in the act. With hours of incriminating video and hundreds of unpunished criminals, video of unsolved crimes would quickly go viral, provoking the outrage of citizens at the odd handicap the president had imposed on their protectors. “We can see the video, why can’t the police?” the public would demand to know.

Soccer fans are again asking much the same question of Fifa. Why are referees–the lawmen with the flags and whistles and power to clean up the game–unable to use the video replay technology available to every other fan? As the New York Times reports, replay is not only available to home viewing audiences, Fifa also uses it “to entertain fans in the stadiums here in South Africa. Large screens show replays right after a near miss or a stunning goal (of which there have been fewer here per game than any tournament in history). But while entertainment of fans is an acceptable use of video, it is not used to enlighten them or to help the referees.”

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Shame on Harvard?

Adam Wheeler's Mug Shot

After spending more than three years in the English department at Harvard University, Adam Wheeler was found out. He had been expelled from my alma mater, Bowdoin College, in 2005 during his freshman year. Wheeler now, days before graduation, has been arrested for “20 indictments charging him with larceny, identity fraud and falsifying documents,” according to the Boston Herald.

While Wheeler is facing legal trouble, Harvard has its reputation at risk.

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The American Prospect: Hypocrisy for a Good Cause?

This is my third post on a topic of my choice for the Prospect‘s writing test (and the favorite of my sister, who graciously helped to copy edit my submissions). I give a Minnesotan take on the Oracle of Omaha in this piece. The first TAP test post had a green angle, the second talked up tax policy.

Warren Buffett is perhaps the only financer in history who is as revered on Main Street as he is on Wall Street. Buffett’s appeal in the Midwest—the part of the country that most closely resembles the mythical Main Street of American political lore—can be explained by his plainspoken criticism of financial excess, his long-standing commitment to philanthropy, and the fact that the Oracle of Omaha actually lives in Nebraska. Even the annual shareholder meetings of his $100 billion conglomerate Berkshire Hathaway are as American as apple pie.

So many were surprised by Buffett’s unabashed support for Goldman Sachs at what has been called “the informal summit of Main Street American capitalism.” No one should be shocked by Buffett’s satisfaction with the $5 billion preferred stock investment he made in Goldman or his support for the bank’s embattled CEO Lloyd Blankfein. Buffett’s statements are part of a broader pattern of advocating for one thing while profiting by contradicting his supposed beliefs.

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The American Prospect: Learning From Greece

This is my second post on a topic of my choice for The Prospect‘s writing test. The first is here.

If you had asked me last week what lessons the US can learn from the Greek crisis, I would have only said, “don’t ask Goldman for debt advice.” Then over the weekend I read an insightful dispatch from Suzanne Daley in Athens:

In the wealthy, northern suburbs of this city, where summer temperatures often hit the high 90s, just 324 residents checked the box on their tax returns admitting that they owned pools.

So tax investigators studied satellite photos of the area—a sprawling collection of expensive villas tucked behind tall gates—and came back with a decidedly different number: 16,974 pools.

That kind of wholesale lying about assets, and other eye-popping cases that are surfacing in the news media here, points to the staggering breadth of tax dodging that has long been a way of life here.

It sounds like Greece is finally beginning to address the corrosive influence tax evasion and loopholes have had on both its battered budget and frayed social contract.

Tax evasion—long a favorite pastime in parts of southern Europe—is essentially an abdication of an individual’s commitment to society. Taxpayers provide revenue to the government, which in return provides public goods and services that markets fail to adequately produce. For example, most governments create transportation infrastructure and regulate water utilities. In Athens, the wealthiest citizens have upset this equation. They drive home along winding suburban streets and bask in pools filled with clean, subsidized municipal water—both of which are paid for in larger part by more honest (or audited) Greeks. The remainder of the balance has been paid for with unsustainable loads of foreign debt. As Daley notes, Greece “may be losing as much as $30 billion a year to tax evasion—a figure that would have gone a long way to solving its debt problems.”

Loopholes in Greece are less insidious, but also problematic. They exempt politicians’ favored constituencies from paying the full cost of the federal services they receive. Easily and inconspicuously slipped into law as an amendment to an unrelated bill, a tax giveaway then becomes maddeningly difficult to repeal. The beneficiaries will go all out to defend a targeted advantage most taxpayers are not even aware had been granted. Daley highlights one successfully repealed license to steal: Greek newsstand owners could avoid auditing by simply declaring an income of 12,000 euros (about $15,900). Any additional income was essentially tax-free.

All this lost tax revenue has added up. As Will Hutton reported in February, “uncollected tax runs at 13.6% of national output per year—more than the deficit.” No longer able to cheaply finance their growing sovereign debt on the skittish bond markets, Greek leaders have been forced to strengthen the country’s tax code. Unlike the cuts to wages, pensions, and public services that Prime Minister Papandreou’s Socialist government has been forced to make, this politically unpopular move will broadly benefit Greek society.

Although it may not be as flagrant or pervasive, America also suffers from tax evasion and a gamed tax code.

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The American Prospect: Job Openings for Inspectors General

The Prospect liked my previous pieces enough that they gave me the opportunity to take a follow-up writing test. This time around, they requested that I pitch a story for the mid-term elections and write three posts that could have been featured on the magazine’s group blog TAPPED. For the blog pieces, which I am posting on Hiar Learning, I tried to emphasize my analytical strengths in selecting the topics I chose to blog about. This first post has a slight environmental bent.

The Center for Public Integrity has published the results of a thought-provoking survey of vacant government oversight positions by John Solomon. The Center’s journalist-in-residence compiled a list of 73 inspectors general, chief auditors, or whistleblower protection positions across government and found that at least 15 are currently unfilled or being covered by acting officials.

Solomon makes a compelling argument that if the Obama administration intends to live up to its professed commitment to transparency, it must work to fill these important positions as soon as possible. “Over the years, government watchdogs have produced some memorable investigations, uncovering federal workers who watched pornography from government computers, revealing that federal housing vouchers were still being paid to dead Americans, and disclosing the FBI’s illegal gathering of phone records,” he notes.

There is nothing stopping the administration from immediately hiring inspectors general at the Equal Employment Opportunity Commission, the Communications Commission, the Labor Relations Authority, and the National Endowment for the Arts. Senate confirmation is not required to fill IG posts at these four agencies and, possibly the Federal Housing Finance Agency, too. (In the text of the report, it says the agency’s IG nominee is awaiting confirmation, but on CPI’s spreadsheet, it says the FHFAIG doesn’t require confirmation.) Since December, the House of Representatives has also had its own IG position to fill.

Why are the administration and Congress dragging their feet about these oversight openings?

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Art on Ice, With an Activist Twist

“Climate change means culture change.” That is the message Dutch sculptor Ap Verheggen is trying to communicate via CoolEmotion, a project he co-founded with the support of the World Wildlife Fund (WWF). The first sculptures created by the project’s team of artists—two massive, stylized dogsled whips—were installed in March on an iceberg currently located just off the coast of Uummannaq, Greenland. This exhibition, and similar installations planned for Northern Canada and Siberia, attempt to raise public awareness of the effects climate change is having on the increasingly endangered, icy culture of the far north.

Much of the discussion about climate change has focused on the science and economics of the environmental challenge. Far less attention has been paid to how it will radically alter the lives of some isolated northern communities.

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The American Prospect: Using Republicans To Pass Financial Reform

This was a self-selected Prospect article critique for my application to their fellowship program. See this post for more information.

They probably won’t vote for it. But by including GOP ideas in the finance bill, Democrats can make it difficult for Republicans to effectively campaign against it.

Tim Fernholz believes the best strategy for Democrats to win the fight over re-regulating Wall Street is to learn from the lessons of the health care reform. The question is, what exactly are the takeaways from that successful legislative battle?

The first lesson, Fernholz says, is to be assertive. In the wake of Massachusetts Republican Scott Brown’s election to the Senate, congressional Democrats realized they would have to take a strong, cohesive stance to enact health care reform. And with that decision made, they rallied together and passed a controversial bill. Fernholz notes that their assertiveness has boosted both the popularity of their health care reform overhaul and, if the breathless reporting of POLITICO is to be believed, the party’s midterm reelection chances.

Fernholz’s other lesson is that Republicans cannot be counted on to cooperate. “If Democrats want to replicate their health-care success,” Fernholz suggests, “the best strategy for strong reform is to bring a tough bill to the floor and dare Republicans to filibuster it.” But Republicans don’t need too much taunting to call a filibuster. Indeed, with little substantive provocation, the minority party has set a new record for obstinacy this congressional session. And, as Fernholz notes, this is a strategy Republicans have doubled down on in the wake of their crushing health care defeat.

By focusing primarily on the assertiveness Democrats showed at the last moment and the stonewalling of the GOP, Fernholz overlooks perhaps the most important lesson from the battle for health care: the importance of co-opting the best Republican ideas.

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The American Prospect: Don’t Ignore Inequality

For The American Prospect‘s excellent (and highly competitive) fellowship program I had to submit two article critiques and a critique of their group blog TAPPED, among much else. This article critique was assigned, the second critique is of an article I selected for myself. I’m still waiting–with fingers crossed–to hear back from the Prospect.

To improve the lot of the lowest, we must increase the taxes on those at the top.

Little more than a year after Wall Street’s bad bets brought the world economy crashing down, NYU Professor Dalton Conley told American Prospect readers, “don’t blame the billionaires.” This might have struck some as audacious after the implosion of the global economy, the cleaning up of which has disproportionately benefited the very same billionaire bankers who played such a central role in engineering the collapse.

Yet Conley was merely reiterating what was then and now conventional wisdom about the growing gap between the rich and everyone else. In a June 2006 issue featuring a special report on American income inequality, The Economist editorialized, “government should not be looking for ways to haul the rich down. Rather, it should help others, especially the extremely poor, to climb up.”  Two Brookings Institution scholars echoed this sentiment in a recent Huffington Post column, “America Needs More Economic Mobility.” This viewpoint overlooks one key question: Is it possible for the inequality of wealth and income to reach such a level that it inherently limits the economic opportunity open to those at the bottom?

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Inside EPA: Coal States vs. the GAO

This was a wonky writing sample I did after my fourth interview with Inside EPA, a subscription investigative newsletter put out by the Inside Washington Publishers group. In the end, I was disappointed when the publishers decided they wanted someone with more newsroom experience, but I am still proud of the writing I submitted.

States Critical of GAO Report on Mountaintop Mining Financial Assurances and Oversight

The negative response of three out of four states to a recently released Government Accountability Office report, which raised questions about the adequacy of their long-term environmental monitoring and financial assurances for former mine sites, indicates any mountaintop mining regulatory changes will have to occur at the federal level.

The report, titled Surface Coal Mining: Financial Assurances for, and Long-Term Oversight of, Mines with Valley Fills in Four Appalachian States, focused on mountaintop mining in Kentucky, Tennessee, Virginia, and West Virginia. Between October 1, 2001 and June 30, 2005, those four states accounted for more than 98 percent of US valley fills—a mountaintop mining remediation practice where excavated earth and rock is disposed of by filling in adjacent valleys or hollows. The GAO noted studies of long-term conditions near reclaimed mine sites with valley fills “have shown environmental impacts.” Although it makes no explicit recommendations, the report implies that states’ duration of environmental monitoring and provision of financial assurances may be inadequate.

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