Warren Buffett Interviews Henry Paulson on the Collapse of the Global Financial System (2010)

The Film Archives

Published on Jul 23, 2013


Paulson, acting as U.S. Treasury Secretary, caused outcries from both the Republican and Democratic Parties as well as the general populace as he tried to get the situation under control.

Through unprecedented intervention by the U.S. Treasury, Paulson led government efforts which he said were aimed at avoiding a severe economic slowdown. After the Dow Jones dropped 30% and turmoil ensued in the global markets, Paulson pushed through legislation authorizing the Treasury to use $700 billion to stabilize the financial system. Working with Federal Reserve Chairman Ben Bernanke, he influenced the decision to create a credit facility (bridge loan and warrants) of US$85 billion to American International Group so it would avoid filing bankruptcy, after having been told that AIG held teacher pension plans, 401k plans, $1.5 trillion in life insurance plans for Americans, and the French Finance Minister called to let Paulson know that AIG held the interests of many Eurozone countries.

On September 19, 2008, Paulson called for the U.S. government to use hundreds of billions of Treasury dollars to help financial firms clean up nonperforming mortgages threatening the liquidity of those firms. Because of his leadership and public appearances on this issue, the press labeled these measures the "Paulson financial rescue plan" or simply the Paulson Plan.

With the passage of H.R. 1424, Paulson became the manager of the United States Emergency Economic Stabilization fund.

As Treasury Secretary, he also sat on the newly established Financial Stability Oversight Board that oversaw the Troubled Assets Relief Program.

Paulson agreed with Bernanke that the only way to unlock the frozen capital markets was to provide direct injections into financial institutions so investors would have confidence in these institutions. The government would take a non-voting share position, with 5% dividends for the first year on the money lent to the banks and 9% thereafter until the banks stabilized and could repay the government loans. According to the book Too Big To Fail, Paulson, Bernanke, New York Federal Reserve Chairman Timothy Geithner, and FDIC Chairman Sheila Bair attended the October 13, 2008 meeting on at which this plan was presented to the CEOs of nine major banks.

http://en.wikipedia.org/wiki/Hank_pau...


.

Obama Calls For 'Buffett Tax' On Millionaires

11:13am UK, Sunday September 18, 2011

Barack Obama is to propose a "Buffett Tax" on people earning over $1m (£630,000) a year as part of his deficit recommendations to Congress on Monday.

The President is hoping the millionaires tax will connect with voters

The move is seen as a populist vote winner ahead of the 2012 elections and critics say it will not have much impact on the $3trn (£1.9trn) deficit savings being sought over the next ten years.

The proposal is called the "Buffett Tax" after US billionaire investor Warren Buffett, who wrote earlier this year that rich people like him often pay less in tax than those who work for them due to loopholes in the tax code, and can afford to pay more.

The US President has repeatedly called on Congress to close tax loopholes for "millionaires and billionaires" as he seeks to differentiate himself from the Republicans before next year's election.


Warren Buffett (L) is given the 2010 Medal of Freedom by President Obama

The "Buffett Tax" could help energise President Obama's supporter base by highlighting a feature of the US tax code that allows the rich to pay lower rates of tax than less wealthy Americans because much of their income comes from investments.

The president is expected to outline steps to raise tax revenue as well as cuts in government spending in Monday's proposals.

These could include reforms of the government's healthcare programs aimed at the elderly and those on low incomes.

Mr Obama is not expected to make any changes to the social security retirement plan.

The president's opinion poll ratings have fallen over his perceived handling of the economy and he will want to counter Republican claims he is a 'tax-and-spend' liberal as he campaigns for re-election next year.

Republicans, who control the US House of Representatives, have said that they will not agree to tax hikes.

Mr Obama's millionaire tax proposal comes as British Chancellor George Osborne headed in the opposite direction ordering a review of the controversial higher band 50p tax, saying "inefficient" taxes are pointless

Source

Buffett's one-day win on Bank of America: $357 million

Buffett's one-day win on Bank of America: $357 million

CBC.ca

CNNMoney - 33 minutes ago by Maureen Farrell August 26, 2011: 12:41 PM ET NEW YORK (CNNMoney) -- Warren Buffett earned $357 million in paper profits on Thursday simply on warrants ...

Should you follow Buffett into Bank of America?

CBC.ca

MarketWatch - 13 hours ago - Warren Buffett, the Oracle of Omaha, has plunged $5 billion into Bank of America /quotes/zigman/190927/quotes/nls/bac BAC +3.25% . ...

Warren Buffett: Tax Hypocrite

By Bill Wilson on August 24th, 2011

President Barack Obama and Warren Buffett in the Oval Office, July 14, 2010. (Photo credit: Pete Souza)

The Obama Administration has turned to billionaire Warren Buffett, chairman and chief executive of financial giant Berkshire Hathaway, to make the case for raising taxes on the rich because, says Buffett, he can afford it. On Aug. 22, the White House reportedly chatted with Wall Street’s most famous investor to get his thoughts about the sputtering economy.

What likely got the Administration’s attention was Buffett’s oped in the New York Times. Buffett proposed that “It’s time for our government to get serious about shared sacrifice.” He implied he would like to see the capital gains be treated equally as income.

To wit, he wrote of the so-called “super-rich”, which he apparently defines as households earning $1 million or more a year: “Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering.” Isn’t that nice of Mr. Buffett?

But if he were truly sincere, perhaps he might simply try paying the taxes the Internal Revenue Service (IRS) says his company owes? According to Berkshire Hathaway’s own annual report — see Note 15 on pp. 54-56 — the company has been in a years-long dispute over its federal tax bills.

According to the report, “We anticipate that we will resolve all adjustments proposed by the U.S. Internal Revenue Service (‘IRS’) for the 2002 through 2004 tax years at the IRS Appeals Division within the next 12 months. The IRS has completed its examination of our consolidated U.S. federal income tax returns for the 2005 and 2006 tax years and the proposed adjustments are currently being reviewed by the IRS Appeals Division process. The IRS is currently auditing our consolidated U.S. federal income tax returns for the 2007 through 2009 tax years.”

Americans for Limited Government researcher Richard McCarty, who was alerted to the controversy by a federal government lawyer, said, “The company has been short-changing the tax collection agency for much of the past decade. Mr. Buffett’s company has not fully settled its tax bills from 2002-2009. Yet he says he’d happily pay more. Except the IRS has apparently been asking him to pay more going on nine years.”

Apparently, not paying taxes in full is an annual occurrence under Buffett’s watch. Considering the size of the company, the amount of unsettled taxes could total in the tens of millions.

McCarty explained, “The rough translation of the report is that Berkshire Hathaway did not pay all the federal taxes that it was required to for 2002 through 2004. The IRS examination team caught Berkshire Hathaway on at least some issues. Instead of paying up, Berkshire Hathaway is threatening the IRS with protracted litigation and is in the process of cutting a deal with the IRS Appeals office.”

He continued, “For 2005 and 2006, Berkshire Hathaway again did not pay all the federal taxes that it was required to. Again, the IRS examination team caught Berkshire Hathaway on at least some issues. Now, Berkshire Hathaway is threatening the IRS with protracted litigation and is trying to cut a deal with the IRS Appeals office.”

McCarty concluded, “And, finally, the IRS has opened another examination of Berkshire Hathaway’s tax returns for 2007 through 2009, but has not officially sent Berkshire Hathaway the bill yet for taxes that Berkshire Hathaway failed to pay for those years. One would expect they will find yet more issues.”

Now, most Americans, when they receive a tax bill from the government, they pay it. They don’t get an attorney. They don’t appeal the bill. They pay it — on time and in full. But not Buffett’s company, which apparently takes years to settle its liabilities.

Since this appears to be an ongoing pattern at the company, it becomes reasonable to ask: Is this some sort of internal company policy to delay paying taxes on time? If so, could this be construed as a form of tax evasion?

Interesting questions for the man who professes to want to pay more to Uncle Sam, and who sees fit to raise the burden on all job creators — except for perhaps his company — despite the longest period of sustained high unemployment since the Great Depression.

As Mr. Buffett has seen fit to enter the political arena, in the interests of full disclosure, the American people should be alerted to his own taxing hypocrisy. Reporters should ask him, “If you’re so interested in paying more in taxes, why doesn’t your company settle its tax bills from the past decade now?”

Then they might ask him about the pot and the kettle as a follow-up.

Bill Wilson is the President of Americans for Limited Government. Americans for Limited Government is dedicated to putting the principles of limited government into action. They work with local groups across the nation to promote freedom, limited government, and the principles of the U.S. Constitution. Their goal is to harness the power of American citizens and grassroots groups in order to put the people back in charge in states across the country.

Source

High stakes, pressure in Davos

Tuesday, January 26, 2010

Listen to the show

http://marketplace.publicradio.org/www_publicradio/tools/media_player/popup.php?name=marketplace/pm/2010/01/26/marketplace_cast1_20100126_64&starttime=00:21:59.0&endtime=00:26:59.0

World Economic Forum 2010
High stakes, pressure in Davos


More than 2,500 people will gather for the World Economic Forum in the Swiss ski town of Davos to discuss how to fix the global economy. Stephen Beard reports on what attendees and observers can expect.





Alpenhorn players Dirk Schneider, left, and Andy Rechts prepare to entertain visitors to Davos, Switzerland, for the 40th annual World Economic Forum. (Stephen Beard / Marketplace)




TEXT OF STORY
Kai Ryssdal: The weather forecast for Davos, Switzerland, this week is a chance of snow and no small amount of hot air. The World Economic Forum will be taking over the tiny Alpine ski town starting tomorrow. More than 2,500 people, top politicians and corporate executives alike, are going to be there discussing how to fix the global economy. Our European bureau chief Stephen Beard is in Davos this week as well. And we asked him to find out what attendees and observers might expect.


--------------------------------------------------------------------------------

STEPHEN BEARD: As presidents, prime ministers and billionaires arrive in Davos, a pair of locals are laying on a traditional, Swiss welcome.

Dirk Schneider and Andy Rechts are limbering up on a couple of 20-foot alpine horns. Cattle herders once used this instrument to call in their cows from the mountainside. Now musicians like Andy and Dirk use them to entertain the tourists.

Dirk Schneider and Andy Rechts: You don't hear it everywhere and that makes it so special, so individual. You need to have plenty of wind to play this instrument. Yes, you do, definitely. You need a lot of wind, yes.

Cynics might say the same about the summit held every year in Davos. It is a huge talking-shop. A massive gabfest for the rich and powerful.

TONY BLAIR: This is a new world, but actually we've been taught a very old lesson, which is that values matter.

That's former UK Prime Minister Tony Blair at Davos last year. Every January, the small Alpine retreat is heaving with Russian oil tycoons, Chinese billionaires, head honchos from the U.S. and Europe. Just being here is a heady experience, says Lord Digby Jones a former British Trade Minister.

DIGBY JONES: You can be in a reception, and Bill Gates is on other side of the room. And Warren Buffet's over there, and it's a great ego massager. You feel that you're important.

All the leaders of the group of 20 nations are invited, though not all attend. Media chiefs and certain academics are invited too. And there's a sprinkling of movie stars.

Yes, a bit of a celebrity fest, but says Oxford University Professor Tim Garton-Ash, worthwhile, all the same.

TIM GARTON-ASH: The conference center for four days is a hive of networking. Quite a good thing, I think. Better that the leaders of the world should get to know each other than that they don't.

Davos enthusiasts claim these annual gatherings helped the former communist countries eastern Europe move to capitalism and helped ease China's emergence as a major economy.

Martin Wolf of the Financial Times says contacts forged at Davos may well have helped us weather the current economic crisis.

MARTIN WOLF: I think one of the reasons our world hasn't collapsed quite in the way that it did in the first half of the 20th century is that people just keep talking. I happen to believe that talking is quite a good thing to do.

The theme of this year's seminars and discussions is: Rethink, Redesign, and Rebuild. It will tackle issues like: how do we avoid the next crisis, how do we reform global institutions like the International Monetary Fund, how do we deal with China, how do we improve the state of the world? But these issues may not be uppermost in the minds of some of the summiteers.

EVAN NEWMARK: I did go there with the intent of helping the world, yeah. But my first priority was kind of to help myself.

Evan Newmark, now a columnist with the Wall Street Journal, has been to Davos as a businessman. Business pays for the forum. While politicians, media chiefs and academics attend for free, business delegates pay around $60,000 each. Worth every cent, says Evan.
.
NEWMARK: It was just a great place to meet and greet clients or potential clients. It was a place to do business. If you ask me how much did I contribute to improving the state of the world, I'm afraid my scorecard may be pretty empty.

Critics of Davos say the summit has self interest at its core. This year the summiteers are under pressure as never before to prove the critics wrong and to answer the question: How do we really improve the state of the world?

In Davos, this is Stephen Beard for Marketplace.
.
.
Source:http://marketplace.publicradio.org/display/web/2010/01/26/pm-davos-setup/
.