Charlie Gasparino of Fox Business News rakes Warren Buffett over the coals today for his hypocrisy on Moody’s. This is hardly the first time he’s talked his book, and usually reporters don’t call him on it. Gasparino does here:
Reporters tend to put him on a pedestal where they forget that this guy often talks his own book…
He believes that it’s a sleazy business, and it makes a lot of money so he’s going to own it. Well, you know that takes Warren Buffett down three notches in my book…
Warren Buffett, who constantly opines about right and wrong, defends wrong because it was a good investment…
Warren Buffett is defending the most corrupt business model in corporate America.
And props to Liz Claman, who got in a tough question in an earlier one-on-one interview with Buffett:
You being the largest shareholder in Moody’s would that make you knowingly or not complicit in the unwinding of the financial system?
(h/t Zero Hedge)
— McClatchy reports that Buffett in sworn testimony today denied that Moody’s warned him about problems in highly rated bonds.
Testifying before the panel mandated by Congress to find out why the financial world quaked in 2008, Buffett — the largest shareholder in Moody’s — denied ever being warned.
“No,” Buffett said, responding to a question from panel chairman Phil Angelides about a McClatchy report earlier this year that two senior Moody’s officials had warned Buffett about complex bonds backed by junk U.S. mortgages. He also said he had no idea how Moody’s rated bonds…
However, a former Moody’s executive who told McClatchy earlier this year that he’d shared documentary evidence about his contact with Buffett with panel investigators, stands by his assertion, which McClatchy verified independently.
“I reached out to him, and I’ve got the e-mail sent to him and the commission has it as well,” the former senior executive said Wednesday. He requested anonymity to protect his current job, which isn’t with Moody’s.
That earlier McClatchy report on Moody’s warning Buffett is right here.
— Yves Smith, in talking about why Washington isn’t attacking the unemployment crisis aggressively enough, goes off on how labor is treated in this country:
So what explains this bizarre, self-destructive posture? One simple explanation is that the neoclassical economics orthodoxy has become so hopelessly entrenched despite its manifest failure (witness the crisis) that few can see how deeply captured they are by its ideology. A key tenet is the demonization of organized labor, combined with a refusal to recognize that many forms of commercial activity tend to lead naturally to agglomeration of power. Thus unions serve as a useful counterweight to concentrations of corporate power…
It is perverse that unions for middle and lower income workers are demonized, but unions for the educated, like the legal, accounting, and medical professions, get nary a second thought…
But most of America appears to have deeply internalized the belief that labor lacks, and perhaps more important, ought not to have any bargaining power. This is a wonderful state of affairs for the managerial elite and investors. Having labor share in productivity gains was no impediment to growth; indeed, the record from the end of World War II through the mid-1970s versus the last two decades would suggest the reverse.
And the argument that US labor cannot compete with China et al is overblown. In most cases of outsourcing and offshoring, the results are disappointing (a dirty secret you will find if you burrow into the literature; for instance, IT, a popular candidate, has a particularly poor record). But it also serves to reduce lower-level labor costs and INCREASE managerial costs (greater coordination required).