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March 10, 2007
The Buffett Rule
It's not every day that the NY Times editorial page heaps praise on a businessman, so my eyebrow raised a bit when I read this editorial yesterday elevating Berkshire Hathaway chairman Warren Buffett to folk hero status.
But it wasn't too long ago that the Times and other mainstream media outlets were questioning whether Buffett had been involved in criminal wrongdoing (see also here). Indeed, there was even speculation that Buffett did some fancy footwork to avoid the same fate as his friend and business associate, former AIG chairman, Maurice "Hank" Greenberg. Buffett avoided an indictment and Greenberg's fate, but others at Buffett's company were not so fortunate.
So, do we now have the makings of "the Buffett rule?" A folksy and media savvy businessman involved in complicated structured finance transactions is given a pass so long as he serves up a few sacrificial lambs when prosecutors criminalize the deals, regardless of whether the prosecutors fully understand the transactions in the first place. Meanwhile, a decidedly unfolksy businessman who is involved in the same transactions stands behind his company and subordinates, but is publicly accused of lying and forced to resign to save his company from being prosecuted out of business. Sounds a bit like the Apple Rule, don't you think? Or is it more like the Dell Rule?
My, we are getting quite a few rules here. Perhaps we should rethink the reason why we need such rules in the first place.
Posted by Tom at March 10, 2007 8:10 AM
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