Thursday, August 25, 2011

Barack's Buffett Bathtub Bailout

Warren Buffett has been a political supporter of President Barack Obama for a long time.

Buffett endorsed Obama's 2008 candidacy early on. He's advised the President on economic policy and ways to promote investment in the American economy, reportedly as recently as this past Monday while the President was on vacation in Martha's Vineyard.

And, Buffett reportedly plans to hold a $10,000-a-ticket fundraiser for Obama's reelection campaign next month. (Read more here...)

Buffett's support for Obama is certainly not unique. But today, Buffett did what virtually no other American could do to support Obama's chances for reelection in 2012 - he personally stimulated the economy by making a $5 billion personal investment in Bank of America.

Is this an Obama bailout straight from Buffett's bathtub?

The motive is clear. Recently, Buffett wrote an op-ed in the New York Times in which he lamented Washington's "coddling of the rich." It was plainly in support of oft-used Obama talking points about the need for the wealthy and large corporations to "pay their fair share." Now, it seems, Buffett is literally putting his money where his mouth is, and he's doing it at a time when Obama most needs support.

Not that there's anything at all wrong or improper with that, of course. There isn't. Like every other American, Warren Buffett is free to invest his money where and as he pleases.

We just think it's curious that one of America's wealthiest citizens would choose to make this investment in Obama's political future now. History shows it's a bad bet to bet against Warren Buffett, and we have no doubt he will reap a hefty profit from Bank of America. But, when it comes to backing Obama in 2012 - a president with high disapproval ratings, high unemployment and skyrocketing national debt - we think this might just be one investment where Buffett takes a bath.

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