I See Your Buffett Rule and Raise You a Day Dictum

By J.F. McKenna

The Buffett Rule. This latest addition to the Beltway lexicon carries a certain authoritative cachet, doesn’t it? It’s fairness as endorsed by a mega-wealthy success story himself. Named for celebrated billionaire investor Warren Buffett, the rule is a proposed minimum tax on millionaires. The Buffett Rule is offered by President Obama as a sparkling marketing jewel in his latest plan to salvage these United States from fiscal ruin. All those opposed, POTUS insists, are ignorant scalawags who wouldn’t know an innovative idea if it came special delivery from the nearly bankrupt postal service.

The Buffett Rule may indeed be the marquee part of the plan, and it may have star power attached to the adjective. But it is hardly innovative in terms of economic thinking or political rhetoric.

Let’s dispatch the rhetorical canard first. British writer George Orwell cautioned his own countrymen about slick word-packaging 65 years ago. In Politics and the English Language, Orwell observed that the “whole tendency of modern prose is away from concreteness.” Even as a phrase standing alone, The Buffett Rule misrepresents itself as something solid. A rule, by definition, is a principle. Here we have an already disputed proposal with a brand name attached. (Buffett is most certainly the brand of his investment firm, Berkshire-Hathaway.)

The political shorthand to promote more taxation prompts me to offer another Orwellian reference. “If thought corrupts language,” Orwell insisted, “language can also corrupt thought.” The corruption of sound economic thought is certainly represented by The Buffett Rule and the rest of the new Obama fiscal package.

“Either we ask the wealthiest Americans to pay their fair share in taxes, or we’re going to have to ask seniors to pay more for Medicare. We can’t afford to do both,” President Obama said. “This is not class warfare. It’s math. The money is going to have to come from someplace.”

In the president’s statement, you will find loaded words and tortured expressions. He promotes the fair share, discounts class warfare, even reworks the underlying concept of math. I can almost hear Orwell, that old democratic socialist, spinning in his grave.

What this championing of The Buffett Rule et al ignores is the fact that government ‒ whatever its leaders say from the podium ‒ is not, never has been and never will be a true agent of economic growth. All economic players are in the private sector and always have been. You can find this time-tested fact summarized in what I call The Day Dictum, named for my chief editor at Industry Week magazine.

“Only three things create wealth,” Chuck Day would say often. “You can make it. You can mine it. Or you can grow it.” He never amended his comment to “You can also legislate it.”

Over my years as a business writer, I know that hasn’t changed. Make it, mine it, grow it. The only economic role for government is regulatory and confiscatory. As I type, the Dow Jones numbers tell me that Uncle Sam’s once tangential role is now pernicious.

Let me add politically poisonous.

“Pitting one group of Americans against another is not leadership,” House Speaker John Boehner said. “This administration’s insistence on raising taxes on job creators and its reluctance to take the steps necessary to strengthen our entitlement programs are the reasons the president and I were not able to reach an agreement previously.” Congressman Boehner said. “And it is evident today that these barriers remain.”

Five years ago, I was invited to a group luncheon with Warren Buffett in Chicago, right after he scored his biggest investment to date, the purchase of the Israeli corporation Iscar. He came across as a very thoughtful businessman. At that luncheon, Buffett noted that he and partner Charlie Munger were “good at spotting unusually good businesses run by unusually good people.” Why he has allowed his name to be attached to the president’s latest plan is hard for me to fathom. I am sure he is intimately familiar with The Day Dictum, or whatever it is called in Omaha.

Right now, the administration is ignoring what Chuck Day told me years ago. Much of the nation, however, grasps The Day Dictum. And most of the nation is weary of clever labels attached to political nostrums.

Most of us, in fact, have adopted this dictum from Orwell: “Invasion of one’s mind by ready-made phrases…can only be prevented if one is constantly on guard against them, and every such phrase anaesthetizes a portion of one’s brain.”

J.F. McKenna is a veteran business journalist and communications specialist. Reach him at jf_mckenna@yahoo.com .

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Comments

  1. “Collecting more taxes than is absolutely necessary,” Calvin Coolidge said, “is legalized robbery.”

    Nothing like a full stomach and 2nd home on the lake to make you a Calvin Coolidge fan. It’s all about self interest. If you can’t find a job you’re all for Unemployment comp; if you’ve got a nice job, it’s all about “bootstraps.” Don’t raise taxes on well-to-do folks (or tax unearned income the same as earned income)… just have financially weak people get by on a little less. Sort of the way the English looked at Ireland for a few centuries.

  2. Barrie, please excuse the painfully slow response to your Swiftian comments. Maybe another quote, this one from John Kennedy, might clarify things–A rising tide lifts all boats. JFM

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