Coupon Clipper Warren Buffet's "trusted lieutenant" resigns. But he didn't do anything wrong. Are they idiots or liars? What do you think?

Obama gives Warren the Presidential Medal of Freedom

I made a few comments in a previous blog about the taking over of a chemical company by the Buffet Empire. Lubrizol is the company and Buffet is offering $9 billion for it. The money to be made by the wasters that run these enterprises is phenomenal as the shares of the company shot up immediately. Talking with a friend, I said that given the sums involved, there’s no way that these deals are not discussed with “connected” people, before hand. Buffet is a master thug; you cannot accumulate $50 billion being anything but a ruthless thug. Insider trading is the norm not the exception.

Not all agree with me. Warren Buffet writes Jason Zweig in this weekend’s Wall Street Journal, is “universally regarded as a beacon of integrity”. He writes this because it turns out that Buffet’s right hand man, the man that the WSJ says was widely seen as the “leading contender” to succeed him atop his financial empire has resigned under a cloud of suspicion concerning insider trading. It turns out the guy, David Sokol, bought $10 million dollars worth of Lubrizol stock, “just over a week before he suggested to Mr. Buffet that he should acquire the company.” What a coincidence.

Zweig’s article doesn’t really explain much except that that there are a lot of crooks in the financial sector. You have to hand it to types like Buffet and the Wall Street crowd. Buffet and Sokol both claim that the resignation has nothing to do with the Lubrizol trades or that the SEC is looking in to it. They can lie with impunity these folks. “Dave’s purchases were made before he had discussed Lubrizol with me and with no knowledge of how I might react to his idea.” Buffet says in a statement released earlier this week.

Let’s think about this for a minute. Sokol is the man Buffet chooses to run his multi billion-dollar empire as he steps down. Not only that, he is described by people in the know, like the WSJ, as Buffet’s “trusted lieutenant”. And we are supposed to believe Buffet when he says that Sokol had no idea how he might respond to his suggestion. Well, they are both liars or idiots and I’m going for the former. I have some close friends that I can’t say I’m a “trusted lieutenant” to but I sure as hell know them well enough to have some idea how they might respond to a certain suggestion or issue. And Sokol? It never crossed his mind what might happen to the $10 million  he parked in Lubrizol shares if the world’s wealthiest and most famous coupon clipper bought the company?

Christ, these guys are saints.

Zweig explains this all away as human nature being unable to resist temptation. But human nature has many sides. We have the capacity to be loving and kind and act in great solidarity with one another which is why we have progressed. We can also be selfish, individualistic predatory which can cause us at times to commit acts of great savagery. Capitalism rewards the latter. Put plants in bad soil and they wilt, same with humans only the soil is the economic system of production that produces the necessities of life.

Zweig tells us Sokol’s trading goof “falls under” what securities “expert”, Stephen Bainridge, at the UCLA School of Law calls, “An enormously gray area of the law.”

Well, why is the area “enormously gray”? Murder is not enormously gray unless you're rich, then it becomes so, everything becomes so then. So the existence of this enormously gray area in the law is not an accident. The area is designed to be “enormously gray” so that deals like the one under discussion can occur, hopefully under the radar screen. As we pointed out in a previous blog, all the revisions in the tax laws haven’t closed the loopholes that allow individuals and companies to pay no taxes. Laws are written by people with the intention of defending and propagating certain class interests. This doesn’t mean that workers haven’t forced laws on to the books that codify gains already won in the streets through mass direct action that are unfavorable to capital, like Unions. But they will always find ways to nullify them legally if they can and illegally if they can’t.

Another guy described as an “ethicist” at Harvard business school (bit of an oxymoron isn’t it, ethics and Harvard business school?) says that Sokol’s action is “typical of the kinds of conflicts of interests permitted by our financial system that undermines the integrity of the markets.” Language is important as you can see. Integrity is defined as “Steadfast adherence to a strict moral or ethical code.” So the moral code is the issue; and whose code is it?. In a capitalist system of production, it is perfectly moral that some individuals who do no productive Labor accumulate great wealth off the backs of those who do and accumulate nothing. Greece was a democracy------for slave owners.

Zweig goes on to give examples of all the types of people, his type of people, like Wall Street Analysts who “accept favors” from companies they Analise I guess, and the 53% of doctors that say its ethical to take huge consulting fees from pharmaceutical companies. It’s what the “ethicist” calls a “blind spot” these folks simply have “an ethical blind spot” where an individual convinces his or herself that a conflict of interest “couldn’t possibly offer any temptation to someone of superior character---like you.” The ethicist wrote a book about it. I wonder if Zweig got paid for the mention.

"moral" view.  But our morality and theirs are two different things.

Capitalism is an economic system based on theft. It is a state of war, where competing armies enter the economic battlefield and slug it out. It emerged from the womb of Feudalism with blood on its hands from the factories of Lancashire, to the mines of South Africa and the plantations of the Caribbean and the East Indies.

When the Wall Street Journal says, Buffet is “universally” respected. We ask, among whom? Well among other thieves of course. There is honor among them and he is the champion of this group, he has managed to steal the most. He is though a product of the system, its personification as the god of surplus value.

But history is powerful innovator, like the imbecile Tsar Nicholas, Buffet and his friends will face their day in court we hope. After all, the only thing constant is change.