The Huffington Post
By Zachary Karabell
January 26, 2012
One of the pillars of President Obama’s State of the Union address was the invocation of Warren Buffett as a voice of reason crying out in the wilderness of tax insanity. Obama echoed Buffett in saying that no billionaire should pay a lower tax rate than a secretary and demanded that a form of the “Buffett Rule” be passed by Congress that raises the tax rate to at least 30 percent on anyone earning more than $1 million a year.
Buffett has been riding waves of popular admiration for years, but his current incarnation as Wall Street man of the people has catapulted him even further into the heroic stratosphere. Yet there is something odd about the president of the United States holding him up as an icon of the better angels of Wall Street, because on Wall Street, Buffett’s reputation is not that of a straightforward, honest man of Omaha calling it as he sees it and doing the right thing in matters financial and communal. It is rather of a wily and extremely tough investor who uses both his outsized reputation and his billions of Berkshire Hathaway money to strike deals that no individual or indeed institution could ever hope to emulate.
Among the many faithful who own Berkshire stock or who gather in Omaha for a few days every year for its annual meeting, among those who have listened to Buffett’s pithy sayings on investing, invoking the value style originally promulgated by Benjamin Graham and David Dodd, Buffett is the sage who only buys what he understands and appreciates true value. His philanthropic largesse has added to his luster. And he seemed ever more prescient in the aftermath of the 2008 financial crisis, given that he had long expressed scorn and distrust for derivatives and for the elaborate financial engineering—and chicanery—that those derivatives enabled.