Warren Buffett, of course, is a great investor, but a lot of what he does, particularly these days, has a political message as well.
He has wholeheartedly supported President Obama’s economic agenda of higher spending and higher taxes on wealth creators to pay for the welfare state both he and the president envision.
He even allowed the president to use him as a political prop and put the Buffett name on a new tax that won’t raise much revenue but may win the president a few more votes as he fights for re-election.
Which is why the last thing he wants to do is explain that his move isn’t a bet against all bonds but just some of those in areas that have adopted the same misguided fiscal policies both he and the president are advocating on a national level.
Yes, states and cities face daunting economic challenges: high, unfunded pensions, dwindling tax revenues and (particularly here in New York) a continued addiction to debt to pay our bills. But when you look at the stats, bond defaults, outside a few instances, are rare, and you can make a good case that places have weathered the country’s economic malaise by rejecting the very core of Obamanomics.