70 Years Later - Warren Buffett's Dad Is Proved Right (About Everything)

Tyler Durden's picture

Authored by Benjamin Weingarten, originally posted at The Blaze,

Warren Buffett has famously supported the Obama administration and other Democrats, even lending his name to the so-called “Buffett Rule,” which calls for raising income taxes on high earners. As such, it may surprise you to learn that a key person in Warren Buffett’s life was an ardent proponent of political views diametrically opposed to those of the “Oracle of Omaha.”

111 years ago today, Warren’s father Howard Homan Buffett was born in Omaha, Nebraska. Buffett, like his son Warren, worked in the investment business, but also served four terms in the U.S. House of Representatives from 1943-1949 and then again from 1951-1953, as an anti-New Dealer, anti-Fair Dealer and overall anti-interventionist of the Republican “Old Right.” Politically, it could be said that Buffett was the Ron Paul of his day.

Buffett even corresponded with leading libertarian Murray Rothbard, asking Rothbard in one letter where he might be able to procure a copy of his “The Panic of 1819,” so that he could pass it along to his son.

Unlike his son who has lauded the Federal Reserve and in particular its former chairman Ben Bernanke, along with others who intervened during and after the financial crisis of 2008, Howard Buffett was an outspoken proponent of laissez-faire economics and sound money. In a 1948 article he wrote:

Is there a connection between Human Freedom and A Gold Redeemable Money? At first glance it would seem that money belongs to the world of economics and human freedom to the political sphere.


But when you recall that one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold, you begin to sense that there may be some connection between money, redeemable in gold, and the rare prize known as human liberty.


Also, when you find that Lenin declared and demonstrated that a sure way to overturn the existing social order and bring about communism was by printing press paper money, then again you are impressed with the possibility of a relationship between a gold-backed money and human freedom…


The subject of a Hitler or a Stalin is a serf by the mere fact that his money can be called in and depreciated at the whim of his rulers…


Under such conditions [of depreciating currency] the individual citizen is deprived of freedom of movement. He is prevented from laying away purchasing power for the future. He becomes dependent upon the goodwill of the politicians for his daily bread. Unless he lives on land that will sustain him, freedom for him does not exist…

Buffett argues that the lack of a gold standard meant that Congress was unrestrained in spending money to cater to various interest groups, stating “With no bad immediate consequence it becomes expedient to accede to a spending demand. The Treasury is seemingly inexhaustible. Besides the unorganized taxpayers back home may not notice this particular expenditure — and so it goes.” Further:

Far away from Congress is the real forgotten man, the taxpayer who foots the bill. He is in a different spot from the tax-eater or the business that makes millions from spending schemes. He cannot afford to spend his time trying to oppose Federal expenditures. He has to earn his own living and carry the burden of taxes as well.


But for most beneficiaries a Federal paycheck soon becomes vital in his life. He usually will spend his full energies if necessary to hang onto this income.


The taxpayer is completely outmatched in such an unequal contest. Always heretofore he possessed an equalizer. If government finances weren’t run according to his idea of soundness he had an individual right to protect himself by obtaining gold.


With a restoration of the gold standard, Congress would have to again resist handouts. That would work this way. If Congress seemed receptive to reckless spending schemes, depositors’ demands over the country for gold would soon become serious. That alarm in turn would quickly be reflected in the halls of Congress. The legislators would learn from the banks back home and from the Treasury officials that confidence in the Treasury was endangered.


Congress would be forced to confront spending demands with firmness. The gold standard acted as a silent watchdog to prevent unlimited public spending.

Buffett ends his column with this warning:

Because of our economic strength the paper money disease here may take many years to run its course.


But we can be approaching the critical stage. When that day arrives, our political rulers will probably find that foreign war and ruthless regimentation is the cunning alternative to domestic strife. That was the way out for the paper-money economy of Hitler and others. In these remarks I have only touched the high points of this problem. I hope that I have given you enough information to challenge you to make a serious study of it.


I warn you that politicians of both parties will oppose the restoration of gold, although they may outwardly seemingly favor it. Also those elements here and abroad who are getting rich from the continued American inflation will oppose a return to sound money. You must be prepared to meet their opposition intelligently and vigorously. They have had 15 years of unbroken victory.


But, unless you are willing to surrender your children and your country to galloping inflation, war and slavery, then this cause demands your support. For if human liberty is to survive in America, we must win the battle to restore honest money.


There is no more important challenge facing us than this issue — the restoration of your freedom to secure gold in exchange for the fruits of your labors.

We’ll leave it to you to judge the merits of Buffett’s words.

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Latina Lover's picture

Were Howard Buffet alive today, he might say of his son that the apple fell very far from the tree.

Confused's picture

Well played. Just a second too late for me. 

AssFire's picture

Fuck that crony Warren Buffett.

Buys R.R. knowing his money bought both Obhole's XL pipeline veto as well as his "medal of freedom".

6x as costly and 10x as dangerous shipping that oil by rail.

SoberOne's picture

Dear Warren,


     Fuck you.





knukles's picture

Did Howard know Becky's mom?

Helvidius's picture

You mean did he know her, or did he *know* her.  Makes a big difference.

Elvis the Pelvis's picture

The real problem is demographics.  The world is teeming with aging baby-boomers who need the government to pay for their diapers.  All the money's gone, and there's nowhere to go.  Bitchez.

BigJim's picture

Warren is to Howard what Rand is to Ron.

Bay of Pigs's picture

Ditto for his buddy Charlie "the Fucktard" Munger

SoberOne's picture

Mr. Barbarous Relic himself.

Vampyroteuthis infernalis's picture

We need to tell Munger to "suck it up"!!

Ness.'s picture

We need to dig a hole for Munger.  

Relentless101's picture

"Sound money" just makes sense to me. Yet it has never been a priority in my lifetime. By the time it again becomes important, it will be too late.

aminorex's picture

We are doing it with bitcoin, while most punters just whinge.

shouldvekilledthem's picture

Bitcoin is the first "sound" digital money.

Built by the peasants for the peasants.

N2OJoe's picture

And backed by nothing but faith in itself. Sound indeed...

funthea's picture

And no more unique than the infinite number of alt coins you could create with the exacte same properties. Most bitcoiners fail to grasp this concept. In their utopian end game view, bitcoin to the moon... however, why would I play with bitcoin at $10k when I could jump on an alt coin at the ground floor. And even then, once an infinate number of alt coins compete, you have infinate dilution of value. Usefull in aplication, but useless as a store of value.

TheRedScourge's picture

You can try to jump in on the ground floor of some altcoin, but what if it never takes off? That has much higher risk than Bitcoin, and most rational people can and do recognize that.

The difference between the altcoins and Bitcoin itself is that the altcoins have to actually win acceptance to gain in value, which means they have to offer vastly better features than Bitcoin to justify that, and since Bitcoin is already "pretty good" and pretty popular, Bitcoin is light years ahead of the others, and will be the beneficiary of the "network effect". The value comes entirely from demand and circulation, as the supply of Bitcoin is nearly fixed, and the demand of the others is not, in that more can be created, and the risk in the others is largely unknown whereas Bitcoin has been around for a while now, most of the altcoins will never have much of an impact. Most of the others will not take off, costing speculators lots of money, and will act to level out the normal boom and bust cycles, by constantly weeding out the greedy and gullible.


The only real problem comes in if Bitcoin is one day obsoleted, and everyone tries to get out of it at once and into some new coin, they will realize nobody wants to take them off their hands, and the value will drop to zero. However, it may be argued that the rate of loss of wealth that occurs here might be dwarfed by the constant rate of inflation that centralized fiat currencies always seem to experience.

goneYonder's picture

The faith in gold is also completely subjective. That being said, I think I'll go with the 5,000 year history on this one.

TheRedScourge's picture

Better than faith in the present system, and better than things that can be punted by derivatives and notes.

Supafly's picture

It's like the 3 generation rule:

First- work hard, gather fruit

Second- eat fruit

Third- starve

How are Warren's kids doing anyway?

greatbeard's picture

>> How are Warren's kids doing anyway?

Warren's son is a pretty cool guy.  He's a farmer who's into teaching the poor how to farm without being obligated to agribusiness.  Just the opposite of shitbags like the Gates.

Supafly's picture

As soon as I posted, I knew what I said was flawed.  But if we were talking about the Hilton's...

TheRedScourge's picture

"From shirtsleeves to shirtcollars to shirtsleeves in 3 generations."

Vendetta's picture

Warren has crapped on the memory of his father, he should be ashamed.

Freddie's picture

His son is a Satanic as*hole.

Seize Mars's picture

Warren Buffet got threatened by the Men In Black with some SEC bullshit. (Anyone want to help me find the news story? I'm running on memory here.) Right after he plea bargained, suddenly he is one Righteous Statist Dude. Righteous. I'm assuming they used the carrot and stick in combination.


Relentless101's picture

Are you talking about the shit show with Salomon?

Atlas_shrugging's picture

Perhaps the Sokol / Lubrizol fiasco... nothing ever happened there and 2 weeks later he was Obama's hand puppet, ignoring the double taxation of dividends in his garbage argument against a 15% tax rate and this stupid "buffett rule"

ChooChoo's picture

Ain't it always the story? 
Whoever isn't with us is against us? good ol george bush jr ;ppp 

Confused's picture

So in some cases, the apple DOES fall far from the tree? 



RaceToTheBottom's picture

Apparently the Baby Buffett learned pretty well how to profit from the panic.

The Baby Buffett continues too eat the buffet very well at the Government trough.



NOTaREALmerican's picture

Who can doubt a PATRIOT who says:  Never bet against Merica?

(Cue:  Slow motion eagle flying in front of a slow motion flag waving behind a slow-motion Uncle Warren;  and worshipping peasants worshiping the slow-motion images with slow-motion tears in their eyes)

royal's picture

The Gold standard will be brought back out of necessity.


jmcadg's picture

Warren Buffet was very much behind his dad's thinking, he had a huge physical silver position, until he was 'forced' to give it up.

Not My Real Name's picture

Off topic: Lending in China practically stopped in July -- down 86% from June.

From Breitbart: "The collapse in Chinese credit from $320 billion in June to $44.3 billion in July is causing panic across the nation ..."


Kaiser Sousa's picture

one of my favorite essays...
i use it all the time in speaking with the non-believers, brainwashed and lost ones...

and they still refuse the light...

TVP's picture

They will go to their graves before they accept reality.  Implicit acceptance of the leaders' illusions runs rampant among the psychotic herd.  


Stop wasting your energy attempting to "wake people up".


It only serves as a divide & conquer tactic, utilized best by provocateurs like Alex Jones

Seasmoke's picture

I've tried. Gotten pissed off. And have given up trying any more. 


At parties. I basically say buy Gold or Silver or die, I don't care. Where's the beer ?

Ewtman's picture

No August Elliott Wave Gold update available yet, but this July chart is still on track...


ebworthen's picture

"Far away from Congress is the real forgotten man..."

Raises hand.

Z_End's picture

Yeahhh Warren was definately adopted...

GooseShtepping Moron's picture

I was watching Charlie Rose the night Warren Buffet announced that he would be donating his entire fortune to the Bill and Melinda Gates foundation upon the event of his death. After I recovered from the shock, I concluded that the "Oracle of Omaha" knew nothing about reality, didn't have a prudent bone in his body, and must have acquired his wealth through fortunate birth and accident. From then on I've ignored everything he had to say.

NOTaREALmerican's picture

Re:  After I recovered from the shock

What's he supposed to do with his money "upon the event of his death"?  He'll be dead.