Buffett Takes Some Anti-Hypocrisy Pills, Realizes Subsidies Are Actually Bad

The man who has benefited more from governmental subsidies for financial companies (which also happen to comprise his core investments) than anyone else, Warren Buffett, has decided to cry foul and complain to the SEC over what is quickly becoming a war in the news wire world. Turns out, his Business Wire firm, which is one of the top two distributors of official news and information from public companies, has realized that subsidies are actually not all that cool, especially when one is not on the receiving end of wasteful capital spending. As a result Buffett has come to the brilliant conclusion: "Business Wire contends that subsidization would be anti-competitive." We wonder how long it will take before Mr. Buffet concludes the obvious - that government subsidization of his pet Wall Street firm Goldman Sachs has very much the same anti-competitive results? We are not holding our breath. Warren has once again proven that while the word hypocrite may be a tad strong in describing him, it does serve quite well.

In an article earlier, Securities Industries news reports:

Nasdaq OMX Group has proposed revising and increases several types of fees to apply for and maintain listings on its Nasdaq exchange in the United States, including a annual fee that will levy an additional $5,000 annually on approximately 75% of its listed companies and fee increases applicable to listing ADRs that will range from $8,775 to $20,000.

Business Wire alleges that Nasdaq seeks the fee increases to cover unspecified cost increases while it is attempting to attract new listings “by offering millions of dollars in ‘free’ information dissemination services bundled into the listing fee.”

One of those services is GlobeNewswire, which Nasdaq acquired in 2006. GlobeNewswire competes with Business Wire in putting out press releases, investor communications, photos, and regulatory filings for publicly traded companies.

But BusinessWire and PR Newswire are the giants in the field, splitting more than 80% of the market. BusinessWire is a wholly owned subsidiary of Berkshire Hathaway, the corporate holding company headed by billionaire Omaha investor Warren Buffett.

Business Wire says the fee increases are “apparently intended to help subsidize” ancillary services that it bundles into its listing service to lure companies away from rival exchanges. “Business Wire strongly believes the public interest would be best served if either the Justice Department or SEC investigate this before the SEC rules on Nasdaq’s proposal,” said Roger Myers, attorney for Business Wire and partner at Holme Roberts & Owen LLLP.

Oh really Warren? In turn, Zero Hedge, and the broader American public strongly believes that the public interest would be best served if either the Justice Department or SEC investigates Goldman Sachs (and other remnant Wall Street firms) for comparable anti-competitive practices before you are allowed to extract even one cent of equity from your numerous investments in both Goldman Sachs and all other firms currently benefiting from generous and seemingly endless government subsidies.

We have forwarded this post to Christine Varney at the Justice Department.