Warren Buffet Op-Ed and Video (Tax the Super Rich)

So Warren Buffett has come out and said that the government needs to tax the super rich more. He expressed this in a NY Times Op-Ed and did a lengthy interview on Charlie Rose on the topic.

This is clearly an Obama-driven PR move. Buffett is a close advisor to Obama, perhaps his closest in the private sector when it comes to economic matters. He has been advising the president since he took office. I think one of the first meetings Obama had upon being elected was with Buffett.

This move by Obama is both a good and bad PR move.

One of the most powerful PR resources you have is customer endorsements. When customers come out and say they love your product, it provides significant strength to your messaging.

In this case, when Buffett comes out and says the rich should be taxed more and that the US has a billionaire-friendly congress, it opens the door for Obama to start taking a hardline stance on increasing taxes on the rich. It's hard to argue that you shouldn't increase taxes on the rich when the rich themselves (or at least one of them) are saying you should.

So on that front, trotting out Buffett to prime the pump for your messaging strategy is brilliant.

It's a bad PR move at the same time though. The reason is that taxing the rich is not the problem. Yes, it panders to the populous anger that there are some with so much while others have so little, but you can increase taxes on the rich and that will still be the case, it won't change the day-to-day reality of the world around us.

The issue is not the taxes rich people pay (and I agree they should pay more), but rather the fact that they are super rich. The fact that 400 Americans possess as much wealth as the bottom 150 million Americans combined is the real problem as society is clearly becoming unbalanced wherein there are a handful of BIG winners and millions of little-guy losers.  Arguing over taxes misses the real issue, which is why are so few 'winning' while so many are 'losing'.

Even if you argue that some people are simply failures in life (a view I don't subscribe to) and as such end up poor through their own doing, then you have to address how does a society sustain itself with 150 million 'failures'.

It's not complicated how we got in to this mess (and none of the reasons have to do with taxes). Some of the top reasons include:

• Buying products from China based on slave / sweatshop labor (killing domestic manufacturing jobs while endorsing slave labor)
• Educating millions of youth only to then not ensure a place for them in the workforce (a massive failure to allocate operational resources effectively)
• Allowing markets to exist as monopolies, duopolies and oligopolies (driven by economy of scale and policy lobbying to prevent emerging domestic competition, while encouraging off-shore foreign labor competition)
• Decision making based on greed over morality (this is where predatory lending and a debt society comes from; it's also the logic behind the stock market and returning value to shareholders at all costs)

None of these variables are unique in history, in fact they are the norm and the reasons behind why power and wealth end up in the hands of a few. And the rationale behind them are often times based on good intentions, creating cheaper goods, increasing the value of 401ks, increasing the pace of innovation through scale, etc. - unfortunately, over time, good intentions often have unintented consequences.

If you really wanted to create a 'sustainable' society, you would:

• Integrate new grads into the work force more effectively
• Stop buying goods produced by slave labor (the reason your shirt costs 10 dollars is because some person in China is working 16 hours a day for 2 dollars)
• Do not let markets become oligopolies
• Make decisions based on the 'greater good' versus what only the powerful and wealthy want

In essence, return to what America use to be about.

But no one wants to make those changes. No politicians wants to deal with trade deficits that cause the price of goods to go up. No politician wants to alienate their (rich) donors (often corporations themselves) that seed their campaign coffers. No politician wants to tackle the effects of a stock market system that emphasizes the endless pursuit of profits over sustainability.

So instead, it all gets boiled down to 'Tax the Rich', when in reality taxes have almost nothing to do with what we are seeing in the world today.

It's bad PR on Buffett and Obama's part because it's yet another side show. A manufactured issue to garner populous support. It's tantamount to a group of cancer patients arguing that one group of patients are getting better hospital meals than the other group. While it may be true, it's utterly irrelevant to what matters, which is curing all the patients of cancer.

It will be interesting to see if this 'anti-rich' messaging works for Obama. I don't think it will over the long haul (although the Republican's 'pro rich' stance is just as bad and just as illogical). Too many people are beginning to realize that taxes aren't the problem, the real problem is rooted in a system that has neglected its own sustainability and is suffering from a 'death by a thousand cuts'. It's the millions of bad decisions made over the past couple of decades that is the problem, not taxes.

Until you address the issue of sustainability and accountability you can't fix things. That's what Buffett and Obama should be focused on in their messaging, but clearly 'tax the rich' won out as the most simple way to garner popular support (with Obama's focus clearly now shifting towards the 2012 elections).