Warren Buffett is, like so many in the moneyed progressive pantheon, a hypocrite. Simple as that.
I’m not talking about his disingenuous comparison of capital gains to earned income, where he complains that he pays 19% on his returns compared to the 30ish percent that his secretary pays on her income. As if he couldn’t find the box on his tax form where, if he cared so much, he is allowed to pay more taxes than the law requires.
(Fellow billionaire progressive George Soros has the same problem – to the extent that he even pays taxes that he wants raised on everyone else. Come to think of it, what is it about the left that they constantly want taxes raised, but they don’t pay their own tax bills?)
No, sorry, I started spinning out. We’re talking about Buffett and his posturing as a progressive friend of the working class, when in fact he’s one of the few but verifiable merchants who make their money off the backs of the poor through his Clayton Homes operation.
In this instance, we’re talking about people who live in mobile homes.
The Seattle Times initially broke this story wide open:
After years of living in a 1963 travel trailer, Kirk and Patricia Ackley found a permanent house with enough space to host grandkids and care for her aging father suffering from dementia.
So, as the pilot cars prepared to guide the factory-built home up from Oregon in May 2006, the Ackleys were elated to finalize paperwork waiting for them at their loan broker’s kitchen table.
But the closing documents he set before them held a surprise: The promised 7 percent interest rate was now 12.5 percent, with monthly payments of $1,100, up from $700
The terms were too extreme for the Ackleys. But they’d already spent $11,000, at the dealer’s urging, for a concrete foundation to accommodate this specific home. They could look for other financing but desperately needed a space to care for her father.
Kirk’s construction job and Patricia’s Wal-Mart job together weren’t enough to afford the new monthly payment. But, they said, the broker was willing to inflate their income in order to qualify them for the loan.
“You just need to remember,” they recalled him saying, “you can refinance as soon as you can.”
To their regret, the Ackleys signed.
The disastrous deal ruined their finances and nearly their marriage. But until informed recently by a reporter, they didn’t realize that the homebuilder (Golden West), the dealer (Oakwood Homes) and the lender (21st Mortgage) were all part of a single company: Clayton Homes, the nation’s biggest homebuilder, which is controlled by its second-richest man — Warren Buffett.
Buffett’s mobile-home empire promises low-income Americans the dream of homeownership. But Clayton relies on predatory sales practices, exorbitant fees, and interest rates that can exceed 15 percent, trapping many buyers in loans they can’t afford and in homes that are almost impossible to sell or refinance, an investigation by The Seattle Times and Center for Public Integrity has found.
Read the full story here.
I don’t begrudge anyone an honest buck, no matter how many they accumulate. People need to live with the consequences of their own bad decisions, so long as there’s full disclosure and no fraud. Caveat emptor and devil take the hindmost are the laws of nature and should be the laws of man.
But this – this is rank hypocrisy. When you’re charging almost 7 percentage points above the typical home loan, don’t pose as defender of the working man.