6 ms·

Funny. Buffett certainly didn't mind a little coddling in 2008. He was arguably one of the largest individual beneficiaries of bailouts which shifted ungodly am

Funny. Buffett certainly didn't mind a little coddling in 2008. He was arguably one of the largest individual beneficiaries of bailouts which shifted ungodly amounts of toxic debt from failed private institutions to taxpayers. See http://blogs.reuters.com/rolfe-winkler/2009/08/04/buffetts-betrayal/ http://blogs.reuters.com/rolfe-winkler/2009/08/04/buffetts-b.... While it's now mighty generous of Buffett to invite the government to increase his taxes, he could spare us another (http://www.cnbc.com/id/40229527/Warren_Buffett_s_Letter_to_Uncle_Sam http://www.cnbc.com/id/40229527/Warren_Buffett_s_Letter_to_U...) nauseating and embarrassing New York Times op-ed and instead put his money where his mouth is. As another poster has noted, the Treasury will gladly cash Buffett's check (http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm).

MikeCapone 15y ago
The whole financial system and everybody that depends on it was a beneficiary of the bailouts. If everything collapsed, everybody would have suffered. Buffett just happens to own a bigger slice of the market than almost anyone, so of course he benefited significantly. But singling him out, especially since he's stayed away from wall street's games and made extraordinary efforts to keep things above board for decades, is totally unfair.
- danenania 15y ago
  "The whole financial system and everybody that depends on it was a beneficiary of the bailouts. If everything collapsed, everybody would have suffered." A narrative convenient for powerful banks that was created by powerful banks and allied politicians. People have suffered and continue to suffer because of the crimes these institutions have committed. Propping up their corpses only helps the criminals who created the situation. Clearing out bad businesses so that new ones can take their place is a central pillar of capitalism. If you really believe a bunch of billionaires who claim the world's going to end if they lose their billions, well, you're gullible at best. Far from forestalling suffering, the continued operation of these entities and their influence on legislation perpetuates it. Their collapse is the best thing we could hope for, even if it causes short term turbulence.
  - MikeCapone 15y ago
    That all sounds very good, but I'm sorry to say that without a banking system, everything in our society stops working, and the small guy would get hurt a lot more than billionaires.
    - danenania 15y ago
      Without a banking system? The idea is to have a banking system that works and follows the law and doesn't require trillions in handouts to stay solvent, not no banking system.
      - MikeCapone 15y ago
        I totally agree. But that wasn't the choice that people were faced with in 2008.
    - deleted 15y ago
      [deleted]
  - Locke1689 15y ago
    The entire US financial system is based on credit and liquidity. Clearly something had to be done. Do I agree that the bailout was the best way to do that? No. But a timely bad plan was better than an untimely good one. By the way, the argument that nothing needed to be done is opposed to practically every economics departments' opinion in the country. Maybe you know more about economics than we all guessed, but I think it's time you show a PhD instead of arm-chairing here.
    - danenania 15y ago
      The something that clearly needed to be done was to make the perpetrators pay for the damages of their crimes, not the victims. If the US financial system collapsed, there would be a deflationary shock and the short term high unemployment associated with an economic realignment, but the country would be much healthier financially in the long term. Instead the crisis is simply being dragged out, with the inevitable day of reckoning certain to be much worse because of it. The amount of money the US has pumped into its corrupt financial system is enough to put its entire population on welfare for years. A sane approach would have been to let the banks fail, let the markets tank, and ease the transition as needed with bottom-up debt relief and aid.
- steins 15y ago
  Prehaps they all benefited, but it seems as if the bailouts benefited the most irresponsible people far more than the rest of society. The banks should have been allowed to fail. The only reason capitalism works is by providing a huge incentive to do things right. Bailouts like these will convince companies they can get away with the same thing in the future.
  - rhizome 15y ago
    Get away with it? Heck, it's now a dependable feature of the US economy. A guarantee.
  - MikeCapone 15y ago
    People talk as if shareholders in companies like AIG and Citi escape scot free. Citi is down 93% and AIG is down 98%. The point was that you didn't have a domino effect that took down the whole world economy (no industry that is bigger than a corner store can function without a banking system). Throwing out the baby with the bathwater just so you can punish some people is counterproductive.
- TheSkeptic 15y ago
  You should do your research before making statements like "especially since he's stayed away from wall street's games and made extraordinary efforts to keep things above board for decades." Buffett didn't sit idly by while his holdings were threatened. He lobbied for, and supported, bailouts. Not content with bailouts of companies he owned large stakes in, he made sweetheart deals to invest in Goldman Sachs and GE knowing what was going to happen. Have you ever explored those? If his GS and GE investments aren't convincing enough, here are a few choice examples of the Oracle of Omaha's hypocrisy: 1. While he promotes higher tax rates for high-earning individuals, he lobbied against a tax that would have sought to recoup TARP losses from bailed-out banks (see http://abcnews.go.com/Business/buffett-bank-tax-higher-rich-guy-taxes/story?id=9613127 http://abcnews.go.com/Business/buffett-bank-tax-higher-rich-...). 2. Buffett once famously warned that derivatives were deadly, but when it came time to put his money where his mouth was, he lobbied against proposed derivatives regulations that would have cost Berkshire billions (see http://www.independent.co.uk/news/business/news/buffett-lobbies-against-clampdown-on-derivatives-1955260.html http://www.independent.co.uk/news/business/news/buffett-lobb...). 3. In 2010, Buffett once defended the ratings agencies (see http://www.wnyc.org/articles/wnyc-news/2010/jun/03/buffett-defends-credit-ratings-agencies-at-congressional-hearing/ http://www.wnyc.org/articles/wnyc-news/2010/jun/03/buffett-d...), but apparently he's only willing to defend them so long as they agree with him (see http://www.foxbusiness.com/markets/2011/08/05/buffett-to-fbn-sp-downgrade-doesnt-make-sense/ http://www.foxbusiness.com/markets/2011/08/05/buffett-to-fbn...). Bottom line: whatever one may have once thought about Warren Buffett, his actions over the past several years make it clear he is no investor, he is a corporatist. And quite a successful one at that.
  - gareim 15y ago
    I only had time to skim the first article (getting late here), but I agree with Buffett's reasoning on the TARP issue. If the banks DID pay back their debt, then why should they be the ones taxed? He's not saying that industries shouldn't be taxed to cover losses, he's saying that the government should go after specific industries (like the auto industry) that aren't performing as well as they should be. Chase, if I remember correctly, was very good about repaying their loans on time. Now why should they be punished for that? Oh, and Warren Buffett plans on donating the vast majority of his wealth away upon his death, so I usually give him the benefit of the doubt and believe that his suggestions are intended to improve the economy as a whole rather than build up wealth. What's it matter to him if he makes or loses another billion when he's giving it away in the end? Nah, I think he's a good guy.
- rhizome 15y ago
  If everything collapsed, everybody would have suffered. Citation needed. There would still be demand that needed supplying, no? Some non-criminal companies would have happily stepped up to fill that void.
  - nessus42 15y ago
    Citation needed. http://en.wikipedia.org/wiki/Great_Depression#Demand-driven http://en.wikipedia.org/wiki/Great_Depression#Demand-driven
  - MikeCapone 15y ago
    I don't think you understand how everything is plugged into the credit markets and banking systems. I suggest you read Sorkin's book a as starting point.
  - SoftwareMaven 15y ago
    Given how much of everything moves based on short-term credit, it is unlikely anybody would have been able to step in before the economy imploded. The credit crunch was not about being able to get funds to build a new building, it was about being able to get funds to ensure the shipment of raw parts was sent (taken recursively through the entire supply chain all the way to your local retail outlet). If that had seized, it would have been far worse than the bailouts. Unfortunately, there should have been at least civil penalties (and probably criminal pentalies) associated with building and hiding enough toxic assets to tank the banking system. The real travesty was not the bailout, it was that there were no negative consequences (relatively speaking) to the people who caused it (which is a tough question to answer, but not enough effort was made, IMO).
j_baker 15y ago
Our deficit is $14.6 trillion. TARP, which cost ~$80 billion (with still more to be paid back), is a rounding error in that deficit. Changing tax rates would have a much bigger impact on the deficit. http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#Protection_of_taxpayer_investment http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#P...
- swaits 15y ago
  You're confusing deficit and debt.
- tapp 15y ago
  > Our deficit is $14.6 trillion. Just in the interest of precision: it's actually our national debt which is approximately 14.6 trillion. Our deficit this year will be closer to 1.5T. http://www.cbo.gov/doc.cfm?index=12039 http://www.cbo.gov/doc.cfm?index=12039 Not that they aren't both mind-boggling numbers
  - j_baker 15y ago
    I was thinking about the cumulative 10-year deficit. I swear I've heard the number $14.6 trillion somewhere, but maybe I'm thinking of the debt. At any rate, I wasn't that far off. From the link you gave: By 2021, the budget deficit would be about double the baseline projection, and with cumulative deficits totaling nearly $12 trillion over the 2012–2021 period, debt held by the public would reach 97 percent of GDP, the highest level since 1946. Adding in this year's deficit, it comes out to $13.5 trillion.
- danenania 15y ago
  TARP is a rounding error all right--compared to the $16 trillion the Federal Reserve has provided to private banks behind the scenes. TARP was just political theater. http://www.rawstory.com/rs/2011/07/21/audit-fed-gave-16-trillion-in-emergency-loans/ http://www.rawstory.com/rs/2011/07/21/audit-fed-gave-16-tril...
  - Locke1689 15y ago
turar 15y ago
Buffett is working for his shareholders to increase the value of their investment in Berkshire Hathaway in the best possible way. Personally though, he already gave away most of his wealth to philanthropy via Gates Foundation.
- MikeCapone 15y ago
  99%+ of his wealth is in Berkshire, though, so the better Berkshire does, the more billions will go to Gates and a few other foundations (mostly run by his kids).
  - turar 15y ago
    Yes. Gates Foundation works on various philanthropic causes, notably global health issues.

MikeCapone 15y ago

The whole financial system and everybody that depends on it was a beneficiary of the bailouts. If everything collapsed, everybody would have suffered. Buffett just happens to own a bigger slice of the market than almost anyone, so of course he benefited significantly. But singling him out, especially since he's stayed away from wall street's games and made extraordinary efforts to keep things above board for decades, is totally unfair.

danenania 15y ago
"The whole financial system and everybody that depends on it was a beneficiary of the bailouts. If everything collapsed, everybody would have suffered." A narrative convenient for powerful banks that was created by powerful banks and allied politicians. People have suffered and continue to suffer because of the crimes these institutions have committed. Propping up their corpses only helps the criminals who created the situation. Clearing out bad businesses so that new ones can take their place is a central pillar of capitalism. If you really believe a bunch of billionaires who claim the world's going to end if they lose their billions, well, you're gullible at best. Far from forestalling suffering, the continued operation of these entities and their influence on legislation perpetuates it. Their collapse is the best thing we could hope for, even if it causes short term turbulence.
- MikeCapone 15y ago
  That all sounds very good, but I'm sorry to say that without a banking system, everything in our society stops working, and the small guy would get hurt a lot more than billionaires.
  - danenania 15y ago
    Without a banking system? The idea is to have a banking system that works and follows the law and doesn't require trillions in handouts to stay solvent, not no banking system.
    - MikeCapone 15y ago
      I totally agree. But that wasn't the choice that people were faced with in 2008.
  - deleted 15y ago
    [deleted]
- Locke1689 15y ago
  The entire US financial system is based on credit and liquidity. Clearly something had to be done. Do I agree that the bailout was the best way to do that? No. But a timely bad plan was better than an untimely good one. By the way, the argument that nothing needed to be done is opposed to practically every economics departments' opinion in the country. Maybe you know more about economics than we all guessed, but I think it's time you show a PhD instead of arm-chairing here.
  - danenania 15y ago
    The something that clearly needed to be done was to make the perpetrators pay for the damages of their crimes, not the victims. If the US financial system collapsed, there would be a deflationary shock and the short term high unemployment associated with an economic realignment, but the country would be much healthier financially in the long term. Instead the crisis is simply being dragged out, with the inevitable day of reckoning certain to be much worse because of it. The amount of money the US has pumped into its corrupt financial system is enough to put its entire population on welfare for years. A sane approach would have been to let the banks fail, let the markets tank, and ease the transition as needed with bottom-up debt relief and aid.
steins 15y ago
Prehaps they all benefited, but it seems as if the bailouts benefited the most irresponsible people far more than the rest of society. The banks should have been allowed to fail. The only reason capitalism works is by providing a huge incentive to do things right. Bailouts like these will convince companies they can get away with the same thing in the future.
- rhizome 15y ago
  Get away with it? Heck, it's now a dependable feature of the US economy. A guarantee.
- MikeCapone 15y ago
  People talk as if shareholders in companies like AIG and Citi escape scot free. Citi is down 93% and AIG is down 98%. The point was that you didn't have a domino effect that took down the whole world economy (no industry that is bigger than a corner store can function without a banking system). Throwing out the baby with the bathwater just so you can punish some people is counterproductive.
TheSkeptic 15y ago
You should do your research before making statements like "especially since he's stayed away from wall street's games and made extraordinary efforts to keep things above board for decades." Buffett didn't sit idly by while his holdings were threatened. He lobbied for, and supported, bailouts. Not content with bailouts of companies he owned large stakes in, he made sweetheart deals to invest in Goldman Sachs and GE knowing what was going to happen. Have you ever explored those? If his GS and GE investments aren't convincing enough, here are a few choice examples of the Oracle of Omaha's hypocrisy: 1. While he promotes higher tax rates for high-earning individuals, he lobbied against a tax that would have sought to recoup TARP losses from bailed-out banks (see http://abcnews.go.com/Business/buffett-bank-tax-higher-rich-guy-taxes/story?id=9613127 http://abcnews.go.com/Business/buffett-bank-tax-higher-rich-...). 2. Buffett once famously warned that derivatives were deadly, but when it came time to put his money where his mouth was, he lobbied against proposed derivatives regulations that would have cost Berkshire billions (see http://www.independent.co.uk/news/business/news/buffett-lobbies-against-clampdown-on-derivatives-1955260.html http://www.independent.co.uk/news/business/news/buffett-lobb...). 3. In 2010, Buffett once defended the ratings agencies (see http://www.wnyc.org/articles/wnyc-news/2010/jun/03/buffett-defends-credit-ratings-agencies-at-congressional-hearing/ http://www.wnyc.org/articles/wnyc-news/2010/jun/03/buffett-d...), but apparently he's only willing to defend them so long as they agree with him (see http://www.foxbusiness.com/markets/2011/08/05/buffett-to-fbn-sp-downgrade-doesnt-make-sense/ http://www.foxbusiness.com/markets/2011/08/05/buffett-to-fbn...). Bottom line: whatever one may have once thought about Warren Buffett, his actions over the past several years make it clear he is no investor, he is a corporatist. And quite a successful one at that.
- gareim 15y ago
  I only had time to skim the first article (getting late here), but I agree with Buffett's reasoning on the TARP issue. If the banks DID pay back their debt, then why should they be the ones taxed? He's not saying that industries shouldn't be taxed to cover losses, he's saying that the government should go after specific industries (like the auto industry) that aren't performing as well as they should be. Chase, if I remember correctly, was very good about repaying their loans on time. Now why should they be punished for that? Oh, and Warren Buffett plans on donating the vast majority of his wealth away upon his death, so I usually give him the benefit of the doubt and believe that his suggestions are intended to improve the economy as a whole rather than build up wealth. What's it matter to him if he makes or loses another billion when he's giving it away in the end? Nah, I think he's a good guy.
rhizome 15y ago
If everything collapsed, everybody would have suffered. Citation needed. There would still be demand that needed supplying, no? Some non-criminal companies would have happily stepped up to fill that void.
- nessus42 15y ago
  Citation needed. http://en.wikipedia.org/wiki/Great_Depression#Demand-driven http://en.wikipedia.org/wiki/Great_Depression#Demand-driven
- MikeCapone 15y ago
  I don't think you understand how everything is plugged into the credit markets and banking systems. I suggest you read Sorkin's book a as starting point.
- SoftwareMaven 15y ago
  Given how much of everything moves based on short-term credit, it is unlikely anybody would have been able to step in before the economy imploded. The credit crunch was not about being able to get funds to build a new building, it was about being able to get funds to ensure the shipment of raw parts was sent (taken recursively through the entire supply chain all the way to your local retail outlet). If that had seized, it would have been far worse than the bailouts. Unfortunately, there should have been at least civil penalties (and probably criminal pentalies) associated with building and hiding enough toxic assets to tank the banking system. The real travesty was not the bailout, it was that there were no negative consequences (relatively speaking) to the people who caused it (which is a tough question to answer, but not enough effort was made, IMO).

j_baker 15y ago

Our deficit is $14.6 trillion. TARP, which cost ~$80 billion (with still more to be paid back), is a rounding error in that deficit. Changing tax rates would have a much bigger impact on the deficit. http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#Protection_of_taxpayer_investment http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#P...

swaits 15y ago
You're confusing deficit and debt.
tapp 15y ago
> Our deficit is $14.6 trillion. Just in the interest of precision: it's actually our national debt which is approximately 14.6 trillion. Our deficit this year will be closer to 1.5T. http://www.cbo.gov/doc.cfm?index=12039 http://www.cbo.gov/doc.cfm?index=12039 Not that they aren't both mind-boggling numbers
- j_baker 15y ago
  I was thinking about the cumulative 10-year deficit. I swear I've heard the number $14.6 trillion somewhere, but maybe I'm thinking of the debt. At any rate, I wasn't that far off. From the link you gave: By 2021, the budget deficit would be about double the baseline projection, and with cumulative deficits totaling nearly $12 trillion over the 2012–2021 period, debt held by the public would reach 97 percent of GDP, the highest level since 1946. Adding in this year's deficit, it comes out to $13.5 trillion.
danenania 15y ago
TARP is a rounding error all right--compared to the $16 trillion the Federal Reserve has provided to private banks behind the scenes. TARP was just political theater. http://www.rawstory.com/rs/2011/07/21/audit-fed-gave-16-trillion-in-emergency-loans/ http://www.rawstory.com/rs/2011/07/21/audit-fed-gave-16-tril...
- Locke1689 15y ago

turar 15y ago

Buffett is working for his shareholders to increase the value of their investment in Berkshire Hathaway in the best possible way. Personally though, he already gave away most of his wealth to philanthropy via Gates Foundation.

MikeCapone 15y ago
99%+ of his wealth is in Berkshire, though, so the better Berkshire does, the more billions will go to Gates and a few other foundations (mostly run by his kids).
- turar 15y ago
  Yes. Gates Foundation works on various philanthropic causes, notably global health issues.