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Home Publications Blogs Beat the Press Warren Buffet Boasts About the Billions the Government Gave Him Through TARP

Warren Buffet Boasts About the Billions the Government Gave Him Through TARP

Wednesday, 17 November 2010 05:01

Warren Buffet has a thank you note in the NYT. He certainly owes a big thanks to the taxpayers, after all he put a $10 billion bet on Goldman Sachs at the peak of the crisis. Without our help, he would have lost his whole bet.

Of course the issue is not as he presents it here. The question was not whether or not the government did something to keep the financial system functioning. The question was whether the rescue would save investors like Buffet, who were knowingly taken big risks with their money, the highly paid executives of the major banks, and preserve the speculative culture of Wall Street. 

That's what TARP was about. Mr. Buffet has very good grounds to be thankful that the rescue was structured to make preserving the wealth of the wealthy the top priority. The 25 million unemployed and underemployed people may feel differently.

Comments (9)Add Comment
trickle across?
written by frankenduf, November 17, 2010 8:26
nonsense- buffett is gonna give his entire fortune away!- to bill gates... doh!
written by izzatzo, November 17, 2010 8:33
From the NYT article, this quote by Buffett:
Only one counterforce was available, and that was you, Uncle Sam. Yes, you are often clumsy, even inept. But when businesses and people worldwide race to get liquid, you are the only party with the resources to take the other side of the transaction. And when our citizens are losing trust by the hour in institutions they once revered, only you can restore calm.

Funny how that works. When George Soros bets against a government's currency and gets rich off the outcome, he's paraded around as commie scum, but when Buffett effectively milks the government in the same way, he comes off as a hero, and from this editorial a sentimentalized sanctimonious one at that.
written by rglvr, November 17, 2010 10:54

He actually bought $5B in perpetual preferreds, received $5B in warrants (long-term call option, essentially), and included in the contracts the stipulation that the top executives couldn't sell more than 10% of their many millions in shares of Goldman for three years. So, he only invested $5B, not $10B--even so, both are small compared to the $40B+ equity portfolio, $35B fixed income portfolio, $30B+ in cash, $100B+ in annual revenues, $5B+ in annual net income, etc. His point was that even his company, one of the most conservative and strongest financially, would have fallen if not for the government's response, $5B investment in Goldman and all.

Does Dean Baker write all of Beat the Press's posts?
Buffet on CNBC finally made some sense, very rare indeed now-days
written by jim r, November 17, 2010 12:01
To gasps for air from Kernan (the most idiot self-absorbed Rep.- biased employee at CNBC)
Buffet said to get deficits down you need to tax the rich,... IRS released recent top 400 earners averaging $400Mil,"THAT'S $1.6 TRILLION AND THEIR AVERAGE TAX RATE WAS UNDER 17% THE LOWEST EVER" !
The set went silent, Becky jumped in to change the subject.
not bad for government work
written by David, November 17, 2010 12:04
I think it's great the Buffett is countering all the "anti-government" shrill whining that has erupted over the TARP fiasco. I think he is right that the damage would have been far worse. But he should have come out strong in favor of a renewed and much larger stimulus package, I feel.
written by fuller schmidt, November 17, 2010 12:13
So Buffet took a chance on too-big-to-fail with GS? That's weak having taxpayers cover your trading losses. Humorously, George Soros has taken a large position in gold. I wonder what Herr Beck will say about that?
written by diesel, November 17, 2010 3:17
Fur Gruppenfuhrer Beck, alles ist Gotterdammerung.
A Gracious Victor
written by Ron Alley, November 17, 2010 5:06
Buffet bargained better than Paulson, Geitner and Bernanke. Would he have written this note had Paulson, Geitner and Bernanke obtained the better bargain from Goldman Sachs?
dollar stores
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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.