BECKY: Warren, was it a mistake for the government to allow Lehman to go under?
BUFFETT: It may have been. But I would say overall, the officials in Washington did a terrific job of dealing with really what was an economic Pearl Harbor, as we talked about. So I would say that if Merrill hadn't been bought by the B of A, Merrill would have gone very quickly. And the dominoes were really lined up. And I don't think it was fully appreciated, perhaps, what a big domino Lehman was or how close it was to the next big dominoes. But overall, I give (former Treasury Secretary Henry) Paulson, I give (Federal Reserve Chairman Ben)Bernanke, I give (FDIC Chairman) Sheila Bair, I give (Treasury Secretary) Tim Geithner, I give them very high marks for the fact they took unprecedented action. [APPLAUSE]
If Warren Buffett, the most widely known "capitalist" in America, is telling people that government intervention in markets is "good" and part of "capitalism" and the "American system" then who is going to defend true capitalism?
The fact is that Warren's investment in Goldman Sachs benefited hugely from the bailout (as well as Goldman's ridiculous conversion to commercial bank status) as otherwise Goldman would be out of business and Warren would have been $5 billion poorer.
When the markets were going up he was a genius. Then there was a hiccup and he was bailed out.
This kind of hypocrisy is just horrendous.
Let me remind you: capitalism is where individuals make their own decisions as to where and when and what to buy or sell. Fascism (or corporatism) is where corporations team with the government to leverage the government's monopoly power to maintain and increase power. When it comes to big companies we have fascism. It didn't work for Mussolini and it's not going to end well here either. To hear Warren Buffett promote fascism is very problematic because he is viewed as the ultimate capitalist and his words lend great credence to the proposition that capitalism has somehow failed when in fact it is central economic planning by the Federal Reserve that has created the current crisis.
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I think you're mischaracterizing Warren Buffet. He's known as the greatest investor, not the greatest capitalist, at least never in any quote I've ever seen about him.
ReplyDeleteIf you know otherwise, I'd like to see it.
However, I don't know enough to say whether you or he is right, so I won't speak to that.