There had been speculation that gazillionaire Warren Buffett’s purchase of a $5 billion stake in Goldman Sachs constituted an endorsement of Treasury Secretary Henry Paulson’s $700 billion bank bailout package, but now Buffett himself has confirmed the rumor is true. (By the way, our last article on the philanthropy of Buffett and his family is available here.)
According to a Bloomberg report:
Billionaire Warren Buffett, calling turmoil in the markets an “economic Pearl Harbor,” said his $5 billion investment in Goldman Sachs Group Inc. is an endorsement of the Treasury’s $700 billion bank rescue plan.
“I am betting on the Congress doing the right thing for the American public and passing this bill,” Buffett said on cable channel CNBC today. “I certainly have a vote of confidence in Goldman and vote of confidence in Congress.”
Buffett’s thumbs-up for Paulson’s plan will no doubt comfort many investors, but conservatives remain deeply skeptical of the bailout because it’s a Big Government solution and there is no guarantee it will help the nation’s struggling financial markets.
Representative Ron Paul (R-Texas), the principled libertarian, says the bailout will do more harm than good. “Using trillions of dollars of taxpayer money to purchase illusory short-term security, the government is actually ensuring even greater instability in the financial system in the long term,” Paul writes.
Meanwhile, if in these gloomy economic times you need a laugh, watch ultra-liberal House Financial Services Committee chairman Barney Frank (D-Massachusetts) on “The Charlie Rose Show.” The video is available here. Frank’s account of the mess we’re in and how we got there is so ridiculous and self-serving that a laugh track should have been edited in.