Billionaire investor Warren Buffett praised the U.S. government for bailing out Wall Street and saving the U.S. economy during the height of the financial crisis.
Buffett, writing an open letter to Uncle Sam in a New York Times op-ed, said the government's remarkably effective actions saved Wall Street, non-financial American companies, his own $200-billion Berkshire Hathaway (NYSE:BRK.A), and the jobs, income, and retirement funds of average Americans.
Buffett said as everyone panicked, only the U.S. government had the resources to shore up the financial system and restore confidence. He also praised the government for improvising on the run, stretching legal boundaries, avoiding slowdowns, and rising above turf wars to get the job done.
Buffett said some people will second-guess the government's actions during the crisis and its prior decisions that perhaps led to the crisis.
In Uncle Sam's defense, the bailout decisions were made in a fog of panic. Regarding prior decisions that led to the crisis, Buffett said almost all of the country, not just the government, became possessed by the idea that home prices could never fall significantly.
The U.S. government has indeed been heavily criticized and second-guessed for bailing out Wall Street, allegedly at the expense of average citizens.
In particular, its $180-billion bailout of insurer AIG, seen as a back-door bailout for Wall Street, has ignited scathing backlash.
Taxpayers were propping up the hollow shell of AIG by stuffing it with money, and the rest of Wall Street came by and looted the corpse, said New York Congressman Edolphus Towns in a hearing in January 2010.
The anger stems from the fact that while Main Street is still struggling with unemployment and rising poverty, Wall Street scored record profits and bonuses in 2009.
While Buffett may have liked the government bailouts on principle, he also benefited financially from them through his ownership of financial stocks like Goldman Sachs, U.S. Bancorp, American Express, and Wells Fargo.
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