Warren Buffett-Senator Ben Nelson Alliance: Ripping Off Taxpayers For Fun and For Profit
New Geography reports on America’s biggest welfare recipient and the Senator on his payroll:
Buffett made that $5 billion investment in Goldman Sachs on September 23, 2008 – a week before Senator Nelson voted “aye” on the bailout that greatly enhanced Goldman’s value and protected it from the massive losses which would have resulted from the need to raise capital by liquidating assets at collapsing market prices. The Wall Street Bailout not only gave Goldman Sachs an infusion of capital but it also covered the credit default swap payments that Goldman Sachs demanded from American International Group (AIG) as it was going into bankruptcy. Goldman’s share of the AIG bailout was $2.5 billion in credit default swap payments, plus $5.6 billion in payments from the Federal Reserve Bank of New York and another $4.8 billion as “vig” for lending securities to AIG. That’s enough to cover the dividend payments to Buffett for 14 years with enough left over to pay back the principle. Ten percent rate of return with zero risk – not the risk/reward tradeoff I learned about in college.
Most Omaha residents know Buffett’s political savvy and appreciate his understated style. Ben Nelson does. He bragged at a Chamber of Commerce meeting that he took advice from Warren before he voted for the Wall Street Bailout. He completely ignored the irony: a Senator asks a banker for advice on a bank bailout, the banker encourages the senator to payout $750 billion of taxpayer money to banks. This is something much less benign than drinkin’ likker on Saturday night and singin’ in the choir on Sunday morning.
Ben Nelson is among the members of congress who invested in shares of Berkshire Hathaway before passing the Bailout that Benefited Buffett – a move that would probably have gotten them fired from Berkshire Hathaway. The very fact that Buffett was reported as saying something so banal as “I’d never be so brave as to try to influence congress” is all you need to hear to know that he’s not telling the truth. According the Congressional testimony of former- Special Inspector General for the Troubled Asset Relief Program (SigTARP) Neil Barofsky, and a report from the Government Accountability Office, the TARP bailout program was rigged. Firms with “political connections,” were more likely to get TARP funds.
“The Buffett Rule.”