I've spent most of the day traveling, and have had a bit of time to think, and one of the things I started pondering was how no one has bothered to ask about the propriety of Warren Buffett's role in this $700 billion orgy of disaster capitalism. Consider these facts:
- Buffett is one of the top economic advisers to Barack Obama, a senator whose influence over whether this bailout passes is, ahem, not small.
- Buffett took a sizable stake in Goldman Sachs today, investing $5 billion in the company. This came after Goldman reorganized itself in a way that will make it better able to capitalize on the bailout windfall.
- Sure enough, Bloomberg News reports that if this bailout passes, it will mean a potentially huge windfall for Goldman Sachs - ie. now for Buffett. Additionally, Obama has now said he doesn't want the bailout measure to include any bankruptcy reform measures that would end up forcing bailout recipients like Goldman Sachs to take on more losses.
Knowing all of these irrefutable facts, am I out of line to think Buffett's role -- and the Obama people allowing him to play this role -- could be perceived as a wee bit shady?
He's heavily investing in a company that stands to make a huge windfall if the bailout passes, and he's simultaneously advising the guy whose support is critical for passing the windfall. I'm not in any way saying Buffett already has insider information that Obama is going to support the bailout -- that seems like the insider trading-ish behavior Democrats say they want to stop.
But I am wondering why no one has even bothered to ask whether Buffett's dual role in all this is appropriate? Look, I'm sure Buffett is a great guy, and its terrific he's planning to donate a lot of his money to charity. But appearance-wise, this doesn't look good -- it seems, in fact, to reinforce the whole disaster capitalism image of this bailout. While there may be no overt improprieties here, while Buffett certainly may just be independently investing and then independently advising Obama, and while I know we are never ever supposed to question the awesomely unquestionable awesome Warren Buffett, the image that his dual role projects is not one that should inspire any confidence that this bailout is in the public's interest. I don't think I'm being a conspiracy theorist when I ask whether we should at least be asking about this (after all, something can't be a conspiracy if the facts are right out in the open).
How is it that no major journalist or news organization has asked simple questions about Buffett's role? And how is it that Obama's people aren't worried that McCain -- the quintessential opportunist -- is going to roll out the questions on their own, in the form of an attack ad? And how come progressives aren't asking those questions? Think of it this way -- if this was a McCain adviser doing the same thing, would we not question it?
I just want to state for the record that the reason I'm asking this question is not to bash Obama (and for those who think I am, please -- use the comments section to explain to me how anything in this post is factually inaccurate in a way that spins up some sort of dishonest "attack" on Obama). As I've said, this is really not about the candidates or the election. This bill is way more important than that right now. The reason I ask this question is because the whole situation has a nasty stench around it, and I'm really curious which actors are helping emit that stench.
Follow David Sirota on Twitter: www.twitter.com/davidsirota