Buffett and the bailout
Economists “overwhelmingly agree” that we “need quick, bold action” to stave off a deep recession, says David Leonhardt in The New York Times. But few of them agree that Henry Paulson’s plan is the right action. A main concern is that taxpayers don’t get any stake in the firms their dollars help. Paulson says that demanding ownership stakes would keep healthier banks from participating, keeping credit markets paralyzed. But he has a problem: Warren Buffett, who convinced relatively healthy Goldman Sachs to sell him a stake with very healthy returns. Paulson could be right, but he needs to sell his plan better. Otherwise “maybe the American taxpayers should be asking Warren Buffett to be negotiating on their behalf.”
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