Crony King Buffett Praises His Jester Tim Geithner as Courtesans Applaud

John Ransom
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Posted: May 14, 2014 12:01 AM

In titling his memoir Stress Test former Secretary of the Treasury Tim Geithner said more than he knows.

Because it's in times of adversity, rather than in good times, that a man shows his true character.

By that measure Geithner failed.

And so has the financial system in general.

It is a rigged game. Not all the time of course, but in times of stress, the game is rigged for politicians and portfolio managers to reap the rewards while the rest of us get screwed.

In the 538 page book just published by Crown, Geithner writes about how he, an insider from Wall Street, saved Washington and Wall Street from financial doom with just his pen and his phone, while leaving Main Street to pick up the tab.

True, the financial system he claims to have rescued carries on, albeit for whom it carries on is still a question. But practically none of the systemic risk to taxpayers and the government in the financial services industry has been alleviated.

In fact, risk is more concentrated in fewer institutions than ever before.

And where previously the government only had a “moral” obligation-- that is an obligation undertaken because it's in the best interest of the country-- to save banks, today—thanks to Dodd-Frank banking “reform” the government has an actual legal obligation to save banks from poor management practices.

“Tim’s book will forever be the definitive work on what causes financial panics and what must be done to stem them when they occur,” gushes Warren Buffett.

And well he should gush.

Buffett himself helped write the bailout plan. And he helped himself to any profits that could be made off the backs of the taxpayers by trading in stocks using information his buddies Tim Geithner and previous Treasury Secretary Hank Paulson could give him about government commitments to financial bailouts.

It's been well documented here at TownhallFinance and in other places that Buffet made enormous profits with the help of Tim Geithner and Hank Paulson on the financial crisis of 2008.

“In September of 2008,” writes Breitbart, of an account in Throw Them All Out, by Peter Schweizer, “Buffett invested $5 billion in the over-leveraged investment house of Goldman Sachs, having obtained impressive terms: Berkshire Hathaway would receive preferred stock with a 10% dividend yield, and the option to buy another $5 billion at $115 a share.”

Oh, and the government would bail out Goldman Sachs and other firms Buffett had invested in, meaning that Buffett had a financial backstop.

“When the TARP bailout passed,” continues Breitbart, “Berkshire Hathaway firms received a staggering $95 billion in bailout cash from U.S. taxpayers. In total, TARP-assisted companies made up almost a third (30%) of Buffett’s entire publicly disclosed stock portfolio. The payoff: by July 2009, Buffett’s Goldman bet and his congressional jawboning had yielded profits as high as $3.7 billion.”

Yes, at a time that Americans were feeling the greatest effects of the Great Recession, Buffett’s company would see almost $4 billion in profits made in less than a year thanks to government money.

The Oracle of Omaha, it turns out, is just a fat, oozing carbuncle on the face of our country.

Buffett’s folksy image, his down-to-earth piety and his one-man-can-make-a-difference story are a hoax and a swindle.

“Today, Buffett remains famous for investing The Right Way,” explains Wall Street Journal columnist Rolfe Winkler, once a Buffett admirer. “He even has a television cartoon in the works, which will groom the next generation of acolytes. But it turns out much of the story is fiction. A good chunk of his fortune is dependent on taxpayer largess. Were it not for government bailouts, for which Buffett lobbied hard, many of his company’s stock holdings would have been wiped out.”

The cartoon imagery is fitting.

Because what’s left of Buffett, Geithner, in fact all of Washington and Wall Street, despite the books they write, which are praised by cronies, is just a grotesque caricature of everything one should detest in politics and finance.

Of course Geithner and Buffett want to raise your taxes.

They have to eat somehow, don’t they?