One Democrat who knows better
Warren Buffett tries to be polite to the Obama administration, but says that Obama’s badmouthing the Chrysler secured creditors is bad news for lending:
bondholders want a secure bond. If I have a first mortgage on my house here, and the first mortgage is for half of what the house is worth, and somebody says I want you to take a big haircut because I’ve got credit card debt someplace else, that’s got problems. It has problems in terms of future lending.
I mean, if priorities don’t mean anything that’s going to disrupt lending practices in the future. On the other hand, to have a few people standing in the way of something that has, ah, so much importance to the whole country, I can see why people on the other side are very upset. But giving up priorities in lending, abandoning that principle, would have a whole lot of consequences…
If we want to encourage lending in this country, we don’t want to say to somebody who lends and gets a secured position that that secured position doesn’t mean anything.
The Democrats need to listen to wise men like Buffett, otherwise there’s big trouble ahead. You don’t have to be as worked up as this fellow to appreciate the problems of a highly politicized and ideological Treasury Department, effectively under Rahm Emanuel’s control. The WSJ reported that “‘Rahm wants it’ has become an unofficial mantra among some at the Treasury.” That is not good news for America.
May 5th, 2009 at 2:31 pm
CNBC has received extensive access to Buffett and they’ve had the good sense to air a lot of it. Apparently they’ve also interviewed his partner Charlie Munger at length. Hopefully they will show more than has appeared to date. (Transcripts too, ideally.)
On the auto industry: “I don’t think that any of the plans that are politically feasible enough to talk about are extreme enough to work.”
May 5th, 2009 at 2:38 pm
Every year, more laws are passed making what was always free, not free.
Some years more than others, but always more.