When even Warren Buffett, who is no Boy Scout himself, is calling them out, you know it’s bad:
NEW YORK (MarketWatch) — Warren Buffett, the world’s most famous investor, launched an attack Saturday on big-bank executives, calling for penalties for those who led their companies to near-ruin.
In his latest letter to shareholders, the chairman of Berkshire Hathaway Inc. decried the fact that while shareholders suffered during the recent crash, the top people at the banks got off relatively lightly.
“It has not been shareholders who have botched the operations of some of our country’s largest financial institutions,” wrote Buffett. “Yet they have borne the burden, with 90% or more of the value of their holdings wiped out in most cases of failure. Collectively, they have lost more than $500 billion in just the four largest financial fiascos of the last two years. To say these owners have been ‘bailed-out’ is to make a mockery of the term.
“The CEOs and directors of the failed companies, however, have largely gone unscathed. Their fortunes may have been diminished by the disasters they oversaw, but they still live in grand style,” added Buffett.
One of the reasons FDR had Joseph Kennedy help develop the financial regulations was that Kennedy had been one of the financial pirates before the 1929 crash. He knew what they had tried and done and he knew what needed to be stopped. We should indeed listen to Buffet. (I’m not calling him a pirate but, yes, he’s been a member of the financial club.)
I can’t really talk about this because someday I might get rich or I might offend the people who are already rich and could help me get rich and they might decide that they won’t let me get rich if I’m mean to them. Everybody knows that things will only be this good or better for ever and ever and that soon we’ll all be living like the Huxtables. If I were to say something mean about the rich people, they might not let me join their club next year; they won’t let my ship com in. ‘Cause, you know, rude people don’t get to be rich and they just come across as bitter and jealous. I’d better just keep my mouth shut and my head down. We should all learn to be humble in the presence of our betters.