Our first instinct was to admire the frankness of Warren Buffett when he admitted this morning that he would not have invested in Goldman Sachs if it wasn’t for the Hanky-Panke bailout plan now being batted about (and battered) on Capitol Hill. But after a few cups of coffee this morning we can’t help but wonder if we’ve underestimated the old Oracle of Omaha. Viewed through a more cynical lens, Buffett comments look like an attempt to manipulate the debate in Washington.
By pointing to the bailout as the deciding factor in his investment, Buffett is sending lawmakers a loud and clear message that the plan is necessary if new capital is going to enter the financial sector. No bailout, no investment. The public articulation of this idea by a man as well-known as Buffett cannot help but give sceptical lawmakers pause when considering objections to the bailout.
Don’t get us wrong. We trust that Buffett was completely sincere about the necessity of the bailout. But the Oracle’s words this morning have a taint of self-fulfilling prophecy. It’s his way, or the highway to Hell. If we were less polite we might call it a mild form of extortion.
The concept of market manipulation has been getting a lot of play lately. Maybe its time to start talking about government manipulation.
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