Warren Buffett's partner: Bank bailouts saved civilization, so those struggling should 'suck it in and cope'
Students should thank God for the bank bailouts, says Charlie Munger, vice chairman of Berkshire Hathaway. The bailouts prevented the collapse of civilization – and of Berkshire Hathaway's stock price.
Warren Buffett’s partner at Berkshire Hathaway Inc. Charlie Munger told students at the University of Michigan “You should thank God” for the bank bailouts. Without George W., Obama and Bernanke, civilization as we know it would have gone down the drain, making a comparison to Weimar Germany.
“Hit the economy with enough misery and enough disruption, destroy the currency, and God knows what happens,” Munger said. “So I think when you have troubles like that you shouldn’t be bitching about a little bailout. You should have been thinking it should have been bigger.”
And for those in not doing so well in the downturn, the 86-year old Munger says “suck it in and cope.”
Why couldn’t the banks “suck it in and cope” Charlie? But then again that wouldn’t have been so hot for the Berkshire portfolio, which includes TARP recipients: American Express, Bank of America, M & T Bank Corp, US Bank, and Wells Fargo. And of course there was that $5 billion loan to Goldman Sachs in September 2008 when Wall Street was melting down. Then Goldman received $10 billion in TARP the following month. Charlie and Warren must be clairvoyants.
Mr. Munger is reflecting an elevated time-preference typical for those his age. “Like a child,” as Hans Hoppe wrote in Democracy The God that Failed, “he may only be interested in instant or minimally delayed gratification.” Forget the injustice and long-term damage of bailouts, if it’s good for Munger and Buffett we are supposed to thank God for it.
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