The richest man in the world doesn’t need $95 billion dollars.
But apparently, the companies he invests in did. According to a new report, companies in which Warren Buffett owns sizable minority stakes received a whopping $95 billion in Troubled Asset Relief funding, as Buffett was shilling for investments in common stocks.
To be fair, his holding company, Berkshire Hathaway, has received no government aid. In fact, Berkshire became a major lender in the wake of frozen US credit markets, injecting $5 billion into General Electric, Goldman Sachs and even motorcycle-maker Harley Davidson at hefty interest rates.
A bitter Reuters blogger, however, points out that Buffett’s investment holdings have benefited greatly from taxpayer’s largess. Aside from the nearly $100 billion in taxpayer aid extended to Buffett’s holdings — which include mortgage lender Wells Fargo and Bank of America, credit card leviathan American Express and the bonus-happy brokerage Goldman Sachs — his companies also benefit from $130 billion in FDIC backing for their debt.
“Were it not for government bailouts, for which Buffett lobbied hard,” writes Reuters’ Rolfe Winke, “many of his company’s stock holdings would have been wiped out.”
Buffett owns 27 percent of Berkshire Hathaway, for which he serves as chairman and chief executive for an annual salary of $100,000. He’s known for his frank and simple-worded investment advice, often laced with colorful sexual metaphors.
Winke says Goldman Sachs would have collapsed without government aid it received. The bank recently paid back its TARP funding — seen as an effort both to signal to the markets its financial strength as well as to get out from beneath a bevy of restrictions on company practices, including massive bonus payments to executives.
Without government backing, Winke notes,
Winke notes that Buffett even complained about the favorable treatment given to his own investment holdings.
“Conversely,” he added, “highly-rated companies, such as Berkshire, are experiencing borrowing costs that … are at record levels. Moreover, funds are abundant for the government-guaranteed borrower but often scarce for others, no matter how creditworthy they may be.”
Buffett, though, is a strange egg in financial circles: he recently admitted paying just 19 percent in federal income tax, saying it was inappropriately low, and is a major proponent of the estate tax. He’s also the bete noire of some corporate executives, having been a major critic of executive salaries and stock options in years past.