Enduring Mockery of the Term “Bailout”
posted by Lawrence Cunningham
Proofreading pages for the next edition of The Essays of Warren Buffett: Lessons for Corporate America, I have to single out the following paragraph, from WB’s 2009 letter, that Americans have totally overlooked but should know by heart:
It has not been shareholders who have botched the operations of some of our country’s largest financial institutions. 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.
Pity that Americans actually believe that the “government” did “bail out” shareholders of AIG, et al. Tragic that they likely will continue to harbor such false beliefs. Passages such as this make me think the subtitle of this book should be simply “Lessons for America.”