Andrew Ross Sorkin is releasing excerpts from his new book “Too Big To Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and Themselves” in this month’s Vanity Fair magazine. I am looking forward to reading the whole book but just from the excerpts Sorkin provides it gives the strong impression that rather than being “of the people, by the people, for the people,” our U.S. Government officials are/were devoted to Wall Street more than anything else.
Take for instance these two quotes:
Sorkin reports that the deal, which was nearly consummated, would have merged Goldman Sachs and Wachovia. Henry M. Paulson, the Treasury secretary and former C.E.O. of Goldman, was deeply involved in the process, contacting both Lloyd Blankfein, Goldman’s current C.E.O., and a Wachovia board member, and strongly urged both to consider it. Wachovia’s C.E.O., Robert Steel, was a former vice-chairman at Goldman Sachs and Paulson’s former number two at the Treasury Department.
Sorkin reports that Warren Buffett was also contacted about investing in the merged company, but told a banker at Goldman that it would never happen. “By tonight the government will realize they can’t provide capital to a deal that’s being done by the former firm of the Treasury secretary with the company of a former vice-chairman of Goldman Sachs and former deputy Treasury secretary,” Buffett said. “There is no way. They’ll all wake up and realize, even if it was the best deal in the world, they can’t do it.”
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It seems as if Warren Buffet is the only one that’s not confused as to what the Federal Reserve and Treasury are supposed to be all about.