Buffett didn't sit idly by while his holdings were threatened. He lobbied for, and supported, bailouts.
Not content with bailouts of companies he owned large stakes in, he made sweetheart deals to invest in Goldman Sachs and GE knowing what was going to happen. Have you ever explored those?
If his GS and GE investments aren't convincing enough, here are a few choice examples of the Oracle of Omaha's hypocrisy:
1. While he promotes higher tax rates for high-earning individuals, he lobbied against a tax that would have sought to recoup TARP losses from bailed-out banks (see http://abcnews.go.com/Business/buffett-bank-tax-higher-rich-...).
2. Buffett once famously warned that derivatives were deadly, but when it came time to put his money where his mouth was, he lobbied against proposed derivatives regulations that would have cost Berkshire billions (see http://www.independent.co.uk/news/business/news/buffett-lobb...).
3. In 2010, Buffett once defended the ratings agencies (see http://www.wnyc.org/articles/wnyc-news/2010/jun/03/buffett-d...), but apparently he's only willing to defend them so long as they agree with him (see http://www.foxbusiness.com/markets/2011/08/05/buffett-to-fbn...).
Bottom line: whatever one may have once thought about Warren Buffett, his actions over the past several years make it clear he is no investor, he is a corporatist. And quite a successful one at that.
I sincerely believe that he was in favor of the bailouts because he thought that it was the least bad option at the time. Without more liquidity in the system, things could have turned out much worse than they did.
Sweetheart deals in GS and GE? Buffett had lots of cash and they needed it, so he made deals that were very profitable to BErkshire and they took it because they didn't have a choice. I'm sure he expected the government to step in because it was obvious to him that they didn't have a choice, but I don't think he had inside information.
Buffett has explained his derivative investments in recent annual letters, and his explanation made perfect sense. I'm sure you can find it, it was probably in the 2009 one ±1 year.
Both Buffett and Munger have been very critical of rating agencies and accountants, but I'm sure they've also defended both against criticism that they think is unfair. It's not because you're wrong that you're wrong in all ways, always in bad faith, and about everything.
Yet he is the only one who amongst the super rich in America who is talking about raising taxes. He is doing this specifically because of the positive impact it would have on finances for the country, despite the fact that this would have a disproportionate/fair share effect on his tax payments.
Oh, and Warren Buffett plans on donating the vast majority of his wealth away upon his death, so I usually give him the benefit of the doubt and believe that his suggestions are intended to improve the economy as a whole rather than build up wealth. What's it matter to him if he makes or loses another billion when he's giving it away in the end? Nah, I think he's a good guy.
The ones that Buffet has invested in are way more straightforward, don't pose any systemic risk, and have very different collateral requirements than the toxic stuff.
A narrative convenient for powerful banks that was created by powerful banks and allied politicians. People have suffered and continue to suffer because of the crimes these institutions have committed. Propping up their corpses only helps the criminals who created the situation. Clearing out bad businesses so that new ones can take their place is a central pillar of capitalism. If you really believe a bunch of billionaires who claim the world's going to end if they lose their billions, well, you're gullible at best. Far from forestalling suffering, the continued operation of these entities and their influence on legislation perpetuates it. Their collapse is the best thing we could hope for, even if it causes short term turbulence.
By the way, the argument that nothing needed to be done is opposed to practically every economics departments' opinion in the country. Maybe you know more about economics than we all guessed, but I think it's time you show a PhD instead of arm-chairing here.
The amount of money the US has pumped into its corrupt financial system is enough to put its entire population on welfare for years. A sane approach would have been to let the banks fail, let the markets tank, and ease the transition as needed with bottom-up debt relief and aid.
The banks should have been allowed to fail. The only reason capitalism works is by providing a huge incentive to do things right. Bailouts like these will convince companies they can get away with the same thing in the future.
The point was that you didn't have a domino effect that took down the whole world economy (no industry that is bigger than a corner store can function without a banking system). Throwing out the baby with the bathwater just so you can punish some people is counterproductive.
Citation needed.
There would still be demand that needed supplying, no? Some non-criminal companies would have happily stepped up to fill that void.
If that had seized, it would have been far worse than the bailouts.
Unfortunately, there should have been at least civil penalties (and probably criminal pentalies) associated with building and hiding enough toxic assets to tank the banking system. The real travesty was not the bailout, it was that there were no negative consequences (relatively speaking) to the people who caused it (which is a tough question to answer, but not enough effort was made, IMO).