Warren Buffett's Thank You Note – And When Was the Crisis Averted?

Last updated on: November 17, 2010 at 12:23 pm by Timothy Dalrymple

Warren Buffett's Thank You Note – And When Was the Crisis Averted? 2010-11-17T12:23:08-04:00 Timothy Dalrymple

LOGO Patheos Explore the world's faith through different perspectives on religion and spirituality! Patheos has the views of the prevalent religions and spiritualities of the world.

A nice piece in the New York Times today from Warren Buffett, in which he writes a “thank you note” to Uncle Sam for pulling the country away from the brink of utter economic collapse. Knowing that Buffett publicly supported Barack Obama for the presidency, I wondered whether this was an attempt to suggest that criticism of the Obama administration has gone too far. There have been signs that Buffett’s affection for Obama has waned, but I certainly expected that Obama would be named as one of those who deserved credit for navigating the nation through the crisis. Instead, this is what Buffett writes:

Well, Uncle Sam, you delivered. People will second-guess your specific decisions; you can always count on that. But just as there is a fog of war, there is a fog of panic — and, overall, your actions were remarkably effective.

I don’t know precisely how you orchestrated these. But I did have a pretty good seat as events unfolded, and I would like to commend a few of your troops. In the darkest of days,Ben Bernanke, Hank Paulson, Tim Geithner and Sheila Bair grasped the gravity of the situation and acted with courage and dispatch. And though I never voted for George W. Bush, I give him great credit for leading, even as Congress postured and squabbled.

You have been criticized, Uncle Sam, for some of the earlier decisions that got us in this mess — most prominently, for not battling the rot building up in the housing market. But then few of your critics saw matters clearly either. In truth, almost all of the country became possessed by the idea that home prices could never fall significantly.

That was a mass delusion, reinforced by rapidly rising prices that discredited the few skeptics who warned of trouble. Delusions, whether about tulips or Internet stocks, produce bubbles. And when bubbles pop, they can generate waves of trouble that hit shores far from their origin. This bubble was a doozy and its pop was felt around the world.

So, again, Uncle Sam, thanks to you and your aides. Often you are wasteful, and sometimes you are bullying. On occasion, you are downright maddening. But in this extraordinary emergency, you came through — and the world would look far different now if you had not.

President Obama is not named. Specific names are supplied, and identifying both Presidents for thanks would have been the obvious and tactful thing to do. Yet Buffett doesn’t do it. Granted, Buffett is speaking of the exact moment when our economy seemed to totter on the edge of oblivion. But it would have been easy to thank Obama for carrying on with TARP or etc.

This brings up an interesting point. Obama does tend to take credit for averting the disaster — and cheerleaders in the media laud him for “averting another Great Depression.” I actually do believe that Obama deserves some credit for allowing Bernanke and Bair to carry on in their roles, applying the TARP machinery that was put in place by the Bush team. Obama never actually gives credit to the Bushes for this, of course. Obama has proved remarkably ungracious toward his predecessor, which might be expected of a politician who still has another race to run.

But the point is this. There is a literary technique called “telescoping,” in which events (say, events in the story of Jesus’ life) which actually took place over an extended period of time are pressed together in order to make a more compelling narrative. We seem to have telescoped the events of the economic crisis. You can find a helpful timeline here at the website for the St. Louis Federal Reserve Bank.

The crisis in subprime mortgages took shape over 2007 and 2008, and the ____ began to hit the fan in the middle of September 2008. On September 7th, the Federal Housing Finance Agency placed Fannie Mae and Freddie Mac under government conservatorship. Lehman filed for bankruptcy protection, and Bank of America announced its plan to buy Merrill Lynch, on September 15th. Events unfolded swiftly from there. This was over six weeks prior to the election contest between Barack Obama and John McCain — which itself is more than six weeks prior to the inauguration of the new President.

In other words, three months passed between the worst of the crisis and the inauguration of Barack Obama. There were other moments, between mid-September and the inauguration, and even after the inauguration, when the economy looked at risk again. But the worst of the crisis had already passed by the time that Obama became President, and initiatives such as TARP (enacted October 2nd, 2008) were already in place and addressing the problems.

Again, I am abstemious neither with blame nor with credit. There is plenty of blame to go around for precipitating the crisis in the first place. And there is plenty of credit to go around as well. The Democrats in Congress might have gummed up the works for the Bush administration. But I guess I agree with Buffett here. It is more than possible to criticize TARP and the scores of other ways in which the government responded to the financial crisis. And I think those responses grew increasingly dubious over time. But in the moment, when credit was freezing up and companies were on the verge of shutting down, the government — with the cooperation of Congressional Democrats, but led at the time by President Bush and his appointees — responded and responded reasonably well. Whatever else he did wrong, Bush deserves some credit for supporting the American economy in that very precarious stretch.

This is why I feel a twinge of discomfort when I hear President Obama (explicitly or implicitly) take credit for the fact that our economy is no longer on the brink. It was already, by the time he came to power, no longer on the brink. He deserves credit for not reversing the programs that were working. But the primary credit, dare I say it, goes to the Bush administration for responding swiftly and effectively to the crisis.

It comes back to the responsibility of Christians to be honest. We should represent the sequence of events rightly, and give credit where credit is due, whether or not we like the people who receive it. I appreciate that Buffett, although he was not a fan of Bush, is willing to give thanks, and do so in front of the country. The Sage of Omaha is an example to all of us.

Christian Approach to Politics

Politics and Economics

Previous Post

November 15, 2010

More on the Wages of Spin

Next Post

November 18, 2010 Worth Reading Today - November 16 - What the Midterms Meant, How Bad Data Spreads, and Vernon Grounds

Browse Our Archives

Select a Category Abortion Abortion adoption Africa Aging AIDS America Worship American history Americolatry An Open Letter to a College Freshman animals Apologetics art Atheism Authors Barack Obama Bible Biblical Scholarship Billy Graham Blogging Bono Book Review Books That Change Lives Breakfast Links Bulletin Board Business Children Christian Approach to Politics Christian Media Christian Right Derangement Syndrome Christianity and Homosexuality Christians in Government Christmas Chuck Colson CLS v Martinez Comic Creation Creativity and the Arts Cross Examinations Cross Investigations Daily Fragment Daily Trinity Death debt Deep Thoughts on Fatherhood depression economy education Election 2012 entertainment Environment Epistemology Erik Campano Euthanasia Evangelicalism Evangelicals and Gays Everyday Transcendence evil evolution Facebook Jesus faith Faith and Politics Faith and Politics Faith and Politics Faith and Politics Faith and Politics Faith and Politics Faith and Politics faith and reason family Feminism foreign affairs Franklin Graham Future of Evangelicalism Galen D. gay marriage George W. Bush Guest Posts Guns Gymnastics Harold Camping Heaven Hell Holidays Hollywood Homosexuality iam2.org Illegal Immigration immigration Immigration Reform Injustice Inspiration Interviews Islam Jeremy Lin Jesus jesus christ John Mark Reynolds Johnnie Moore Judgment Day Just War Theory Killing Osama Link of the Day Lists of the Week Mark Goldblatt Marriage Military Missions Mitt Romney Modern Western Thought Monastic wisdom Mormonism Morning Hash Morning Report Motherhood Movies Obamacare Old Testament Orphan Care Palin Parenting Pastoral Resources Patheos Peace Between Religions PEPFAR Persecution Peter Wehner Peter Wehner Philosophy Political Quotes of the Day politics Politics and Economics Pornography Prejudice Prisoner Rape Question of the Week Race Radical Faith Rapture Ravi Zacharias Rick Santorum Russia Salvation Sarah Palin Scandals Science Science and Faith Separation of Church and State Series sex sex slavery social justice Social Justice Ministry Spiritual Disciplines sports Steven Tyler Suffering Suicide Sunday Funnies T. Dalrymple Tea Party Technology terrorism The Christian Media Files The Daily Trinity The Electorate The Ethics of Rhetoric The Future of Seminary Education The Middle East The Obama Presidency theological Theological Renewal Theology Uncategorized Understanding Evangelicalism Vocation war War and Peace With Distinction Word to the Wise Writers

Select a Month October 2015 June 2015 May 2015 March 2015 December 2014 September 2014 August 2014 July 2014 June 2014 May 2014 April 2014 March 2014 February 2014 January 2014 December 2013 November 2013 October 2013 September 2013 August 2013 July 2013 June 2013 May 2013 April 2013 March 2013 February 2013 January 2013 December 2012 November 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2011 April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 October 2010 September 2010 August 2010 July 2010 June 2010 May 2010 April 2010 March 2010 October 2009 September 2009 August 2009 July 2009 June 2009

TAKE THE

Religious Wisdom Quiz