Henry Paulson loaned taxpayer money to Goldman Sachs. Warren Buffett loaned private capital to Goldman Sachs. Who got the better deal?
Rep. Marcy Kaptur cross-examined Paulson about this issue. Before heading Treasury, Paulson was CEO of Goldman Sachs. One does not rise to the top of Goldman Sachs unless he is a supreme alpha of finance. One cannot legitimately question Paulson's tenacity or ability to strike hard deals.
Thus, if Paulson had indeed been acting as a fidiciary for taxpayers, he should have gotten at least as good of a deal as Warren Buffett. Why didn't he?
Paulson's reply? "It was in the middle of a crisis." How is that an answer? Since when dooes one give sweet heart loans to people who are desperate for money? It was awfully gracious for Paulson, a steward of United States taxpayer money, to not engage in predatory lending practices. Still, was Buffett's deal predatory? No expert has suggested that it was.
The chart, below, shows just how much better Buffett's deal was. Goldman recently repuchased the warrants for $1.1 billion. So Paulson's deal (reflected in the bottom line) was only three times worse than Warren Buffett's!