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POLITICS

GE, Buffett, Obama, bailouts, subsidies, and profits

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Politics,Beltway Confidential,Timothy P. Carney

Imagine a billionaire fundraiser for George W. Bush investing $3 billion in a multinational corporation run by a Bush appointee. Then imagine that multinational rakes in billions in subsidies, tax credits, loan guarantees, and bailout funds. And then W’s billionaire fundraiser makes bank as the multinational corporation sees a tripling of its stock price.

You might suspect cronyism, no?

Well, replace George W. Bush with Barack Obama, and that’s exactly what’s gone on. The billionaire fundraiser in Warren Buffett in the multinational is General Electric. Bloomberg has this story of Buffett’s GE bet:

General Electric Co.’s (GE) gain of more than 20 percent this year is validating Warren Buffett’s $3 billion wager that the world’s largest maker of jet engines would rebound after the financial crisis.

GE climbed as high as $22.37 in New York, exceeding the $22.25 strike price of five-year warrants for the first time since Buffett’s Berkshire Hathaway Inc. (BRK/A) agreed to buy them in October 2008.

I’ve documented pretty thoroughly the ways in which GE — which spends more on lobbying than any other corporation — profits from Obama policy on climate, energy, stem-cells, rail, transportation, health, and more.

Remember, too, that Buffett put a $5 billion bet on Goldman four years ago, because he was confident in a bailout — and the bailout made him money. Then he put $5 billion on Bank of America after talking with Obama.

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