M & T Bank Corp. will acquire Wilmington Trust Corp. for $351 million, a Bloomberg News article reports. The article reports that "The U.S. Treasury, through its Troubled Asset Relief Program, bought $330 million in preferred equity in Wilmington Trust in December 2008. M&T said it agreed to assume responsibility for the preferred stock."
What the article doesn't say is that M & T itself still owes the government $751.5 million it was given under the Troubled Asset Relief Program. Or that Warren Buffett's Berkshire Hathaway is a big investor in M & T, which will now be operating with $1,081,500,000 of taxpayer capital.
You'd think M & T might want to pay the taxpayers back the $751.5 million before spending $351 million on an acquisition.
This is crazy. My taxes are high enough without buying banks for Warren Buffett, who is one of the richest men in the world without my help. If I want to help Mr. Buffett get richer, I'll have ice cream at Dairy Queen or buy car insurance from Geico, which I do voluntarily. But what I resent is being taxed by the government to give money to Mr. Buffett for his bank investments. On that one, I don't have a choice, other than to vote out the politicians who authorized it.
Defenders of these programs say that the money doesn't help Mr. Buffett, it dilutes him, and that the money doesn't go to him, but to homeowners and small businesses who get loans from the banks. But if this is such a bad deal for Mr. Buffett, why wouldn't he just turn it down, or pay the money back? Maybe it's a win-win-win, for both Mr. Buffett and the bank's customers and the federal government? Maybe, but if the government is running around offering $1,081,500,000 investments to private businesses, I can think of a lot of non-bankers out there whose name isn't Warren Buffett who would like to know where to apply.