Warren Buffett on the Financial Crisis

Posted in Economics by Arasmus on October 2, 2008

Here are my notes from this Charlie Rose interview with Warren Buffett on the subject of the current financial crisis.

  • Financial Crisis is an economic Pearl Harbor and people are right to be worried
  • Bailout is essential – we need to get it done now
  • Paulson is the best man for the job.
  • Time is essential – delay will be deadly
  • Bailout will not produce remarkable results
  • Congress needs to focus its oversight on ensuring that assets purchased will be purchased at market price but politicians should not be allowed to determine what the investments are – otherwise you will have pork-barrel decisions by politicians
  • He is very confident in America’s future but the athlete is on the floor right now
  • Future inflation will be the cost of doing what we have to do to fix this problem
  • Inflation and unemployment will go up from here
  • Best case scenario we recover in 6 months, worst case scenario we recover in 5 years
  • Long-term balance of payment deficit is bad news for the country and bad news for the value of the dollar, partially ameliorated by our improving productivity and exports
  • He is paying the lowest taxation he has ever paid in his life.  He believes it is just not fair that he pays 15% capital gains while woman emptying waste-paper basket pays higher rate of income tax.
  • Doesn’t have a problem with America sharing global prominence with others – inter-connected world is safer.

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