Warren Buffett on the Financial Crisis
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.