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Buffett: Obama best choice to face ‘economic Pearl Harbor’

President Barack Obama takes office these days holding the power to unleash the second half of the $ 700 billion Troubled Asset Relief Program, and there’s also legislation in the works to give an additional $ 825 billion jolt to the economy (see Inman News story).

Billionaire Warren Buffett thinks Obama is &quotthe absolute proper commander in chief&quot for tackling the monetary crisis.  Excerpts from a transcript of an interview with NBC’s Tom Brokaw posted by CNBC:

BROKAW: I’ve been describing this as the domestic equivalent of war. Is that an overstatement?

BUFFETT: Nicely, actually, in September I stated …. this truly is an economic Pearl Harbor. The country is facing something it hasn’t faced since World War II.

And they’re fearful about it. And they don’t know really what to do about it. And the point is … temporarily it looks like we’re losing. It has that same aspect. Interestingly sufficient, we were losing for a even though right after Pearl Harbor. But the American men and women by no means doubted that we’d win. I mean, we had that attitude then. I feel, right now, that they’re sort of paralyzed.

BROKAW: Is Barack Obama the right commander in chief for the economy?

BUFFETT: He’s the absolute proper commander in chief … that’s an additional factor the American folks appear to do, occasionally, is that we elect men and women that are right for the times. You know, no matter whether it was Lincoln, Roosevelt.  I would say Obama … you couldn’t have anybody much better in charge.

BROKAW: But why is he proper for the times?

BUFFETT: Well, he’s smart, he’s got the correct values, but he also … understands economics extremely nicely. He’s cool. He’s analytical. But then, when he gets it all thought via, he’s quick — he can convey to the American individuals what requirements to be completed. Not to expect miracles. That it’s gonna take time. But that we’re gonna get to the other end.

…BROKAW: The stimulus program, that the new president wants to have, and that Congress is cobbling together, in your judgment is it sound? Are there some points they’re– they should be performing they’re not doing?

BUFFETT: Nicely, they’re … gonna turn the fire hose on this fire. I mean, it’s a blunt instrument to some extent … but it’s quite, very huge. We’re gonna have a medicine coming in a dosage we’ve in no way observed prior to. But it won’t have immediate impact. It really should take time for it to hit the economy in real force. So people really should not expect miracles in February or March or April. That isn’t gonna happen.

…BROKAW: Paul Krugman, amongst other people, says we’re not doing enough. That we’ve got to … open the valves even greater than we have been. A lot of individuals are concerned about the deficit and what the consequences are gonna be down the stream. Are we doing sufficient?

BUFFETT: I don’t know the excellent answer. Nobody else does either. I mean, Paul Krugman doesn’t know it. And Barack Obama doesn’t know it. And (incoming Treasury Secretary) Tim Geithner doesn’t know it.  All we know is we have to do some thing on a quite major scale. And if we find out six months down the road … we’ve gone a little off course, left or right … that can be (adjusted) we do not want to sit around and debate for six months what the best answer is.

We wouldn’t know it if we found it. The important factor to do is do what we know we require to do now. And …  there will often be critics on that. The essential thing is, that the individual that’s there takes the action that makes sense at the time. Did we manage the aftermath of Pearl Harbor the next month perfectly? I don’t know no matter whether we did or not. But I would doubt that. You know, somebody now can come up with a better method. The essential factor is, we got going.

…BROKAW: But how significantly cash can we print? I mean, the men and women are already saying, in the latest NBC News Wall Street Journal poll they’re as concerned about the deficit as they are about practically anything else going on in their lives.

BUFFET: They should be concerned about the deficit. But they should be much more concerned about obtaining the economy working right … there are consequences to printing cash, and they’re not pleasant.

…BROKAW: (With) Democrats controlling both chambers now, there’s gonna be a huge cry for much more regulations on Wall Street. For the financial institutions to be a lot more closely supervised. Is that a great thought?

BUFFET: Nicely, it’s almost certainly a great idea. But I wouldn’t look at that as a panacea. What you have to do, to some extent, is you have to develop the correct incentives also for those that are running those institutions. And, you know, I’m not positive regardless of whether I would shoot the CEO of any bank that went broke or anything. But I would make it significantly tougher than it’s been in the past to run an institution into the ground. I believe there are a lot of points to be done in the boardroom as well as in the rooms of the Senate or the House.

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Originally by Matt_Carter from Inman Weblog on January 20, 2009, 1:04pm

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