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Buffett: Obama best choice to face 'economic Pearl Harbor'

By , Tuesday, January 20, 2009.

President Barack Obama takes office today 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 provide an additional $825 billion jolt to the economy (see Inman News story).

Billionaire Warren Buffett thinks Obama is "the absolute right commander in chief" for tackling the financial 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: Well, actually, in September I said .... this really 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 quite what to do about it. And the point is ... temporarily it looks like we're losing. It has that same aspect. Interestingly enough, we were losing for a while after Pearl Harbor. But the American people never doubted that we'd win. I mean, we had that attitude then. I think, 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 right commander in chief ... that's another thing the American people seem to do, occasionally, is that we elect people that are right for the times. You know, whether it was Lincoln, Roosevelt.  I would say Obama ... you couldn't have anybody better in charge.

BROKAW: But why is he right for the times?

BUFFETT: Well, he's smart, he's got the right values, but he also ... understands economics very well. He's cool. He's analytical. But then, when he gets it all thought through, he's fast -- he can convey to the American people what needs to be done. 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 things they're-- they should be doing they're not doing?

BUFFETT: Well, they're ... gonna turn the fire hose on this fire. I mean, it's a blunt instrument to some extent ... but it's very, very big. We're gonna have a medicine coming in a dosage we've never seen before. But it won't have immediate impact. It should take time for it to hit the economy in real force. So people should not expect miracles in February or March or April. That isn't gonna happen.

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

BUFFETT: I don't know the perfect 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 something on a very 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 perfect solution is.

We wouldn't know it if we found it. The important thing to do is do what we know we need to do now. And ...  there will always be critics on that. The important thing is, that the person that's there takes the action that makes sense at the time. Did we handle the aftermath of Pearl Harbor the next month perfectly? I don't know whether we did or not. But I would doubt that. You know, somebody now can come up with a better system. The important thing is, we got going.

...BROKAW: But how much money can we print? I mean, the people are already saying, in the latest NBC News Wall Street Journal poll they're as concerned about the deficit as they are about almost anything else going on in their lives.

BUFFET: They should be concerned about the deficit. But they should be more concerned about getting the economy working right ... there are consequences to printing money, and they're not pleasant.

...BROKAW: (With) Democrats controlling both chambers now, there's gonna be a big cry for more regulations on Wall Street. For the financial institutions to be more closely supervised. Is that a good idea?

BUFFET: Well, it's probably a good idea. But I wouldn't look at that as a panacea. What you have to do, to some extent, is you have to create the right incentives also for those that are running those institutions. And, you know, I'm not sure whether I would shoot the CEO of any bank that went broke or anything. But I would make it much tougher than it's been in the past to run an institution into the ground. I think there are plenty of things to be done in the boardroom as well as in the rooms of the Senate or the House.

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Submitted by Jodi Suguitan on January 22, 2009 - 6:20am.

Regardless of who you voted for I believe the public was ready for change. It certainly seems that our new president is going to attempt to get under the hood of government quite a bit!
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Submitted by John Rakoci on January 23, 2009 - 6:13am.

If we were all billionaires like Buffett or millionaires like obama there would be no concern about how this is going to be repaid. We would have less concern also if like the new treasury secretary we did not pay taxes for years unless we decided to accept a govt job. There is concern about how the $350 billion Bush let loose and obama has the other other $350 billion plus wants $825 billion more. Over a trillion will lead to a lot of corruption. Buffetts comments now prove selling the Berkshire (BRKb) sharres early in 2008 was a great move and I no longer will be looking to replace them until Buffet leaves.

 
Submitted by Paul Francis, CRS on January 23, 2009 - 8:17am.

Wow... real insightful. I often wonder why nobody can specifically explain how printing up a bunch of money is going to make anything better in the long run...

Paul Francis, CRS
Prudential Americana Group
www.LasVegasRealEstateHome.com
702.592.3058

 
Submitted by Emmanuel Scanlan on January 23, 2009 - 8:41am.

Jodi Suguitan is, in my opinion, correct that the American public is ready for change. In fact they have been ready for change for the past 20+ years. Unfortunately, every President elected since I was born (many years ago) has promised change during their campaign and either failed to deliver or performed a 180 Degree turnaround once in office. I will credit Obama for using this approach as his campaign mantra. It certainly played right into the minds of the people (not mine mind you). The question is can he lead this country into the change needed without destroying any segment of the population or the country itself?

I also agree with every word John Rakoci has stated above! Those with extensive wealth, such as Warren Buffett, have little to worry about regardless of how this all turns out. It is easy for these types to spew forth any rhetoric they wish. By the time this is all over, our government will have handed many huge corporations enough money to help pull every citizen out of their personal debt. If nothing else they will have spent enough to help every citizen reduce their debt to a breathable amount. Obama has already stated that the US Government is seriously impaired and has made comments to the effect that "Trickle Down Economics" just does not work. Yet here he is ready to continue the previous "Trickle Down Economics" methods. All of this at the eventual cost of the individuals in this country.

Our government has already, prior to this situation, placed the American people in deep debt. Our government has already borrowed hundreds of billions of dollars (if not trillions) from foreign governments and institutions just to handle past budget shortfalls. Now they are getting ready to shell out trillions more to "Big Business'" that can not even run themselves properly! The "People" would have been better served to allow the companies to fail and claim Chapter 11 bankruptcy or have been Nationalized.

I certainly hope Obama proves me wrong in every aspect! At this point though I can not say I agree he is the best person to lead this country. Of course McCain would not have been a good choice either!

Emmanuel Scanlan
PS Inspection & Property Services LLC
www.psinspection.com
Serving the Dallas and Fort Worth areas

Knowledge is power, but sharing knowledge brings peace!

 
Submitted by Vinicius Brasil on January 23, 2009 - 3:11pm.

It's always a interesting to hear someone like Warren Buffet speak on a subject. You have to understand the insight and concious he must have being one of the wealthiest individuals in the world, and self-made billionaire.

It's reassuring to know that he feels confident about the new President. I know its to early to tell, and there will be setbacks that should be expected. However, the things that Buffet touched on in this interview "...he's smart, he's got the right values,..", I feel have been missing in the last few administrations.

Only time will tell how this admistration plays out and future generations will be the ones debating and scrutinizing the decisions made, all I can say is Warren Buffet is a brilliant person, and if he's impressed, well that says alot.

Vinicius Brasil
Realtor
Santa Clara Valley Real Estate
408.582.3272

 
Submitted by George Farmer on January 24, 2009 - 3:55am.

I agree if Warren is behind Obama I feel better about it. At the same time, our local schools are laying off teachers and we are giving billions to the useless banks.

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Submitted by Ed Kubeck on January 24, 2009 - 3:37pm.

I would not want an amature college student Like Obama working under the hood of my car. If he ever ran a business I am sure he ran it into the ground. I say the problem is our government. Republican and Democrat. They always benefit no matter what the economy is like. The stimulus package is only a stimulus package in name; it does not stimulate anything. We need huge tax breaks and huge tax break incentives. Also hold corporation leaders liable. When they are given bailouts those on the board should have all their assets and property siezed and controlled by the government. Another problem is the media is connected to the government. Watch out for the government media complex. Too many people are just followers of the bad misinformation they receive from the media.

 
Submitted by M.Otechi Nyangweso on January 25, 2009 - 6:41am.

Even as Barack Obama braces himself to tackle big time Real Estate business, only the type that Warren Buffet can envisage, tacked in the depth of Africa at a small nondescript village called Nyangoma Kogelo-where Barack Obama Snr was born and raised- folks are upbeat.It is no longer the sleepy town it was two years ago. According to reports, for one thing,the village in Siaya District,Nyanza Province, Kenya now has running water and electricity.
The real estate and property development sector in Kenya will receive this news with accolades. That at least two entities;one a not-for-profit organisation(Dero Community & Cultural Organisation) and the Government of Kenya will erect a library and cultural centre whose first phase is estimated to cost $1.25 million. As has been said, when Uncle Sam sneazes, the world coughs,the Building Construction & Property market in Kenya is bracing itself for a slump. Before you complain that you have no shoes,watch out and digest that somewhere, someone has no feet.

 
Submitted by M.Otechi Nyangweso on January 25, 2009 - 6:44am.

Even as Barack Obama braces himself to tackle big time Real Estate business, only the type that Warren Buffet can envisage, tacked in the depth of Africa at a small nondescript village called Nyangoma Kogelo-where Barack Obama Snr was born and raised- folks are upbeat.It is no longer the sleepy town it was two years ago. According to reports, for one thing,the village in Siaya District,Nyanza Province, Kenya now has running water and electricity.
The real estate and property development sector in Kenya will receive this news with accolades. That at least two entities;one a not-for-profit organisation(Dero Community & Cultural Organisation) and the Government of Kenya will erect a library and cultural centre whose first phase is estimated to cost $1.25 million. As has been said, when Uncle Sam sneazes, the world coughs,the Building Construction & Property market in Kenya is bracing itself for a slump. Before you complain that you have no shoes,watch out and digest that somewhere, someone has no feet.

M.Otechi Nyangweso,
www.contractserviceassociates.net

 
Submitted by Angelina Nobles on January 26, 2009 - 2:30am.

Obama is the perfect persone to tackle with this crisis.

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Submitted by M.Otechi Nyangweso on January 26, 2009 - 2:35am.

I do think that our expectations in Kenya about Obama are not misplaced. We require him to think global to include far off places like the village his father was born.
M.Otechi Nyangweso,
www.contractserviceassociates.net

 
Submitted by Michael Taylor on January 27, 2009 - 2:19am.

Regardless of your party affiliations, I think Obama, at least for the time being, has people both here and internationally hoping things will get better. If he can turn that hope into confidence in the US and its economy, then we are well on our way to recovery.

Michael Taylor

Indianapolis Real Estate | Indianapolis Foreclosures | Geist Real Estate

 
Submitted by Jose Lopez on January 28, 2009 - 3:38pm.

If Obama ever thought that getting to be president was a challenge, then dealing with all the messes that Bush left behind will seem like Pearl Harbor. It is unreal how he will be challenged on every front. But the good news is that we have nowhere to go but up right now. So the better times are coming.

Jose Lopez
www.sellsarasota.com
www.fl-repos.com

 
Submitted by Scott Allan on January 29, 2009 - 7:24am.

I am a REP but I agree that Obama was the right choice. Only thing that upset me was that I know a poll that interviewed 1000 African american voters. Nearly HALF of them had no idea what was going on. One question they asked (which they repeated TWICE to avoid a mistake) was "Who did you vote for?....Obama or John Kerry?" Many of them said Obama without calling out that Kerry was not even on the ballot!!!!

HOWEVER, I voted for Obama and he is the change we need to restore confidence. Real Estate is counting on him and without a housing recovery, our economy will be in the tank

Scott Allan
New Jersey Real Estate Guys
Florida REO Investment Deals

 
Submitted by Brewer Caldwell on February 2, 2009 - 1:43pm.

I agree with George Farmer, hearing it from Buffett makes me feel a bit better.

I also am tired of billion after billion going to pay useless banks.

Changes need to be made quickly and I have my fingers crossed.

For real estate news about arizona, visit Brewer Caldwell

 
Submitted by Jonathan Phan on March 9, 2009 - 6:59am.

Just cross your fingers and hope for the best.

Jonathan Phan

http://www.jonathansellshomes.com/

 
Submitted by Patty Redlich on June 29, 2009 - 8:55am.

The helping hand we're looking for is at the end of our arm.

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