OMAHA, Neb. – Billionaire Warren Buffett said Wednesday the economy has not yet had any bounce and will take some time to recover, but he complimented the government’s efforts over the past year to solve the problems.
Berkshire Hathaway’s chairman and chief executive conducted a couple of live television interviews Wednesday in New York. The interviews came before his lunch with a Chinese investment manager who bid $2.1 million in a charity auction to dine with the Oracle of Omaha.
Buffett said during an interview on CNBC that all the reports he sees from Berkshire’s retail, manufacturing and utility businesses show the economy has remained fairly flat. Buffett joked that he had hoped the cataract surgery he had a couple weeks ago would help him see the “green shoots” of recovery others have talked about, but he still hasn’t.
“There were a lot of excesses to be wrung out, and that process is still under way,” Buffett said. “And it looks to me like that process will be under way for quite a while.”
Buffett said the United States has a good team leading the Treasury Department and Federal Reserve as it fights what he’s called an economic war. Buffett complimented Federal Reserve Chairman Ben Bernanke, Treasury Secretary Timothy Geithner and the president’s economic adviser, Larry Summers, and he said Bernanke has played a key role.
Bernanke’s term ends Jan. 30, and there is speculation that Obama may appoint someone else, possibly Summers, to lead the Fed. “I don’t see how you can do better” than Bernanke at the Fed, Buffett said. Bernanke took decisive action at a time when the nation’s economy needed that.
Buffett told the Fox Business Network that he worries the details of the new financial regulations proposed by President Barack Obama will be drafted in a way that might hinder the economy.
“The wrong kind of regulation is something that, in attempting to solve those evils, really stifles the market system that works pretty darn well over the years,” Buffett said.
But Buffett said the government needs to do something to make sure the economy doesn’t wind up in a situation similar to last September when the level of borrowing threatened to cripple the economy.
That will be hard to do, Buffett said, because it’s hard to write rules to prevent excesses. “It’s in human nature to go to excess,” Buffett said to CNBC.
Buffett said he’s sure the actions the government has taken in the past year to help the economy will result in high inflation down the road. But he said the actions were appropriate.