Terrorism still a concern

OMAHA, Neb. – Warren Buffett and Jack Welch, two respected business leaders, said Monday the death of Osama bin Laden won’t end the threat of terrorism and might not boost markets.

The pair appeared together Monday on CNBC. Buffett’s interview had been scheduled to discuss the economy and last weekend’s Berkshire Hathaway shareholders meeting, but international relations became a prominent topic because of the bin Laden news. Buffett and other Berkshire officials later also did an interview on the Fox Business Network.

Buffett said he felt good when he heard of bin Laden’s death, but he still worries about terrorist attacks.

“The desire to do us harm exists in too many people around the world,” Buffett said.

But Buffett doesn’t expect the bin Laden news to affect business much.

“I don’t think this is a big market factor,” Buffett said on the Fox Business Network. “The American people feel wonderful today – all of us – but in terms of earning power of American business, I don’t think that factor should change dramatically because of this.”

Buffett said the fact that the United States hasn’t sustained another major terrorist attack since Sept. 11, 2001, shows that the government has likely done many things right. Buffett, whose company owns several major insurers, said he was expecting another attack in 2001.

“It’s always been a mistake to bet against the United States, since 1776,” Buffett said on CNBC.

Welch, the former chairman and CEO of General Electric, said seeing the video of Americans united at ground zero in New York City reciting the Pledge of Allegiance gave him chills. He said he hopes the news will revive the American spirit.

“I hope it’s the beginnings of the kindling wood starting to burn in the American spirit,” Welch said.

Buffett and Welch both said Monday the economy is improving, but that rising gas and food prices could limit economic growth by hurting consumer spending on other things.

Welch said the increase in gas prices sucked $100 billion out of the economy in the first quarter.

“There’s no question that dollars have been sucked out of the economy,” Welch said.

Buffett said an increase in gas prices affects the economy much like a tax increase except that the revenue goes to oil producing nations instead of the federal government.

“The economy is getting better. I think you will see major progress when U.S. housing picks up,” Buffett said.

Microsoft co-founder Bill Gates, who serves on Berkshire’s board, said on Fox Business that he’s optimistic about the future because of the new ideas being developed.