These excerpts are from In the Loop with Betty Liu on Bloomberg Television. Liu was in Sun Valley to interview Warren Buffett.
Betty Liu: Is it misguided in many ways to look to the White House to try to help create jobs. I mean, Obama’s got this jobs council—you know he keeps creating these councils to create jobs—is it misguided in that way?
Warren Buffett: People get their expectations too high. I mean, if you look at these 15 recessions we’ve had since we became a country. During half that period, at least nobody knew what monetary policy or fiscal policy was. I mean,we cured ourselves and the system cures itself. And, I would say that’s the biggest single factor. Government can do things to make it worse and they did in the Great Depression. And, government can help some.
Betty Liu: Is the president making it worse?
Warren Buffett: No, no, no. We know the things to do that can help, but they are not, in my view, the prime determinant. There are things to work through. If you have too many houses, what can government do?
…Government gets blamed too much and it may get too much credit when things do improve. Government’s a factor, but by far the biggest factor is correction of the business cycle over time is what would call the natural regenerative powers of capitalism. Capitalism works.
[Later in the interview]
Warren Buffett: It takes some cooperation from Congress, but [Obama] has ideas about what America can and should be that are in sync with mine. Some of it is social justice and some of it is distribution of wealth, and that sort of thing.
Betty Liu: Like what? What are the lot of issues?”
Warren Buffett: Like I think, for example, that we’ve had a period in the last 15 years whee the 400 top tax payers in the United States—we have to go back 15 years—they had an average income of about 45 million. Now, they have an average income of 350 million, in the most recent figures, whereas their tax rates went down from 27% down to 16%. That’s not my idea of America. I mean I want everybody to get rich, but I think that the rich have a responsibility to pay higher tax rates.
Betty Liu: So that when you hear him say targeting the millionaires and the billionaires, you’re saying “Go get ‘em.”
Warren Buffett: Yeah.
Betty Liu: Yeah?
Warren Buffett: Yeah, I am.
Betty Liu: But, don’t get me--
Warren Buffett: No, I look around at my friends here who are paying lower tax rates than the people who are serving us the food—
Betty Liu: Do they agree with you? When you’re here at Sun Valley talking to them, do they agree with you?
Warren Buffett: I think some do, yeah. And, many don’t.
Betty Liu: And are they still talking to you?
Warren Buffett: Oh, yeah, they talk to me. They figure I’m harmless and eighty. This guy will only be around a few more years.
[So, if you are not a billionaire and plan to be around for more than just a few years, it is time to decide what kind of America you want to live in. In the next 15 years do you want to see the income of the 400 top taxpayers rise by another 777% and their tax rates drop by another 40% while your numbers remains the same or worse? The rich have already made their choice. What are you going to do?]
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