Warren Buffett Watch

NBC News Warren Buffett and NBC's Tom Brokaw.

Dateline NBC aired portions last night (Sunday) of an interview with Warren Buffett by Tom Brokaw.  The conversation was taped late last week while Buffett was in Washington.

Buffett tells Brokaw that Barack Obama is the right "commander in chief for the economy" but warns that no one should expect a "miracle" turnaround in the next few months.

Buffett and Brokaw also covered many other topics, including Obama's leadership style, excessive executive compensation, the challenges facing Detroit's automakers, China, and the role of greed in good times and bad.

This is the second part of the complete transcript of that interview, as provided by NBC News.  CLICK FOR PART ONE OF THE TRANSCRIPT AND VIDEO.

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.

BUFFETT:

Yeah, well, they should-- they should be concerned about the deficit. But they should be more concerned about getting the economy working right. I-- I don't-- I mean, the-- there are consequences to printing money. And-- and they're not pleasant.

I-- I-- so there is no free lunch. And if we do the things we need to do now there's a cost to them. But we are in a war. This is an economic Pearl Harbor. And-- and, you know, we paid for the war later on, as (LAUGHTER) ...  But-- but we-- we still-- knew we had to win the war first.

And-- and this is a war that needs to be won. And-- and the sooner the better. Because every-- every time you read about 523,000, or whatever, those people losing their jobs in December, that's-- those are 523,000 human tragedies. I mean, it-- it-- I can think of nothing worse than going home and saying, you know, to a family that, "I've lost my job and we've got mortgage payments and food to buy."

And so we need to solve that one. And-- and we will have consequences to the kind of deficits we're running up. And-- and-- and some of them will be unpleasant. But I would rather face those consequences than to face the consequences of doing nothing.

BROKAW:

Do you think there's a possibility that-- unemployment will go to double digits before the end of the calendar year, 2009?

BUFFETT:

Well, I'm not good at predicting. But it-- it-- certainly it-- it's a possibility. It's a possibility. And if we'd done the wrong things I think it would have been a certainty.

BROKAW:

And what happens to all those people?

BUFFETT:

I think it's very tough. And I think, in terms of unemployment benefits, I mean, I think that-- I think people like me should be paying higher taxes. And, you know, and you'll-- you'll hear from people who say, "Well, why don't you pay it voluntarily?"

But a voluntarily tax system is not (LAUGHTER) a very good system. I mean, it-- we-- we-- we need the rich of the country contributing more, you know, while the, frankly, a lot of the people, I mean, millions and millions and millions of families are suffering.

BROKAW:

You live in the same house that you've lived in in Omaha for how long now?

BUFFETT:

Fifty-- fifty-- a little over 50 years, yeah.

BROKAW:

Were you ever tempted, in the last five years, to build one of those bigger houses? (LAUGHTER)

BUFFETT:

No. No. I-- I'm happy where I am. I-- you know, some-- (LAUGHTER) somebody said, one time, that success is getting what you want, and happiness is wanting what you get. You know, and I got that house 50 years ago and I love it. (LAUGHTER)

BROKAW:

And the last time I was in Omaha you were driving a Cadillac.

BUFFETT:

I'm driving a Cadillac still.

BROKAW:

General Motors product.

BUFFETT:

Right. Right.

BROKAW:

Are you-- are you storing away extra spare parts? (LAUGHTER)

BUFFETT:

No. No. I-- I-- I'm all for the-- I'm all for them. I mean, you know, Rick Wagner got handed a very, very, very tough hand. And then this economy has just decimated the-- but they've gotta come up with a business plan that works.

BROKAW:

And do you think they're on that track?

BUFFETT:

They're-- they may be starting on that track. But I would be very tough, if I were Congress however, handing money to-- to-- the big three-- to make sure they had a business plan that worked. And I-- I've said before, I would-- I would have the CEOs of those companies, and the head of the union, and anybody else that's-- a big party to this-- take the same downside risk as the American taxpayer.

For-- three quarters of their net worth. So if the American taxpayer ended up losing 20 percent of what they put up, these guys would lose along with them. Now I'd have a big bonus on the upside. But I think they ought to have-- they ought to have something meaningfully personally in the game when they come to Congress and the president with a business plan and say, "This will work." Okay. Let them back it up.

BROKAW:

Should there be an automobile czar who reports to the president to make sure that they're hitting the markers that are expected of them?

BUFFETT:

Well, there ought to be some system for making sure they hit the markers. But the best-- best way to have them hit the markers, Tom, is to have them so that if they don't hit those markers, if-- if it doesn't work, what they tell Congress, "We'll work." If it doesn't work they lose three quarters of their net worth or something like that.

BROKAW:

And what happens at the other end of the pipeline or the car dealers across the country?

BUFFETT:

Well, that-- that's why you want to have something that's gonna work in terms of the whole-- the whole system. And-- and-- part-- part of anything that's gonna work for the victory has to work for their dealers, or most of their dealers, eventually. And-- and-- and-- you want a realistic thing. Otherwise they'll just come up with a bunch of spreadsheets and-- and keep asking for more money.

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