JULIA: The underwear indicator is bad.
BUFFETT: Yeah, right, underwear is going down. (Laughs.)
JULIA: Looking across the consumer businesses you own, do you have a sense of when the consumer economy will pick up?
BUFFETT: No. I will know when it does. I get very, very contemporaneous figures on it. So when it happens, I'll know. But there's nothing in the figures today that tells me what's going to happen tomorrow. What they do tell me is that today it hasn't picked up yet.
JULIA: The global economic downturn is a big topic of conversation here. Yesterday I know there was a big panel discussion on it. From everything I've heard, it sounds like the mood was very glum. I've heard somber. I've heard glum. It was not a positive mood. Do you agree with that sentiment?
BUFFETT: Well, I would say that right now we're in a very, very tough period. We've been in it - it really took off last September, mid-September, when it hit the financial world like nothing we've ever seen, and that's gotten spilled over into the economy. And it's a tough period now. On the other hand, this movie will have a good ending.
JULIA: Now, good ending over what sort of time period?
BUFFETT: (Laughs). I don't know how long the movie will be. I know the ending will be good but I don't know whether its a two-hour movie or a four-hour movie.
JULIA: Well, you've said that the stimulus has done little, not enough, to get the economy moving. Do you think that people here agree with you on that?
BUFFETT: Well, I don't know about people agreeing with me, but yeah, I think they probably, generally. But the stimulus was never designed to act fast. People hoped it would start trickling in. In general, I think, and this is no criticism of the administration because I believe in the stimulus and would probably believe in another one, they may be overrated in terms of their ability to end the recession fast.
JULIA: But if you're advocating another one, are they overrated?
BUFFETT: I think they're useful, but I think that anybody who looks on them as a panacea is making a mistake. But they're useful, they're useful.
JULIA: What do you think should be done now in terms of, do you think there should be another stimulus right now?
BUFFETT: I think there probably should be. But I wouldn't expect miracles out of it.
JULIA: But so little of the 800-billion dollar stimulus has already been spent. Does it make sense to do another stimulus now, or do we want until some of that money, or more of that money, is out there?
BUFFETT: Well, I would. If you had another one you'd try to load as little on the Christmas tree as possible for specific constituencies, and you would try to get it spent fast. But the President said that originally, let's try to go with the shovel-ready projects. And then Congress got into the act and I think watered it down some.
JULIA: So if the stimulus is, a stimulus is, multiple stimuli, not a panacea, what is the solution?
BUFFETT: There is no silver bullet. I mean, the original cause of this was the housing bubble. Now a lot of things were contributing to it and flowed out of it and all of that. We built a couple million housing units a year. We formed a million, three-hundred thousand households a year, surprise, we had too many houses at a point. You can't work that off in a day, or a week, or a month. The best thing we can do is not to be building a lot of new houses now. I mean, we will work off the excess inventory faster. If you want to end the recession as soon as possible, you do nothing to encourage new housing construction. Very tough on the home builders but that is the prescription for getting supply and demand back into balance.
JULIA: And so what does that mean in terms of interest rates?
BUFFETT: Well, you want low interest rates. The more affordable houses are, I mean people have to have a job too, but low interest rates are a boon to housing in that they mean people qualify for owning housing of a given type that wouldn't otherwise. But we still have too many houses. And the only way to do that, we can either form more households, get all the 14-year-olds to start living together, which they would probably like, (laughs), or we can blow up a bunch of houses, which I don't think any of us would like, or we can produce more than the household formation and we will use up the inventory and we will get back to a vibrant economy.
JULIA: You supported President Obama -
BUFFETT: 100 percent.
JULIA: And what do you think of his behavior, his decisions since he's been in office?
BUFFETT: He's been terrific. I think it's very important that the people in the country, just as in the 30's, that they have a leader they believe in. And they've got good reason to believe in him. Plus he communicates extraordinarily well so they can understand what he's doing and why he's doing it and what the timetables may be and all that sort of thing. So we have the right person in the White House.
JULIA: But you feel like the stimulus hasn't done enough, so do you agree with the way he's handled the financial crisis?
BUFFETT: Well, the Congress wrote the stimulus bill. Yeah. (Smiles.)
JULIA: You've mentioned that you're not worried about inflation right now. You're concerned about inflation down the line. What can the government and the Fed do right now to minimize that risk?
BUFFETT: Well, right now they're pouring the medicine on. Unfortunately the medicine will have an after-effect, and it will be inflation, and the question is how much and how extreme? We're going to apply a lot of medicine, and we're likely to get a lot of inflation down the road. But it's better to have the patient recover than to sit there and say I'm worried about the after-effects of the medicine so we'll just ignore it.
JULIA: Oil prices have come way down over the past six weeks. I think they're now around 60 dollars. Will that help the situation?
BUFFETT: Well, it always helps. I mean, we are importing 10-million plus barrels a day of oil and that's a tax that the rest of the world imposes on us. We give them goods and services that we produce, or IOUs, in exchange for that. And the cheaper we buy oil, the better off we are.
JULIA: And where do you think oil prices are going to head in another year?
BUFFETT: (Laughs.) If I knew it, I wouldn't tell you, but I don't know it. (Laughs.)