Paulson Billionaire Warren Buffett, left, and former U.S. Treasury Secretary Henry Paulson discuss the economy on stage at the Greater Omaha Chamber of Commerce annual meeting. (AP Photo/Nati Harnik)
Associated Press | Henry Paulson, the former Treasury chief, and
billionaire Warren Buffett said U.S. taxpayers will recover every cent
paid out to banks during the economic meltdown and may even turn a
profit.
The staunch Democrat investor and the Treasury secretary under
President George W. Bush spoke onstage Tuesday before 2,400 at the
Greater Omaha Chamber of Commerce’s annual meeting.
Paulson in his recently released book defended the government which scrambled to prevent failing U.S. banks from dragging down the global economy with them.
“As bad as this is, when we look back it’s not as bad as it could have been,” Paulson said.
And he said the United States is better off today than most countries.
“Every other major economy has many more significant challenges than we do,” Paulson said. But he said several significant challenges remain.
Paulson said he thinks compensation is normally out of whack on Wall Street, but now in the wake of all the government bailouts, many executive pay packages are excessive.
“I think today restraint is very much in order for the top people,” Paulson said.
Paulson’s 500-page book, “On the Brink: Inside the Race to Stop the Collapse of the Global Financial System,” offers a chronological account of the rush to prevent an economic disaster as Lehman Brothers and American International Group spun toward collapse in September 2008. Paulson served as treasury secretary from June 2006 to January 2009.
Buffett led the talk by asking Paulson about the book but didn’t make many comments himself.
Buffett said Paulson’s book gave him an appreciation of how well former President George W. Bush understood the economy and events during the crisis.
“Through the book, I gained more appreciation for what he did in this situation,” Buffett said.
But Buffett, the longtime Democrat, also pointed out Paulson’s positive statements about President Barrack Obama.
Buffett praised the actions of Paulson, Federal Reserve Chairman Ben Bernanke and Paulson’s successor, Treasury Secretary Timothy Geithner.
Paulson also thanked Buffett, an icon to thousands of investors, who advised the former Treasury chief during the worst days of the economic downturn.
“He was a real source of strength during the financial crisis,” Paulson said.
Buffett, is chairman and CEO of Omaha’s Berkshire Hathaway Inc., a holding company with a roughly $173 billion market capitalization.
He plowed $5 billion one in Paulson’s former firm, Goldman Sachs, as the company struggled.
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read this: WASHINGTON (MarketWatch) — Several members of the Federal Reserve are impatient about the size of the Federal Reserve’s $2 trillion balance sheet and want to start gradually selling some assets in the near future, according to a summary of their January closed door meeting released on Wednesday. However, others on the FOMC were worried that the assets sales could cause market disruptions and damage the recovery if they began before the economy was on solid footing. In general, the minutes reflect a wide range of views on the FOMC about the Fed’s exit from its ultra-low interest rate policy. The committee rejected one member’s attempt to add flexibility to its purchase plan of mortgage-backed securities to give the Fed the flexibility to buy or sell additional securities. The Fed’s economic outlook was little changed from its last forecast in November. The committee still expects a moderate recovery with the labor market remaining weak. Committee members continued to disagree on the inflation outlook, with one camp worried about deflation and another concerned about the risk of rising prices.
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