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Warren Buffett: 'We're still in a recession'; 'the government did the right thing' (Videos)

Warren Buffett
(Evan Agostini/AP)

Warren Buffett, a financial leader and a bellwether of business, said we are still in a recession, but he also cautioned people against blaming the government.

The chairman of Berkshire Hathaway sat down with CNBC's Becky Quick to talk about the recession and the recovery.

"The government did the right thing in getting the economy going again," Buffett said.

In the second half of the interview, Buffett returned to the government's role in the recovery. He suggested that the Federal Reserve, rather than paying banks a quarter of percent on the trillion dollars on deposit, should charge a quarter of percent to leave their money on deposit to encourage banks to make loans.

The government's policies are not "kick-starting things as much as the American public would like," Buffett said. However, "we will come back regardless of how people feel about Washington. ... But it's not helpful to have people as unhappy as they are about what's going on in Washington."

Even though the National Bureau of Economic Research declared we were no longer in a recession, Buffett said: "We're in a recession until real per capita GDP gets back to where it was before. ... We're still in a recession and we're not gonna be out of it for a while. But we will get out of it."

Watch the interview here:























(Warren Buffett sits on the board of the Washington Post Company.)

By Melissa Bell  | September 23, 2010; 9:15 AM ET
Categories:  The Daily Catch  
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Comments

Warren Buffett said what needed to be said. I'm glad that he's calling it out for what we are still in.

Posted by: GenXer1 | September 23, 2010 12:24 PM | Report abuse

Hey Warren,

Re the recession: Duh.

Re the government did the right thing: of course you think that, they bailed out the corrupt Wall St banks you're in bed with!

Posted by: revolver | September 23, 2010 12:48 PM | Report abuse

"He suggested that the Federal Reserve, rather than paying banks a quarter of percent on the trillion dollars on deposit, should charge a quarter of percent to leave their money on deposit to encourage banks to make loans."

Absolutely right! ... there are three dead pools of capital 1) Cash on Corp balance sheets, 2) Bank Cash on reserve at the Fed, and 3) global CB reserves.

I call these dead pools because they tend to absorb stimulus funds and are not put to much productive work. Lifting spending on Capital expenditure helps release the first, Mr. Buffet's suggestion helps release the second. The third one is tricky, but just getting it to stop growing would be a major achievement... for that CBs must stop buying dollars to cheapen their own currencies. This effectively means a removal of the yuan peg, and other psuedo currency pegs...

Taking aim at these pools of capital is more effective than printing more and making them even bigger.

Posted by: hmackenzie | September 23, 2010 12:57 PM | Report abuse

should have read ... lifting taxes on capital expenditure... not lifting spending.

Posted by: hmackenzie | September 23, 2010 1:09 PM | Report abuse

You know, it is very refreshing to hear a true free-market captialist analyze the facts without a political axe to grind. Just plain common sense without the talking points...

Posted by: mandelm2001 | September 23, 2010 2:25 PM | Report abuse

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