Buffett to Dodd and Frank: "Let Them Go Broke!"

[Guest ValueCarl]

Is it not unusual for The Oracle to use by example, a more technology related company to show growth or turnaround than something more akin to his competencies?  ;D

 

 

UPDATE: Buffett: Managers Of Bailed Out Banks Should Go Broke      10/05 07:43 AM

 

 

 

(Adds further comments by Buffett on the economy.)

WASHINGTON (Dow Jones)--Chief executives of financial institutions bailed out by the federal government shouldn't walk away rich, Warren Buffett, chairman and chief executive of Berkshire Hathaway Inc. (BRK/A:$124,138.00,00$938.00,000.80%) (BRKA, BRKB), said Tuesday.

"I think there ought to be terrific downside for anybody running an institution where society has to step in and help for the good of society," Buffett said at a conference in Washington organized by Fortune magazine. "I think you should go broke."

Buffett was commenting on the recent financial crash and measures in the Dodd- Frank financial law passed earlier this year.

"I think one of the problems we still have is unbalanced incentives for managers of huge financial institutions," Buffett added.

The billionaire investor also commented on the broader economy, noting that it is improving though employment lags.

"When we meet two or three years for now, for sure unemployment will be far less and the economy will be humming," Buffett said.

Buffett pointed to rising sales at companies owned by Berkshire Hathaway (BRK/A:$124,138.00,00$938.00,000.80%) , such as Fort Worth, Texas-based TTI Inc., an electronic components distributor. " They're setting records there," he said.

Still, Buffett said that euro-zone countries could still run into broader financial difficulties as some countries struggle with public debt and that current U.S. policy could eventually fuel inflation.

"I think the European Union really gets tested. And I don't know how it comes out," he said.

During a question and answer session, Buffett said tax policy in the U.S. had become "distorted," with the wealthy not paying enough.

"My tax shelter really was the Bush administration--they took care of me," Buffett said. "I pay a lower tax rate than probably the cleaning lady that comes in. It just isn't the way the system should work."

Changing topics, Buffett said stocks are a better investment than bonds. "I can't imagine anyone having bonds in their portfolio when they could have equities," he said.

-By Jeffrey Sparshott, Dow Jones Newswires; 202-862-9291; jeffrey.sparshott@ dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http:// www.djnewsplus.com/nae/al?rnd=OEKbQKa1FirIAqqd7Y8XRQ%3D%3D. You can use this link on the day this article is published and the following day.

 

  (END) Dow Jones Newswires

  10-05-101043ET

  Copyright © 2010 Dow Jones & Company, Inc.