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<\/a><\/p>\nWarren Buffett rolled up his sleeves on the Fox Business Network<\/strong> in a very candid interview<\/a> with the channel\u2019s Liz Claman, in which he discussed CEOs of failing banks, reconfirming Ben Bernanke, and his Berkshire company. On the Bank Situation<\/strong><\/p>\n \u201cYou\u2019ll always have banks that are too big to fail. We can\u2019t operate in this world without very big banks\u2026If they are toppling the government will have to do something about it.\u201d This is contrary to conventional wisdom and of this writer. After a year we see that banks had more money than expected (witnessed in the pace in which they paid off their bailouts) and these government programs have done little to increase the pace of loans, since banks have found a way to get \u201cmoney for nothing.\u201d Why risk their resources if they are washed in capital from Uncle Sam?<\/p>\n Furthermore, these policies have only undermined moral hazard at a time it is so greatly needed. The US cannot be in the business of rewarding bad decision making.\u201dIf I were running things if a bank had to go to the government for help, the CEO and his wife would forfeit all their net worth\u2026I think you have to change the incentives. The incentives a few years ago were try and report higher quarterly earnings. It\u2019s nice to have carrots, but you need sticks. The idea that some guy who\u2019s worth $500 million leaves and only has $50 million left is not much of a stick as far as I\u2019m concerned.\u201d This was actually the highlight in the Buffett interview. We need a restoration of moral hazard in banking and that will only come when those responsible for bad decision making suffers for those choices.\u201dThe CEO has to be the chief risk officer for a bank.\u201d This is a great observation and a view that needs to be restored. This is best achieved, in my opinion, by letting banks fail. Any executives behind such will find themselves looking for something else to do for a living.<\/p>\n On members of Congress who feel Ben Bernanke should not be reconfirmed:<\/strong><\/p>\n \u201cThey ought to get down on their knees every night and thank the Lord that Bernanke was there through this. He took some unprecedented actions\u2026He took the actions that were necessary to prevent panic from paralyzing this country.\u201d \u201cUnprecedented\u201d often means unconstitutional and has led to the expansion of government like we have never seen in our history, even in the Great Depression. What he has done is created instability in our monetary policy by pumping dollars into the economy at a pace we have never seen. Furthermore, his bailouts of large corporations have undermined the normal functions of a free market economy, such as moral hazard. He has created an economy without risk, which is far from free market in design. What he has done is criminal\u2026two thumbs up for those members of Congress who wish to see him go.<\/p>\n On the future of Berkshire Hathaway\u2019s business acquisition<\/strong><\/p>\n \u201cWe\u2019ll keep buying businesses, as long as I\u2019m alive we\u2019ll keep buying businesses\u2026we\u2019ll try to buy them for cash, sometimes we may have to use some stock, but we\u2019ll use as little stock as possible.\u201d If the US economy continues to reel from the unstable monetary and fiscal policies of the Obama administration, large corporations like Berkshire Hathaway will continue to benefit from them. It should be no wonder that, when questioned about Tim Geithner, he replied \u201cI think he\u2019s terrific.\u201d Maybe for Buffett, but not the rest of the country.<\/p>\n ____________________________________________________________________________________________________<\/p>\n Kevin Price is the host of \u201cPrice of Business\u201d, M-F at 11 am on CNN 650 and CBS Radio and can be frequently found in the \u201cStrategy Room\u201d at FoxNews.com.<\/a> A syndicated columnist whose article appear at Reuters, Chicago Sun Times, USA Today, and other media, his BizPlusBlog.com<\/a> is ranked in the top 1 percent of all blogs by Technorati.<\/em> His articles also appear regularly at AmericanDailyReview.com<\/a> and RenewAmerica.com<\/a>, Examiner.com<\/a>, and others.<\/em><\/p>\n Share Investor Links<\/span><\/a><\/a><\/p>\n Share Investor Blog<\/a> – Stockmarket & Business commentary Recommended Amazon Reading<\/span><\/p>\n
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