Warren Buffett & Carol Loomis Pt. 2

  • Aired:  11/27/12
  •  | Views: 62,975

Warren Buffett and Carol Loomis explain how those catching the financial crumbs falling off the American economic table can make a lot of money. (4:45)

(CHEERS AND APPLAUSE).

>> Jon: WELCOME BACK, WE'RE TALKING WITH WARREN BUFFETT AND CAROL LOOMIS.

YOU KNOW, WE'RE TALKING A LITTLE BIT ABOUT -- I CONSIDER YOU SORT OF AN ICON OF THE VALUE ECONOMY

AS OPPOSED TO -- I DON'T EVEN WANT TO SAY THE GROWTH ECONOMY, BUT THIS, LIKE -- FOR INSTANCE,

THE FINANCIAL SECTOR BECAME -- I DON'T KNOW THE EXACT TERM, BUT SOMETHING LIKE 20% OF OUR

ECONOMY OVER THE LAST TEN OR 20 YEARS.

THAT SEEMS LIKE AN AWFUL VOLATILE SECTOR TO BE RELIED UPON TO DRIVE THAT MUCH OF THE G.D.P.

IS THAT INCORRECT OR CORRECT?

>> WELL, MORE AND MORE THE "FORBES" 400 COME FROM THE FINANCIAL ARENA.

WE'VE GOT A HUGE ECONOMY AND PEOPLE THAT CATCH THE CRUMBS FALLING OFF THE TABLE CAN MAKE A

LOT OF MONEY.

>> Jon: THAT'S AN INCREDIBLY HONORABLE WAY TO DESCRIBE THEM.

(LAUGHTER) CRUMB CATCHERS!

(LAUGHTER) DO YOU THINK WE HAVE A SATISFACTORY DOMESTIC ECONOMIC POLICY?

>> WELL, I THINK WHAT MADE AMERICA GREAT IS GOING TO CONTINUE TO WORK.

BUT I THINK THAT, YOU KNOW, THE LAST YEAR -- COUPLE OF YEARS WASHINGTON'S KIND OF TESTED THE

PATIENCE OF THE REST OF -- T -- BUT WE'VE GOT 312 MILLION PEOPLE THAT I DON'T THINK 535 CAN

IMPEDE THEIR PROGRESS OVER TIME.

>> Jon: NOW, YOU GUYS HAVE BEEN FRIENDS FOR A LONG TIME.

>> 45 YEARS.

>> Jon: 45 YEARS.

HE IS -- I DON'T KNOW, THE EIGHTH LARGEST COMPANY OR THE --

>> I THINK IT'S SEVENTH, ACTUALLY.

ANYWAY, HIGH.

>> Jon: AND YOU'RE A VERY NICE WOMAN WHO'S DONE VERY WELL FOR YOURSELF.

DO YOU RESENT HIS SUCCESS?

(LAUGHTER) ARE YOU A -- WHEN YOU TALK TO HIM, DO YOU SAY "WHY DON'T YOU DISTRIBUTE THE WEALTH?"

>> THAT'S THE INITIAL FIVE MINUTES OF EVERY CONVERSATION WE HAVE.

(LAUGHTER) I GET INTO THIS.

>> Jon: THE FIRST QUESTION SHE ASKS ME IS "WHY AREN'T I IN YOUR WILL?" (LAUGHTER).

>> Jon: WELL, LET ME JUST -- WHY ISN'T SHE IN YOUR WILL?

(LAUGHTER)

>> NOW I WANT TO HEAR THE ANSWER.

(LAUGHTER)

>> LET'S CHANGE THE SUBJECT.

I WILL POINT OUT IN THE LAST TEN YEARS I HAVE PROBABLY PAID TAXES-- COUNTING PAYROLL TAXES--

AT A LOWER RATE THAN CAROL HAS.

IT'S WRONG.

>> Jon: IS IT BECAUSE WE'VE GOT ON THE A PLACE WHERE WE ARE VALUING THE INVESTOR CLASS MORE

THAN THE WORKING CLASS?

BECAUSE I'M STUNNED NOW AT THE CONFLATION OF UNOBSTRUCTED CAPITALISM AND THE AMERICAN DREAM.

SOMEHOW THAT'S BEEN CONFLATED ON THAT SIDE OF THE RIGHT WING ECONOMICS THAT YOU CANNOT IMPEDE

THE CAPITALISTS IN ANY WAY IF YOU WANT THE AMERICAN DREAM.

BUT THAT STRIKES ME AS FALSE.

THAT UNIONS, WORKER PROTECTIONS, THAT'S AN INOCULATION AGAINST SOCIALISM AND COMMUNISM.

>> YEAH, THEY THINK THAT I SHOULD BE A PROTECTED SPECIES, KIND OF LIKE THE BALD EAGLE OR

SOME KIND OF THING.

THAT IF ANYTHING IS DONE IT WILL KILL -- I'M PLAY SOMEPLACE ELSE, EXACTLY.

AND 20 YEARS AGO, THE "FORBES" 400 HAD AN AGGREGATE WEALTH OF $300 BILLION.

NOW IT'S MORE THAN QUINTUPLED.

THAT HAS NOT HAPPENED WITH THE MIDDLE-CLASS.

>> Jon: ALSO, PRODUCTIVITY OF WORKERS HAS DOUBLED YET MEDIAN INCOME HAS STAYED STAGNANT.

>> YEAH.

YEAH.

>> VERY TRUE.

>> AND I DON'T THINK THE AMERICAN PUBLIC REALLY UNDERSTANDS THAT.

IT KIND OF SNUCK UP ON THEM.

THE TAX RATE -- I MEAN, YOU'VE GOT -- OF THE 400 HIGHEST INCOMES IN THE UNITED STATES IN

2009, THE MOST RECENT YEARS WE HAVE FIGURES FOR, A QUARTER OF THE PEOPLE PAID TAXES AT A RATE

LESS THAN 15%.

THE PAYROLL TAX WAS 15.3% IN THAT YEAR.

AND SIX OF THEM PAID NOTHING AT ALL.

I MEAN, THEY WEREN'T PART OF THE 47%.

-- THEY WERE PART OF THE 47%.

THESE PEOPLE WERE BIG-TIME MOOCHERS.

(APPLAUSE).

>> Jon: OH, PEOPLE ARE GOING TO CLAP FOR THAT.

WE'LL RUN OUT OF TIME.

BUT THIS IDEA THAT BECAUSE IN BANGLADESH AND CHINA THEY ACCEPT WORKING CONDITIONS THAT

AMERICANS WOULD NOT CONSIDER OPTIMAL THAT YOU CAN'T ASK FOR ANYTHING ANYMORE BECAUSE, HEY,

MAN, WE'LL JUST SEND OUR STUFF OVER THERE.

AND I UNDERSTAND THAT BUT THERE HAS TO BE SOME SENSE OF DOMESTIC POLICY THAT KEEPS THAT IN THERE, YES?

>> RIGHT.

>> Jon: WELL, I'M VERY GLAD.

I WOULD LIKE THE TWO OF YOU, IF I MAY, TO KEEP YOU IN A CURIO CABINET.

BECAUSE YOU ARE THE TWO NICEST PEOPLE I THINK I'VE MET.

(LAUGHTER) AND IF I COULD JUST KEEP YOU IN THERE AND OPEN IT AND GO IN AND TAKE A PEEK AT YOU EVERY NOW AND THEN.

(CHEERS AND APPLAUSE) WARREN BUFFETT, IT'S ON THE BACK SHELVES NOW, "TAP DANCING TO

WORK." TWO OF THE NICEST COMMUNISTS YOU WILL EVER MEET IN YOUR LIFE.

WARREN BUFFETT AND CAROL LOOMIS.

BERKSHIRE HATHAWAY AND "FORTUNE" MAGAZINE.

WE'LL BE RIGHT BACK AFTER THIS.

(CHEERS AND APPLAUSE)

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