- The Washington Times - Tuesday, December 10, 2013

Which world leader holds the distinction of making the “greatest economic statement of all time”? According to Warren Buffett, it’s George W. Bush.

During recent meeting in Maryland with 20 MBA students, the billionaire investor gave the former president credit for keenly understanding the stakes of the 2008 financial crisis.

“There was $3.5 trillion in money market funds and $175 billion of funds flowed out in the first three days after Lehman failed,” Mr. Buffett said in reply to a question about Goldman Sachs, according to the notes from the meeting. “All money market funds held commercial paper. Companies like GE had a lot of commercial paper. After this, American industry literally stopped. George Bush said, ‘If money doesn’t loosen up, this sucker will go down’ — I believe this was the greatest economic statement of all time.”

Mr. Buffett said that cash can be like “oxygen” for a economy in dire straits and Mr. Bush recognized the immediate danger that not having any posed to the world at the time.

“This is why he backed up [former Treasury Secretary Henry] Paulson and [Federal Reserve chairman Ben] Bernanke,” Mr. Buffett said. “In September 2008, we came right to the abyss. If Paulson and Bernanke had not intervened, in two more days it would have been all over. BRK always has $20 billion or more in cash. It sounds crazy, never need anything like it, but some day in the next 100 years when the world stops again, we will be ready.”

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.


Click to Read More

Click to Hide