Liz Claman of Fox Business Channel quotes or paraphrases the Berkshire chairman and vice chairman:
Question: Wells Fargo Chairman said he didn’t want to take TARP and said some of gov’t programs were asinine - Munger - do you agree? Buffett - do you agree with Munger?
Munger: Gov’t reacting to biggest financial crisis in 70 yrs. decisions are being made in a hurry and under pressure. Unreasonable to expect perfect agreement with all of one’s own ideas. I think the gov’t is entitled to be judged more leniently when it’s doing the best it can. Of course there’s gonna be some reactions that are foolish. I happen to share one of the troubles as the WFC exec in that I’m pretty blunt. The accounting principle that says your earnings go up as credit is destroyed - I happen to think that’s insane accounting. And the people that voted it into the effect ought to be removed from the accounting board.
Buffett: The gov’t really were facing a situation close to a total meltdown in September. Commercial paper market froze up which would mean trouble meeting payrolls. We really were looking into the abyss at that time. Overall I commend the actions that were taken. To expect perfection from people working 20 hour days and getting hit by new and sometimes bad information - when you’re getting punched from all sides - you’re not gonna do everything perfectly. I think overall they did a very good job….. All banks aren’t alike by a long shot. In our opinion Wells Fargo is a fabulous bank and has advantages that others don’t have. I would recommend all of you that you go to the internet and read Jamie Dimon’s letter to shareholders. (JPMorgan Chairman & CEO) Jamie did a great job writing about what caused it and what could be done in the future. Look it up - it’s long - but worth reading.