February
19, 2008
"WARREN BUFFETT RECEIVES A
CALL FROM FRANKLIN ROOSEVELT "
Warren Buffett received a call early morning in September,
2001. Mr. Buffett had made a speech a few weeks before
that the American economic crisis may last for eight years,
certainly the stock market crisis. In August 2001, 1,100,000
became unemployed, but there was still an air of complacency
among most of the people. We received $600 per family,
a tax rebate from the government. There was the rebate
itself, its size, the timing has begun to point out that
there is something seriously wrong in the United States.
The telephone call came at a totally unexpected moment.
Warren always slept with a telephone next to his be and,
being a light sleeper, he picked it up. "Warren
Buffett," he said. He first didn't want to
understand, but the voice was very firm like in the movies.
"Warren, this is Franklin Roosevelt." Warren,
first didn't know how to adjust to the earning morning
reality, but then he said, "Mr. President, are you
calling me from heaven?"
"Oh, no," boomed Roosevelt, "here I
am in Washington, D.C. at the oval office. I am back."
It was somewhat of a puzzlement so he tried to remain
quiet and listen to Roosevelt. "Actually, my son,
it is more enjoyable than in the past. You have air conditioning,
you have calculators, computers, international telephone
which I can dial, three-way telephone contact with anybody
in the world. Quite frankly, it's much easier to
run the world in 2001 than the United States in 1933."
Warren said, "Are you going to run the whole world,
Mr. President?"
He said, "Well, it looks like it because everything
is international and somebody has to take the leadership.
By jolly, nobody has taken the leadership now for the
last fifty years. Look at the mess the world is in."
But still adjusting to the unusual tone, Buffett said,
"How did you get back to the Oval Office, Mr. President?"
He said, "Well, it was an extraordinary step. Congress
held an extraordinary session and they called up God,
and God released me for eight years to clean up the mess."
Warren couldn't agree with him more. He said, "Well,
what would be your policy, Mr. President?"
"Well," he said, "it was frankly easier
in my time. All I had to say in 1933 was we have nothing
to Fear but Fear itself. We were a small country of 140
million people. ...and now, 70 years later, look at what
we have. The WT, IMF, NAFTA, the European Common Market,
everything is interrelated. If anything happens in any
part of the world, there is a flight from the dollar which
hits us back in the United States. We didn't have
these problems. Warren, my time was a linear feature.
I simply told Harry Hopkins to create four or five million
new jobs. I established fifteen agencies in the first
hundred days, and off we go. In 1936 – you people
don't remember – but in 1936 after my first
term, we have manufactured as many automobiles as at the
beginning of the Depression. Now, quite frankly, I don't
see any way that in four years we can make such progress.
So my son, Warren, you are right. Four years is not enough,
maybe eight. Three is much more complex.
Warren was getting deeper. "What would be your leading
policy, international policy?"
Roosevelt was quiet for a while. He was after all a politician
and he said, "Let's leave that issue a little
bit out of our discussions. The problem I see is as follows.
In 1933, we had a nation of 140 million people, and there
was maximum unemployment, 25%. Another 25% would have
really been a revolution, but we managed to stop the decline.
Now, in the whole world today you have unemployment of
at least a hundred million people. It can easily sink
into 200, 300 million and people would suffer and it would
solve nothing. And the problems could multiply even greater.
I cannot bring in programs on a worldwide basis to build
swimming pools, airports, roads. It's almost impossible.
And you see the problem of money.
"If you recall, I brought in the Social Security
system and 15% of our people got protected.
Today, everybody is protected, everybody
has this 401(k) which frankly personally, I didn't
have an even the Roosevelt Family could have used it.
And most people's 401 (k) has declined 50% in the
year 2000. A 50% decline in assets, what happens? People
sell their homes, prices decline. We need extraordinary
steps with extraordinary people."
"You know, Mr. President," Warren Buffett
said, "We never met."
"No," said Roosevelt - I looked it up on the
computer. You were born seventy years ago so you were
just born when I was first inaugurated. Do you know if
I am in this job for eight years, I will be inaugurated
six times? Only Joseph Stalin ruled 30 years. And you
know, every day to sit in the Oval Office is an entirely
major difference between 1933 and the year 2000. Nobody
cares whether I am on crutches, whether I am in a wheelchair.
People don't care, they only care about money, and
maybe that's better."
Buffett tried to interrupt. He said, "You are right.
I was twelve or thirteen years old when you were fighting
for the world on Omaha Beach. I did visit Omaha Beach,
and I gave a major donation. In fact, every year I make
a big payment to the Omaha Beach Fund. I never forget,
Mr. President, that you led the whole world to freedom.
Omaha Beach is something very dear to my heard. But coming
back, Mr. President, what is the major problem in the
world in your view today?"
Roosevelt finally stopped being a politician and got down
to facts. "My son, Warren, the problem is High Living.
The problem is borrowing money, spending big, and when
the dancing stops all the tragedies begin to happen. And
we don't know how to get off the dance floor.
"Now, I want to tell you what my policy is. I want
to induce you to the U.S. Army. After all, I am Commander
in Chief and I need people like you around me. I cannot
be a politician in running this nation – I have
to be like a real Commander in Chief. We need a number
of people from all over the world who have great financial
brains. You remember Joe Kennedy? I wasn't really
fair to him. The man was a genius. He always knew how
to make money and he never got into debt. I want Joe Kennedy
back. Then you have this fellow Ruben from Goldman Sashs.
Chairman McKensey Martin of the Federal Reserve in the
early 30's. Don't forget Professor Erhardt
from Germany, Helmut Schmidt. We need these people. I
can get people from anywhere in the world whenever they
are. Warren started to smile a bit when he said, "But
Mr. President, most of those people are dead."
He said, "Oh, no, that doesn't make any difference.
It doesn't make any goddamn difference. If I want
them, I will have them, because I am not the President
of the United States who is also the Accredited president
of the World. If I want them, I will get them. You job
is to line everybody up."
Buffett was taking notes. This was probably the most important
unusual session he had ever had. He was not really used
to taking orders, but now he enjoyed it. He was forming,
after all, the world's monetary cabinet in the 21st
century.
"And Mr. President, what would be your slogan? In
1933, you stated 'The only fear we have is fear
itself.' In 2001, I say, my son, in 2001 I have
to tell the world to "Live Decently." The
only fear we have to fear is high living and extravagance.
We have to wipe out forever the concept that we can spend
every penny, we can borrow every penny and live safely
in this universe. Our enemy is not Russia, our enemy is
not Germany, not Japan, our enemy is unsecured credit.
The enemy is within us."
