Buffett praises U.S. recovery efforts
The legendary investor says he doesn't see 'green shoots' but that 'things aren't getting worse either.'
NEW YORK (CNNMoney.com) -- Warren Buffett praised the U.S. government Tuesday for its efforts to heal the economy, but the influential investor said he expects a slow recovery as consumers remain wary of spending.
Buffett said U.S. officials have done "a terrific job, all things considered" to help forestall the worst economic crisis since the Great Depression.
"We were right at the brink," Buffett told Carol Loomis, Fortune senior editor at large, at the magazine's Most Powerful Women Summit in California. "This country was becoming not only dysfunctional, but nearly inoperative."
In fact, Bank of America chief executive Ken Lewis may have "inadvertently" helped save the financial system a year ago by arranging for BofA (BAC, Fortune 500) to buy troubled Merrill Lynch in "virtually a 24-hour period," according to Buffett.
If Lewis hadn't, Buffett said Merrill "would have been gone in a nanosecond," joining Lehman Brothers in going out of business.
While he does not see the "green shoots" of economic renewal, Buffett said "I don't see things getting worse either."
He said the housing market has shown signs of improvement and that markets in certain parts of the country could stabilize within a year.
But the pullback in consumer spending that has occurred as unemployment has risen to a 25-year high could remain in place for some time, he said.
"I think that change in behavior is going to be long lasting, and that may mean that the recovery will be quite slow," he said.
Looking back, Buffett said the head of American International Group (AIG, Fortune 500) contacted him last year looking for help raising money shortly before the troubled insurer was rescued by the government.
"Don't waste your time on me," Buffett told said he told Robert Willumstad, then the chief executive officer of AIG. "I'm not going to be able to do anything for you."
Buffett said he was also contacted by Barclays with a request to provide insurance for the British bank's bid to buy Lehman Brothers last year. Buffett said he requested additional details from the bank but didn't learn until 10 months later that a Barclays executive had tried to contact him on his cell phone, which he didn't understand how to operate.
"Don't try to get in touch with me by cell phone," he said.
Buffett's Berkshire Hathaway Inc. (BRK.A) invests in more than 70 businesses, including various insurance and reinsurance companies and public utilities.