When asked about new government regulation of the financial industry, he said, "You want me to have enough rope so I can hang myself, but you just don't want me to have enough rope to hang the entire country." He called the current crisis an "economic Pearl Harbor." He says it's not the time to worry about who caused it, but instead focus on how to recover from it. He believes the country needs to come together to fight this economic war. "We have a common interest and objective to get this economy working again."

Buffett predicts that things will get worse before they get better. He thinks that unemployment will likely climb a lot higher before the recession is done. He said several times that all will be well though, because, "We do have the greatest economic machine that's ever been created."

When asked about banking recovery, Buffett believes the banks will recover. His position on the toxic assets is that now that they have been written down to market, "I'd rather buy those assets from the bank than anything else they've got. I can make more money on those assets," Buffett said. "No one believed housing could take such a big tumble, not even the rating agencies."

When asked about AIG (AIG) and whether the government should have stepped in, he said, "AIG was a huge risk to the system and it should never be allowed to happen again." But, he does think it was right for the government to step in because it was a "big house of cards" that could have fallen and caused even greater damage to our financial system.

He thinks even the 20 biggest banks under stress will survive. They can earn enough capital. If they just reduce their dividends for a couple of years and continue their current business practices, they'll be fine. He says, "the Fed's actions prevented things from getting worse."

The most important thing the government can do now is to get us to "trust banks again." He does think the Obama Administration should take even stronger moves to get the message across that Americans can trust their banks. He thinks the message from the Obama Administration, "needs clarity about what will be done for the financial system." He thinks the message has been muddled. But, he did say we have the right president for getting us out of this economic crisis.

Since Berkshire Hathaway (BRK.A) owns a private jet company that sells jets to many corporations, he disagrees with the president on corporate jets. "Berkshire has been better off because we have a plane waiting for me wherever I have to go. We've closed deals that wouldn't have gotten done if I didn't have a plane."

Lita Epstein has written more than 25 books including the Complete Idiot's Guide to Value Investing.