Warren Buffett on the Bailout and Taxes

Yes, yes, I know I should be in St. Louis. But I'm in Carlsbad, California, thanks to our corporate cousins at FORTUNE, who asked me to do a panel tomorrow at their annual Most Powerful Women Summit. This morning's program included a fascinating conversation between the magnificent Carol Loomis, who has been with FORTUNE now for more than 50 years and remains one of the best journalists on the planet, and her longtime buddy Warren Buffett, who lately has been dropping billions here and there--a $3-billion investment in GE yesterday, which came only eight days after he put $5 billion into Goldman Sachs.

Buffett is convinced this bailout is going to turn out to be a terrific deal for the federal government, assuming it buys these distressed assets at market prices, and quipped, "I would take 1% of the Treasury's action." (In fact, one proposal he made was to have private investors join in as partners in some of these deals, taking their cut only after the feds recoup the taxpayer investment.)

He had high praise for Treasury Secretary Hank Paulson, and urged whoever gets elected in November to keep him on into the next Administration. Buffett also said one of the unsung heroes of this crisis--which he described as "an economic Pearl Harbor"--has been FDIC Chairwoman Sheila Bair, who has managed to hold the banking system together in recent weeks by helping to engineer a series of takeovers. "In my book, she stands higher than any CEO in America today," Buffett said.

And Buffett had his usual wry commentary on the tax system, noting that he is now paying a lower rate than he ever has, including back when he delivered newspapers, and that it is lower than the tax rate paid by the cleaning lady in his office. "The government looks at me, and says, 'You're like the condor and the spotted owl. We have to protect you,' " Buffett said. And he noted that he is getting this bonanza without the use of any tax shelters, or even a tax planner. But then he quickly corrected himself: "I guess I do have a tax planner. His name is President Bush."

UPDATE: I just found another Buffett gem in my notes. "If each candidate would say who their Treasury Secretary would be, and we could have the Treasury Secretaries debate, we might learn more than having the Vice Presidents debate."