Warren Buffett, on cnbc this morning, made clear that he thinks we need the bailout.

Billionaire investor Warren Buffett, calling the market turmoil an economic Pearl Harbor,'' said Treasury Secretary Henry Paulson's $700 billion proposal to prop up the U.S. financial system isabsolutely necessary.”

The market could not have taken another week'' like last week, Buffett told CNBC today, a day after saying his Berkshire Hathaway Inc. will buy a $5 billion stake in Goldman Sachs Group Inc.I think it was the last thing Hank Paulson wanted to do, but there’s no Plan B for this.”

And:

I am betting on the Congress doing the right thing for the American public and passing this bill,'' Buffett said. The economy iseverybody’s problem,” he said, likening it to “a bathtub — you can’t have cold water in the front and hot water in the back.”

And:

“I certainly have a vote of confidence in Goldman and vote of confidence in Congress,” said Buffett, who is investing in the firm after it lost 40 percent of its market value in the past year.

I think Buffett and Cheney are right and Gingrich is wrong on this one. I am not happy about Bernanke’s yield to maturity bias, and I would prefer to allow private sector bidders to participate alongside the Treasury in this reverse auction process, but we have a credit crisis.

The credit markets are freezing up.

Auto loans are hard to come by, mortgages and refinancings are becoming scarce, and soon lines of credit for perfectly healthy small businesses are going to dry up. They won’t be able to pay suppliers and they won’t be able to meet payroll.

You can’t wish this stuff away because some of those who damaged the system are going to participate in its rescue. It may not be just, but neither is the fact that congressional miscreants like Barney Frank and Chris Dodd hold such important authority after their abysmal public conduct.