Jack Byrne's magic business touch has been all about the basics paired with high drama.

Once hailed as the Babe Ruth of insurance, he was the man who long ago saved Geico, the automobile insurer that later became a household name with the help of clever advertising series. Now Byrne, a longtime partner and pal of Warren Buffett, is fully retired, with time to ponder the trouble with the economy in general and one company in particular.

At 76, Byrne sees nothing but trouble from the U.S. credit crisis. He also worries about the trade deficit and the dollar's falling value, together with rising inflation — all signs, he believes, of America's diminishing power in the world economy.

"I'm an old man. Old men get grouchy and depressed, but I think the U.S. credit markets are going to get bludgeoned," Byrne said of the worst of the troubles. "We've only seen half of it."

He also offered a brutally honest assessment of the nine years of no profits at Internet retailer Overstock.com, a company run by his youngest and, he says, "Don Quixote-like" son.

"It really went into a ditch," Byrne said in an interview from Etna, N.H., where he lives part of the year. He also keeps a home in a Salt Lake City suburb. The Roman Catholic family was drawn to Mormon Utah during the 1990s because of the skiing and his sons' business dealings here.

Byrne was chairman of Salt Lake City-based Overstock for three different periods. At times he appeared to part with his son Patrick, who "wanted to grow fast. I said, 'Let's get the homework done right."' The company proceeded to blunder an information-technology overhaul.

At first, Jack Byrne refused to put up any money for Overstock. He advised his son they'd come out better by just piling the cash needed to start the business into a large bonfire. "We'll dance," he suggested.

In the end Jack Byrne invested tens of millions. "In fact, it wasn't a terrible idea," he said.

Jack Byrne said that after much initial skepticism he believed his son was "right all along" about another thing: a highly public battle and lawsuits with short-sellers and analysts. The CEO accused traders and analysts of conspiring to damage the company's stock

The Securities and Exchange Commission is starting to tighten down on naked short selling, a transaction that can allow traders to avoid risks in making bets that a company's stock will fall.

The attack on Wall Street initially embarrassed his father. "These were his friends that I was taking on," Patrick Byrne said.

"Naked shorting is Patrick's deal," his father replied. "I give him credit for pursuing evil. I think that's wonderful — but that's his fight. I would rather him spend his time on getting things right with the company, not on that jihad."

Share prices recently plunged after the company reported another quarterly loss, but both Byrnes believe Overstock is poised to turn a profit this year on a trend of rising cash flow.

"I'm thrilled to see the progress that has been made," Jack Byrne said when he reappeared at a shareholder's meeting in the spring. "When I left, they were in a ditch," he said, teasing his son, "Patrick said I pushed them into the ditch."

"I did not," he protested.

After more banter at the shareholder's meeting, Patrick allowed, "I drove it into the ditch, and now we're driving it out of a ditch."

But then, "Patrick was always right since he was a little boy," quips Jack Byrne.

The other sons are John J. Byrne of Alta, Utah, a real-estate financier and a new owner of Alyeska Resort near Anchorage, Alaska; and Mark Byrne, who got his start as a hedge fund manager for Buffett and is chairman of Bermuda-based Flagstone Reinsurance Holdings Ltd.

The legend of John "Jack" Byrne goes back to Traveler's Insurance Co. In 1975, he was passed over for the No. 1 position after rising quickly through the ranks to executive vice president. Furious, he quit. "That was the worst day of his life," said Patrick Byrne.

It turned out, however, to be his best career move. He went on to run his own companies to wide acclaim. He "made insurance look sexy," Forbes magazine said in a 2000 retrospective headlined, "See Jack Run."

Known for turning a colorful phrase, the self-described "Irish guy from New Jersey" hit his first home run at Geico, now owned by Buffett's Berkshire Hathaway Inc. No expense was too minor to escape notice: Geico calculated it could shrink bills slightly to weigh less than an ounce and save pennies on postage.

"He was Mr. Cost," Patrick Byrne said.

One of the first things he did for Geico was demand approval for a rate hike in New Jersey. Told no, Byrne yanked Geico's license to do business out of a pocket, using a blunt phrase to describe its value, and handed it over to the state's insurance superintendent. He pulled Geico out of New Jersey, laying off thousands. He raised premiums elsewhere and shed unprofitable divisions. He served as chairman of Geico from 1976 to 1985.

For a dozen years until January, Byrne was chairman of White Mountains Insurance Group Ltd., a holding company for dozens of insurers. He also did two stints as chief executive of that firm — 1985 to 1997 and again when he was called out of retirement from 2000 to 2002.

He retired from all but personal business and philanthropy in January. Byrne's favorite charities are Dartmouth, cancer research and an area of New Hampshire and Vermont called the Upper Valley, where he supports housing for battered woman and education for their children.

"It's been a running gag — my father's been 'retiring' for 15 years," said Patrick Byrne, who is now trying to enlist his father back to Overstock to run an insurance-and-banking division.