In the world of investors, Warren Buffet is called the “Oracle of Omaha” because he is the most successful investor over the last 30 years. He has seen markets come and go, recessions come and go, bubbles come and go. He was Mr. “Steady as you go”. He also had credibility in my mind because he was an advisor to President Obama and a constant critic of the Bush economic policy. So when Warren Buffet said this weekend that the economy has fallen over a cliff it caught my attention.
Up to now, I believed that the economic problems we have could be worse. But when the voice of reason in the market says we are over the cliff then it can’t be any worse. Before I heard Buffet, I have to confess, I couldn’t separate the politics from the economics. I thought we had the luxury of being able to take the time to remind everyone that it was the unrestrained supply-side economics of Reagan-Bushx2 that got us here and it was time to hold the GOP accountable. I thought we had the luxury of thinking that Krugman was engaging in hyperbole when he said the stimulus spending was too little, too late and we could pull back from disaster. Who has time for politics or denial anymore? OK – Congress.
Sooner or later the pain on Main Street is going to transcend politics and we will have to pull together and figure this out. This is not about fear (although we should be afraid) but more about saving the Country –and it is time to start talking like that. Any student of history knows what can happen in times like this (see “World, 1929-1939”).