Buffett speaks: The economy has fallen off a cliff
The CEO of conglomerate Berkshire Hathaway told CNBC today that he thought the economy had fallen off a cliff.
And, as Frank James of the Chicago Tribune noted, Buffett said President Barack Obama needs to scale back his agenda, and congressional Democrats need to temporarily give up pet projects and stop actions that inflame the minority.
Meanwhile, congressional Republicans should stop opposing for the sake of opposing. “I think that the Republicans have an obligation to regard this as an economic war and to realize we need one leader and (be) in general support of that,” he said.
“Not only has the economy slowed down. People have changed their behavior like nothing I have ever seen,” Buffett said. “Luxury goods and that sort of thing have just sort of stopped. And that’s why Wal-Mart is doing well.”
Investors seemed to agree with the Oracle of Omaha’s assessment of the economy. The Dow Jones Industrial Average fell 80 points, or 1.2%, to 6,547 on Monday, its lowest close since April 14, 1997, and its seventh loss in the last 10 sessions.
Buffett, thought to be the greatest investor of all time, told CNBC that the Obama administration’s message on the economy was muddled and needed serious clarification. Stern words from a man who actively supported the president in last fall’s election.
At the same time, however, he also chided Republicans for beating up on the administration, which has been in office for less than two months.
The tradeoff: Obama and the Democratic Party should not use the crisis to “roll” the Republicans and pass contentious measures.
Ultimately, he said, the administration will play a significant role in turning the economy around, but he cautioned the turnaround will take time. “You can get fearful very quickly, but you don’t get confident, you know, in five minutes.”
The uncertainty coming out of the administration is one reason why the stock market has fallen substantially since Obama took off. The Dow is off about 21% since Jan. 16, the last trading day before Barack Obama was sworn in as president.
Buffett also said he opposes the Obama-backed Employee Free Choice Act (or “card check” bill), which would make it easier for workers to form unions by eliminating employer mandated secret ballot elections.