1.25.2009

Warren Buffett Needs to Read My Blog

I am a huge fan of Warren Buffett, whose value-seeking, slow-and-steady approach to investment and life contrasts with so much of the flash-in-the-pan, get-rich-quick scheming you see out there. So I was a bit disappointed to read in Marginal Revolution that his take on the current recession is to "throw everything at it."

With all due respect, Mr. Buffett, you should know that crisis often leads to action for action's sake, which isn't always good leadership and can in fact lead to all sorts of negative and unintended consequences. (David Brooks on the New York Times is among those leery of a big bailout.)

And while I agree with Mr. Buffett that economists have no idea what's going on and what to do, I'm nervous about "throw everything against the wall and see what sticks" approaches, such as what I've heard from both Buffett and Obama. Such uncertainty is bound to keep businesses and individuals on the sidelines until they can clearly divine what sort of playing field the government is going to set up.

Let's hope that between a all-star economics team, a perceptive commander in chief, a willing Congress, and a transparent process, we can quickly get to a plan of action that, if not perfect, is at least clear enough that businesses and individuals can get back to work. In contrast, "everything and the kitchen sink" may prolong the impasse.
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