Can You Get It Over The Counter?

Only if you take two. The punchline to a Viagra joke seems appropriate here. Warren Buffet is suddenly on board the idea of a second “stimulus” bill. Comparing the first one to a half a Viagra tablet.

“I think that a second one may well be called for,” Warren Buffett, the CEO of Berkshire Hathaway, told “Good Morning America” today. But, he added, “you hope it doesn’t get watered down in many ways.”

Buffett cautioned that a second stimulus package, like the first, won’t be “a panacea,” because stimulus packages take time to work. He criticized lawmakers’ work on the first stimulus package, which contained $787 billion in spending.

“Our first stimulus bill … was sort of like taking half a tablet of Viagra and having also a bunch of candy mixed in … as if everybody was putting in enough for their own constituents,” he said. “It doesn’t have really quite the wall that might have been anticipated there.”

With all due respect to Buffet, he was widely touted as an adviser to Obama during the campaign. Buffet is also widely known as a buy-and-hold investor.

He is, frankly, personally invested in Obama. Therefore, his advice is to be taken with a grain of salt.  

What I would pay a lot more attention to in this piece is this tidbit:

The U.S. unemployment rate, which currently stands at 9.5 percent, still “has a ways to go” before it peaks, he said. His own company, he said, had to lay off 500 people.

“We didn’t want to do it, and if we saw things coming back we wouldn’t do it,” he said.

That says a lot more about where Buffet is coming from here. Berkshire Hathaway laying off is huge news, not of the good sort.

He has a lot riding on a recovery and a lot to lose if none comes along. He, being personally invested here, is almost duty bound to try to get it over the counter.

Really, really sorry for that mental image.

Via Memeorandum

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2 Responses to Can You Get It Over The Counter?

  1. crosspatch says:

    When the states begin to release hoards of prisoners from lack of revenue, we are going to see the real price of “stimulus”.

  2. Andrew X says:

    No economist I, but this post suddenly shot a bolt of clarity into my brain that I thought I’d share:

    If a stimulus is a genuine effective ploy to attack unemployment, does it not stand to reason that, after employment goes up, it will at some point go down again? THEN what? Just “another stimulus”, and then another, and then another, ad infinitum……?

    This is of course like responding to personal unemployment by going ahead and sending back six of those credit card offers, and then maxing them out when they arrive.

    The only, the ONLY, way this could work for you is if you take major cash advances on those cards and DIRECTLY invest them in a business start-up, and pray it suceeds.

    So the ONLY way a stimulus can work is by being directly invested in businesses, small and large, that will generate profits that will soon pay for themselves, the stimulus and more.

    Anyone get even a HINT that that is what these stimulus dollars are being spent on, and will be spent on in the future? Right.

    Ergo…. it will not work. A = A.

    So, exactly how brilliant do I have to be to understand this?

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