Menu

BLOG

Alt text

An easy fix for our economy from Warren Buffet

Root causes. Elegant solutions. Maybe it's because I am an engineer by education that I love to find the really simple solutions to complicated problems. That's really the entire mission of Operating Principals. Businesses seem to address symptoms of problems with complicated solutions that just exacerbate the underlying issue. Too bad our politicians seem to do the same.
I had a real beef with TARP. Setting aside morals,  giving money to shore up the banks didn't solve the root of the problem. Billions of dollars of mortgages were still underwater and our economy had to absorb the impact of all those foreclosures and lost investments. If the government had used the money to buy the mortgages, which was the original plan, both the banks and the homeowners would have been bailed out at the same time, lessening the shock to our economy. Our recovery would have started sooner.
Today our economy is still dragging, but it's not due to business malaise. Corporate profits are at a record high as is the stock market. The problem is that the housing market, and the jobs that depend on the housing market, is still lagging. Warren Buffett, on Charlie Rose, had an elegant solution. All we need is more household creation to soak up the excess housing inventory. Shouldn't we be encouraging the immigration of families?  Instead of focusing on stemming the tide of illegal immigrants, we should be providing incentives for families of moderate means to live here and, hopefully, buy  houses.
So simple. So elegant. So politically incorrect.
In Economy, TARP, Root causes, Elegant solutions
By Karen Phelan
HTML Comment Box is loading comments...