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Buffett: The Economy Has ‘Fallen Off a Cliff’

Investor tells CNBC unemployment level could climb a lot higher


Buffett: We fell off a cliff (CNBC, March 9, 2009) — Legendary investor Warren Buffett said Monday that the economy has ‘fallen off the cliff.’ CNBC’s Becky Quick reports. (02:08)

March 9, 2009

OMAHA, Neb. — Billionaire Warren Buffett remains confident that America’s best days are ahead, but he says the nation likely will face higher unemployment and eventually inflation because of the current economic crisis.

Buffett said the nation’s leaders need to emphasize a consistent message, and they should support President Barack Obama’s efforts to repair the economy because fear is dominating Americans’ behavior.

Buffett said the economy has basically followed the worst-case scenario he envisioned six months ago.

“It’s fallen off a cliff,” Buffett said Monday during a live appearance on cable network CNBC. “Not only has the economy slowed down a lot, but people have really changed their habits like I haven’t seen.” …

He predicted that unemployment will climb a lot higher before the recession is done, but he also reiterated his optimistic long-term view: “Everything will be all right. We do have the greatest economic machine that man has ever created.”

Fear and confusion have been driving consumer and investor behavior in recent months, Buffett said.

The nation’s leaders need to clear up the confusion before anyone will become more confident, and he said all 535 members of Congress should stop the partisan bickering about solutions. He said politicians should also stop trying to use the current economic crisis to force through other policy changes.

“We ought to defer most of the things that get people riled up,” Buffett said.

Buffett said he believes patriotic Republicans and Democrats will realize the nation is engaged in an economic war.

“What is required is a commander in chief that’s looked at like a commander in chief in a time of war,” Buffett said.

Whatever the government does to help the economy will likely benefit some people who made poor financial decisions, but Buffett said Americans should realize that everyone is in the same boat.

“The people that behaved well are no doubt going to find themselves taking care of the people who didn’t behave well,” Buffett said.

The current efforts to help revive the economy are likely to produce inflation that could be worse than what the country suffered in the late 1970s, Buffett said.

But even though the nation will have to pay for current policies with future inflation, Buffett said, the U.S. government still needs to act.

“We’re in a big war, and we’re going to use money to fight it,” he said.


Fed Report Shows Big Spike in Afghan Attacks

Image: Protesters in Afghanistan
Afghanis protest against the U.S. forces after an early-morning raid in Khost province, east of Kabul on Saturday, March 7, 2009. (Photo credit: Nishanuddin Khan / AP)

March 9, 2009

WASHINGTON — Attacks on Afghan security forces increased nearly threefold last year as U.S. officials struggled to find enough military staff to train them, according to a report that details the challenge President Barack Obama faces to stabilize the troubled nation. …

In a report released Monday, the Government Accountability Office says attacks on local forces in Afghanistan increased from 97 to 289 between October 2007 and October 2008. The national police force were most often targeted, losing an average of 56 officers each month in 2007 and 2008, GAO states. …


Time Running Out for U.S. Troops in Violent Mosul

Image: A U.S. soldier on patrol in Mosul.
A U.S. soldier of Bravo Company, 1-18 Infantry Battalion, on patrol in Mosul in February. U.S. troops must vacate cities by June 30, 2009 under an agreement with the Iraqis. (Photo credit: Erik de Castro / Reuters)

March 9, 2009

MOSUL, Iraq — Grenades lie unattended next to a west Mosul bazaar. Garbage bags throughout the city are searched daily for bombs. At a sprawling sheep market, Iraqi army soldiers are careful not to kick over rocks for fear of setting off hidden explosives.

War has ebbed in most parts of Iraq, but not in Mosul, the third-largest city and al-Qaida’s last stronghold in the fragile new democracy. And time is running out on the around-the-clock U.S. military patrols of Mosul. U.S. troops must vacate cities by June 30 under an agreement with the Iraqis, and President Barack Obama is ending all American combat operations after August 2010.

The Iraqi security forces are not sure they’ll be ready.

“If you don’t have the Americans, this is not going to be good,” said an Iraqi army captain who gave his name only as Ahmed to protect his family from insurgents. “I cannot take care of it.” …

In poverty-stricken Mosul, a Sunni-dominated city of about 2 million where the unemployment rate has risen even higher than the many trash piles, the U.S. military has long fought to contain al-Qaida from resurging in the rest of Iraq. …

Explosives are part of the daily cacophony in Mosul; the U.S. Army reported six bombs either found or detonated in the city last Thursday and Friday, one of which wounded an Iraqi soldier. Iraqi security forces themselves pose a threat: three American soldiers have been killed in Mosul since November by gunmen wearing Iraqi army or police uniforms.

The problems in Mosul “can put us off track and cause violence to really re-ignite in a greater way,” Lt. Gen. Lloyd Austin, the No. 2 U.S. general in Iraq, told reporters Monday.

But the military’s main military focus in Mosul is al-Qaida, where efforts to obliterate the terror group and other Sunni militants have failed over the years. …

It was also only recently that U.S. officials recognized al-Qaida’s ability to survive after repeated military assaults, said Lt. Col. Tom Cipolla, a 1st Calvary Division battalion commander stationed at the U.S. Army’s Marez base just outside Mosul.

“I’m not sure we really understood the level of the problem here early on,” Cipolla said in an interview last week. “And I’m not sure we really understood how embedded al-Qaida was becoming. … Al-Qaida in Iraq has proved to be a very resourceful enemy, capable of regenerating at a time when we thought it didn’t have that capability.”

Cipolla took his post three weeks ago after his predecessor, Lt. Col. Gary Derby, was killed Feb. 5 by a suicide car bomber. “I think we understand now that it is a fight that doesn’t stop. It is part of the environment here that will have to be dealt with for a very long time.” …

Cipolla thinks Iraq will ask U.S. combat forces to stay as long as al-Qaida remains a threat in Mosul. By nearly all accounts, that will take years. …


Related report: Iraqi army called in to patch up a ruined nation


Security Developments in Iraq

Following are security developments in Iraq on Monday, March 9, 2009, as reported by Reuters.

BASRA – A foreign civilian was killed in a rocket attack on a British military base in Basra in southern Iraq, Britain’s Ministry of Defense said on Monday.

MOSUL – Two policemen were killed when gunmen opened fire at their checkpoint in western Mosul, 240 miles north of Baghdad, on Sunday evening, police said.

BAGHDAD – Two members of a U.S. backed neighborhood patrol were wounded when gunmen opened fire on their checkpoint in the Jihad district of southwestern Baghdad, police said.

BAGHDAD – A bomb attached to a car wounded a man and seriously wounded his son in the al-Qadisiya district of southwestern Baghdad, police said.

TIKRIT – Governor of Salahudin province narrowly escaped death and five of his bodyguards were wounded when a roadside bomb struck his convoy just north of Tikrit, 95 miles north of Baghdad, on Sunday evening, police said.

MOSUL – Gunmen shot dead a college student in central Mosul, 240 miles north of Baghdad, on Sunday evening, police said.


U.S. Military Deaths in Iraq
As of Monday, March 9, 2009, at least 4,256 members of the U.S. military had died in the Iraq war since it began in March 2003, according to an Associated Press count. …

Latest identification:

Army 1st Lt. Daniel B. Hyde, 24, Modesto, Calif., died March 7, 2009 in Samarra after an explosive device struck his unit vehicle in Tikrit. He was assigned to the 2nd Battalion, 35th Infantry Regiment, 3rd Brigade Combat Team, 25th Infantry Division, Schofield Barracks, Hawaii.

Hyde played football, basketball and golf in high school, and was a member of at least two academic honor societies, maintaining a 4.20 GPA. He volunteered at Delta Blood Bank and worked at a golf course.

He graduated from the U.S. Military Academy in 2007.

He is survived by his parents, Glenda and Brian Hyde.

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2 Responses to “Economy Has ‘Fallen Off a Cliff’”
  1. Immelman for Congress » Blog Archive » House Rejects Afghan Pullout Says:

    […] Economy Has ‘Fallen Off a Cliff’ […]

  2. Immelman for Congress » Blog Archive » AfPak Bombings Show Taliban Reach Says:

    […] Economy Has ‘Fallen Off a Cliff’ […]

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