Billionaire Warren Buffett said unemployment will likely climb a lot higher depending upon how effective the nation’s policies are, but he remains optimistic over the long term.
Buffett said the nation’s leaders need to support President Barack Obama’s efforts to repair the economy because fear is dominating Americans’ behavior and the economy has basically followed the worst-case scenario he envisioned. “It’s fallen off a cliff,” Buffett said today during a live appearance on CNBC. “Not only has the economy slowed down a lot, but people have really changed their habits like I haven’t seen.”
Buffett said the changes are reflected in the results of Berkshire Hathaway Inc.’s subsidiaries. He said Berkshire’s jewelry companies have suffered, but more people have been willing to switch to Geico to save money on car insurance. He predicted that unemployment will likely 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’s ever been created,” Buffett says.