Buffett, Krugman, and the Red Sox

Yesterday, some of us witnessed the greatest rally since 1929. The Boston Red Sox were down 7-0 in the seventh inning of an ALCS elimination game. But they didn’t stop playing. In 2.5 innings, the Sox turned it around and won 8-7.

Th economy is rapidly deteriorating and uncertainty is high, as reflected by stock market volatility. No one knows for sure when things will get better. Most would agree that things will get worse first. But there should be no doubt that this economy and this stock market will recover.

Today’s New York Times Op-Ed section included pieces written by Warren Buffett, arguably the greatest investor of all time, and Paul Krugman, the year’s recipient of the Nobel Prize in economics. Buffett is basically telling us that today’s stock market is the investment opportunity of a lifetime. Krugman calls on government to stop quibbling about deficits and increase spending now. These people are smarter than you and me. Here’s some of what they had to say.

Buffett: Buy American. I Am
“Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”

Krugman: Let’s Get Fiscal
"And this is also a good time to engage in some serious infrastructure spending, which the country badly needs in any case. The usual argument against public works as economic stimulus is that they take too long: by the time you get around to repairing that bridge and upgrading that rail line, the slump is over and the stimulus isn’t needed. Well, that argument has no force now, since the chances that this slump will be over anytime soon are virtually nil. So let’s get those projects rolling."

You can find these articles at New York Times Opinion.