The Oracle of Omaha told CNBC this morning that it's just plan "common sense" -- "we're still in a recession."
If you've been following Warren Buffett's statements on the economy lately you may be a bit confused. Earlier this month, in an appearance with Microsoft CEO Steve Balmer, Buffett said "we're not going to have a double-dip recession at all." (Presumably this is because, according to Buffett, the first recession never really ended.)
Earlier this week, the National Bureau of Economic Research, the independent body that tracks downturns in the U.S., recently announced that the recession ended in June 2009. But in an interview with CNBC's Becky Quick, Buffett disputed that notion:
BECKY: The NBER said this week that the-- recession officially ended back in June of last year.
BUFFETT: Well, they define it differently. (Laughs.) But I-- I mean, I-- I define it-- I think we're in a recession until real per capita GDP gets back to where it was-- before. That is not the way the National Bureau of Economic Research measures it. But I will tell you that to any-- on any common sense definition, the average American is below where he was before, or his family, in terms of real income, GDP. We're still in a recession. And-- and we're not gonna be out of it for awhile, but we will get out of it.
Buffett added that most small businesses "have come back somewhat" but haven't approached anything near their pre-crisis levels. Banks, Buffett said, are sitting on "trillions" and "dying to get the money out." A host of bad loans and a still sagging consumer, he suggested, have prlonged the downturn. Here's more:
BUFFETT: Our businesses are coming back-- on average, we've got 70-some businesses. But most of them-- the great majority are coming back slowly. If you take our railroad business, and our railroad business is typical of the other railroads in the company. If you take the peak period for shipments and then you go all the way down to the bottom, we're 61 percent of the way back up. That's better, I think, than most businesses are in the country. I don't think most businesses are 61 percent-- our-- our carpet business, our brick business, our insulation business, they're not back 61 percent, but they are moving back