Warren Buffett: No econ textbook would predict current U.S. economic situation

Warren Buffett: No econ textbook would predict current U.S. economic situation
Yahoo! Finance video, YouTube

[Ed. – He’s right, but that may mean we need to check the premises embedded in our largely Keynesian economic axioms; i.e., the ones taught to students in textbooks.]

In an CNBC interview that aired Friday, Buffett noted that unemployment is at generation lows, yet inflation and interest rates are not rising. While at the same time the U.S. government continues to spend more money than it takes in.

“No economics textbook I know that was written in the first couple of thousand years that discussed even the possibility that you could have this sort of situation continue and have all variables stay more or less the same,” Buffett told CNBC’s Becky Quick on Thursday ahead of the annual Berkshire Hathaway shareholders meeting in Omaha on Saturday.

The Labor Department said Friday the unemployment rate fell to 3.6% in April, the lowest since 1969. However, inflation was up just 1.6% on a year-over-year basis in March. That’s well below the Federal Reserve’s 2% inflation target.

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