Investor Warren Buffett said the Federal Reserve and other policymakers are generally doing a good job, but it’s difficult to predict all the effects of interest rates remaining low for this long.
Buffett said on CNBC Monday that no one can predict the effects of prolonged low rates because it has never happened before, but the U.S. economy has substantially recovered from the depths of the recession in 2008.
“Very few people in 2009 would have dreamt that we could have this duration of low rates,” Buffett said.
But policymakers do have to be careful not to raise U.S. interest rates too far ahead of Europe and Japan because of unintended consequences of the imbalance, Buffett said.
Buffett appeared on CNBC on Monday after spending more than five hours answering questions at Berkshire Hathaway’s annual meeting Saturday. Berkshire vice chairman Charlie Munger and board member Bill Gates joined Buffett for part of the interview.
Munger said he thinks U.S. policymakers should have invested more in infrastructure to invigorate the economy after the recession instead of relying so much on fiscal policy.
“I strongly suspect that it was massively stupid for our government to rely so heavily on printing money and so lightly on fiscal stimulus for infrastructure. I think that happened by accident because our politicians couldn’t agree,” Munger said.
Buffett said choosing the next president will be important for the world, but it won’t derail the U.S. economy.
“Electing the wrong president won’t damage the U.S. economy,” said Buffett, who supports Democrat Hillary Clinton.
On another topic, Buffett said Valeant Pharmaceuticals’ practices were flawed, so he declined to invest Berkshire Hathaway’s money in the company after some Valeant investors urged him to look at the company.
“I don’t think you’d want your son to grow up and run a company the way Valeant was run,” Buffett said.
Munger, who also serves on a hospital board, was more direct in his criticism. “They were robbing our hospital. They raised a heart drug that old people really need by 500 percent.”
Valeant is dealing with intense scrutiny of its business practices, a huge drop in stock price and demands by insurers for discounts of its drug prices.
Buffett said he would be willing to sell Berkshire Hathaway’s big investments in American Express, Coca-Cola and other companies if he found a significantly better option, but he still believes in those companies.
Buffett said the tax implications are a factor in his decisions.
Buffett will again auction lunch for glide foundation
The most expensive lunch in the world will go on sale again next month when Warren Buffett auctions off a private meal.
Buffett has raised more than $20.2 million for the Glide Foundation that helps the homeless in San Francisco over the past 16 years.
The winning bid has topped $2 million in six of the past eight online auctions, but the record price remains $3,456,789 paid in 2012.
The auction will begin June 5 and continue through June 10 on .
The winner can invite up to seven friends to join the lunch at Smith & Wollensky steakhouse in New York City.
