He was the face of steady financial leadership for years – investors, bankers and politicians hung on his every word. Universally lauded to the point of sanctification, Alan Greenspan was the spokesman for the U.S. economy and everyone loved him for it. There he was laughing on the cover of Time magazine in 2000, and a few years later flashing a satisfied grin as he prepared to step down and The Economist lamented that he'd be a "hard act to follow." But when he speaks now his optimism is less convincing.The world has turned on poor Alan, but thankfully another balding, bespectacled economic titan has stepped up in recent weeks – Warren Buffett has come out of his shell.
First, he was on “Charlie Rose,” backing up embattled Treasury Secretary Hank Paulson and acknowledging the necessity of the unpopular Congressional bailout plan (transcript).
Today, the press-shy Oracle of Omaha did what the President, Congress, Barack Obama, John McCain, cabinet members, media, and countless others have failed to do over the past month or so – inject a vote of confidence in the U.S. economy.
As journalists and pundits wondered through the ongoing financial crisis who would emerge as a credible, confident leader (Time magazine asking, "Who can lead us out of this mess?" seemed particularly dire), Buffett used one of the oldest PR plays in the book – an op-ed piece – to send a message to the world that he’s buying U.S. stocks with his personal account for the first time in years.
“…fears regarding the long-term prosperity of the nation’s many sound companies make no sense,” Buffett wrote in this morning’s New York Times while acknowledging there will be “hiccups” along the way. Wrote Buffett:
"Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over."
Buffett, who grew up in the Great Depression and was newly minted as the richest man in the world this month, wrote the speech that President Bush, or any politician boasting of a rescue, needed to give weeks ago. Granted, he carries a $62 billion bucket of credibility and BusinessWeek once called him “greatest stock market investor of modern times,” but in a time when the American economy needed leadership, no one stepped in until now.
Buffett is stepping into the public shoes of Greenspan (whom Bob Woodward obsequiously dubbed "Maestro," just a few short years ago) as the face of steady financial leadership in America. Greenspan's legacy has dipped as fast as the stock charts in recent weeks, but it’s clear that Buffett is increasingly willing to be the vocal spokesman for the American economy.
Give Buffett a gold PR star, too, for choosing to run his thoughts in the New York Times, rather than the Wall Street Journal. It was the Times last week that fronted a piece ripping the Greenspan legacy and noting that at least one economic heavyweight was right to question to risky derivatives that Greenspan championed -- his name is Warren Buffett.