Buffett Says U.S. Economic Recovery "Very, Very Slow"; Talks With CNBC for 3 Hours
The "Oracle of Omaha" Warren Buffett said on Monday that the economy is slowly improving, but as consumer spending remains low, so will job growth.
"It's getting better, but at a very, very slow rate," Buffett said. "The jobs will come back, but it won't be fast."
Buffett, the CEO of Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B) appeared on CNBC for three hours Monday morning, where he tackled a variety of topics from the economic recovery to health care reform. The billionaire investor also talked about the eventual successors at his company.
The interview came just days after Buffett released his annual letter to Berkshire Hathaway shareholders.
Buffett is expecting job growth to remain slow until consumer demand improves, and said that some of his company’s subsidiaries like Shaw Carpet which laid off thousands of employees during the recession, will definitely employ more workers in three year, but not necessarily in the first half of this year.
Health care was described by Buffett as a "tapeworm" holding back the economic recovery. He noted that the average nation around the globe spends roughly 9 percent of their gross domestic product on health care, while the U.S. is currently spending 17 percent of its GDP on health care. On average there are more doctors and nurses per person in other countries compared to the U.S.
Buffett is hopeful that Congress can come to an agreement on the health system that will restrict costs more than the current proposals.
"Unfortunately, we came up with a bill that does not deal with the cost system much," Buffett said.
Like he often does, Buffett deflected questions about his successor at Berkshire Hathaway will be, as investors can continue to worry about the 79-year olds time remaining with the company.
Buffett did say that he has no plans to retire, and that he is healthy and still loves his job.
He added that when he does leave the company the investment duties will be likely split among three or more managers that will report the new CEO.
The culture of investing at Berkshire Hathaway, according to Buffett is so deeply ingrained that the board members would swiftly stop any new leader that tries to change the company’s style of business.
"I think of Berkshire as something special and they’ll keep it special," he iterated. "The organization would thrust out anybody that tried to go in a different direction."
In a potential foreshadowing of a future CEO candidate, Buffett praised the company's MidAmerican Energy CEO for his work, calling it "miraculous." He added that there are three potential candidates to take over for him as CEO, including one ready to take over now if needed.
Buffett's Omaha, Nebraska-based company showed a full-year profit increase of 61 percent in 2009, and has 80 companies selling everything from car insurance to ice cream.
The investment company recently made a $26.5 billion takeover of Burlington Northern Santa Fe Corp, which is the second-largest U.S. railroad and marks the biggest acquisition of Buffett's career. The move was seen as a big bet on the strong recovery of the U.S. economy.
Buffett added that the improving conditions in the U.S. economy are a positive result of the efforts made by Barack Obama, but he added that there will be little immediate impact on the attractiveness of stocks to investors.
"My enthusiasm for stocks is in direct proportion to how far they will go down. Stocks are a lot less attractive than they were a year ago."
Below are the videos from his appearance:
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