Warren Buffett says economy is weaker than people think
NEW YORK (CNNMoney) — Warren Buffett is worth $70 billion. He is the second-most wealthiest person in the world. But he recognizes that the growing income inequality gap in the United States is a big problem. And it may have helped Donald Trump defeat Hillary Clinton.
“The Forbes 400 had $93 billion in 1982, and they got $2.4 trillion now. And that’s 25 times as much,” Buffett told CNN’s Poppy Harlow in an exclusive interview in Omaha on Thursday.
“If you’ve been working 40 hours a week, maybe holding a second job, and, you know, you work with the Little League and you’ve been a good parent, and you’re really struggling, you think, ‘What’s wrong with this picture?'” he added.
“You wanna change the picture, and apparently, more went into the voting booth and decided that Trump was the answer,” Buffett said.
Later in the interview, when Harlow asked him who was winning in this economy, Buffett was blunt.
“The rich. Guys like me,” he said.
But even though Buffett is doing well, he admitted the economy isn’t in fantastic shape. And that probably helped fuel the rise of Trump, as well as Bernie Sanders, the Democratic senator from Vermont who challenged Clinton for the nomination.
“Bernie Sanders said to a good bit of American people, ‘You’re getting the short end of the stick. And it isn’t your fault,'” Buffett said. But he added that he did not think Sanders would have a better shot of beating Trump than Clinton did.
He even cast doubt on recent numbers showing that the U.S. economy grew at a nearly 3% annualized pace in the third quarter.
“it’s softer than I think people think it is,” Buffett said about the economy. “I don’t mean it’s weak, but it’s softer than people think.”
“The GDP, you know, comes out of the third quarter 2.9%. I don’t think it was a 2.9% quarter,” he added with a chuckle. “If I had to bet, if they end up revising the third quarter, you know, it’ll get revised downward.”
Still, Buffett remained optimistic that things will change for the better. He said the focus needs to be on improving incomes for average, working class Americans.
“Capitalism, the market system works,” he said. “You want to keep a system where the goose lays more golden eggs every year. We’ve got that. Now, the question is: How do those eggs get distributed? And that is where the system needs some adjusting.”
But Buffett, as he has said in the past, does not think raising the minimum wage is the answer. He continued to stress that an earned income tax credit would do more to boost income than a minimum wage increase.
And Buffett continued to be hopeful that economic conditions will improve for all Americans — and not just the wealthy.
“You don’t have to worry about having more stuff. You do have to worry about whether people who are perfectly decent citizens working hard are getting enough of it,” he said.
But Buffett stressed that the U.S. economy is not nearly in as bad shape as Trump and others have made it out to be. Here’s his response when asked if America was already great, harping Trump’s famous slogan.
“It’s more than great,” he said, laughing. “But it will become greater. But America is great.”