Buffett Bullish on America Despite Middle Class Decline

Warren Buffett and Rebecca Jarvis discuss Wall Street vs Main Street and the struggling middle class on "Real Biz."
6:29 | 04/24/14

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Transcript for Buffett Bullish on America Despite Middle Class Decline
Who want to turn to Warren Buffett I caught up with him at his annual power lunch at Smith and once he in New York City. To benefit San Francisco's glide foundation since 2000. He's raised more than sixteen million dollars to help hungry displaced families there. And just this week we learned that America's middle class is no longer the richest in the world so I asked him. How can you be so bullish on America when that's the case take a look. What was the toughest question about it lights. Some say -- somebody asked me who my favorite comedian was -- time and I did. I just think of a lot of my -- but I did want to pick yeah what are your top three or help. I can I came up with Billy Crystal -- saw -- -- performance -- but. You know Michael I go back to the days of Jack -- and some of those -- -- I could I could come up with -- you've never heard of product. A lot of people are looking back on those days that Jack Benny and they're thinking where they -- -- especially this week when you get news like. US is no longer the richest middle class in the world now -- now -- Canada yeah holding that position. How troubling is that. Well I've read that story and I don't exactly I was measured but all I know is that our GDP per capita. You know is is that what 52000 or something that they wanted to do dog we are very very very rich country and it's gone up in my lifetime one person's lifetime. Six for one in real terms not inflation just real terms so imagine. My father and mother you know in the waiting room in 1930 and -- their little boy would see something was going to be six times per person. Output and in the country it's a remarkable country and and and it's not over yet I mean this country will be doing better haven't won in thirty years is now. If the middle class war to continue losing ground now as asked by this measure they have lost -- significant amount grabbed ten that he's just really hold that. You're bullish on America for -- That is it's not a good thing I mean that the Forbes 400 this past year had an aggregate net worth of 2.000000000002e+24. And twenty billion. That's an all time record by some margin. In 1982 the first here today but -- -- they did -- it was would like. 9090 billion so it's up 2122. Times for one since 1980 -- That is not been through the middle class so it is really true that the particularly the folklorist. I've gotten far far wealthier and more and more of the national pie has moved to them and away from. Way from the middle class. What is -- is the number one driver that trend of the acceleration. Of inequality in the disparity between the top and bottom. I think is actually a natural consequence of -- market system over time that it's more more specialized. And the market system. As wonderful creative -- Produced goods and services like nothing else and that's what people want that it encourages people going to the right jobs and all that sort of thing so. You don't want it for a too much of the art system that that it has produced -- bountiful America. But it will more more leave behind the people whose skills are well adapted to -- market system let. Talk about what Americans are seeing now you have the stock market near all time highs but and flip side of things. Most investors the average investors have their lowest amount of trust in stocks -- Now that they're wrong. It trusts and stocks distrust and American business. I -- that's all stocks are as a part of American business and American businesses -- very very well for people. For a long long time now there's lots of -- -- options and there can be market panics and there can be all kinds of things but. Business will keep turning out more and more goods nobody earning more and more money -- -- and the people -- -- American business are going to do well over time. I don't have the faintest idea what's going to happen next year or two years from our next week or next month. But I do know the ten years -- now twenty years now thirty years now the people who own stocks will have done well. Do you think though that we could be at a tipping point here if if corporate America in this year doesn't make big investments. In some cases -- some wage increases and really think about. Growing and expanding their businesses. Does that hurt the framework of this recovery. Well I think -- business -- think about it. Every business stripes -- more goods this year than last year including all the ones Berkshire has. We spent eleven billion dollars on plant and equipment last year and we'll spend more this year American business. It wants to do more business and and they're doing it I mean and that's what's happened in the last four years ever since the fall of 2009 year after -- Are rare road is hearing a lot more goods and it was two or three -- four years -- there's somebody -- -- but we're moving them. So which is always -- -- for the economy and recovery at the culture -- that. Our economy is is moving forward and has been moving forward ever since the fall of 2009. There's not been galloping forward but it -- but we're forward perfectly decent clip. Is there something that would get it out right -- what everybody wants but you know I -- sure you can drop a million dollars from the sky and every household. And if they don't rush jobs rather -- you know money won't be weren't much after that but you could create an -- his various ways that -- society but. The trouble is in the -- -- economics you always have to say and that what there's a big and that what do. Pushing that -- that the sort of stimulus for. You've been very vocal about the housing recovery. If I am a potential first time home buyer in most the markets in America I've got a job prices have increased so much -- my community. Do live by -- -- this very what does Warren -- will. Like say if if you if you plan to live. In the locale where you are for some time I don't the only survivor that is only a year later two years later if you plan to live. For a significant period of time by all of -- -- it won the best -- -- made you know 55 years ago 56 bought the house I'm living in today. -- all kinds happiness today you can buy it was very very cheap money -- mean you're you're getting a terrific deal on the mortgage now so. So if I put it by my slugger if I don't I'll publish if I knew that I had -- going to speculate treasury futures idea -- -- -- -- -- sort of.

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