Tue, May 07, 2013 - Page 15 News List

Warren Buffett optimistic on US economic policy

AFP, WASHINGTON

Billionaire Warren Buffett is praising the policies of both US President Barack Obama and his predecessor, former US president George W. Bush, for moving the US economy in the right direction.

US stocks soared to new closing records on Friday after a strong US jobs report showed that unemployment fell to 7.5 percent, reviving confidence in the US’ economic recovery.

The 82-year-old investor, known as the “Oracle of Omaha,” said he was optimistic that stock prices would continue to rise.

“They don’t look overpriced. They certainly look more attractive than fixed-income investments to me,” he told ABC’s This Week television talk show in an interview that aired on Sunday.

Buffett said the US economy has been improving gradually over the past four years and it will take time before the US experiences more rapid growth.

However, he praised the monetary and fiscal stimulus measures enacted under Bush and Obama.

“We’ve had a lot of fiscal stimulus. We’ve had an extraordinary amount of monetary stimulus and I think those were the right things to be doing considering the incredible situation that existed in 2008,” he said. “Nothing is perfect, but we had some huge problems in 2008 and our country is doing reasonably well coming out of that.”

“It’s a lot slower than people would like, but it was a lot bigger problem than any of us had ever seen,” Buffett added. “I generally approve of what ... the Bush administration did. I approve of what the Obama administration has done.”

However, he also criticized the political discourse in Washington for becoming “more and more partisan.”

“So many elections are determined by the primaries, and not the November elections, that it does tend to push both sides to the extremes and to cause them to dig in and feel that they can’t bend from positions,” Buffett said.

The chief executive of Berkshire Hathaway, a holding company of about 70 businesses, also spoke in favor of immigration reform that would offer foreign students the chance to become US citizens.

He said the US would benefit by making structural changes to ensure women are not relegated to a small sector of the economy.

The US Department of Labor report found that the US economy added 165,000 jobs last month, well above market expectations, and also revised upward estimates from the previous two months.

The gains came even as taxes rose and US government spending tightened under the sharp “sequester” cuts, which still threaten to hold economic growth back this year.

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