There's plenty of bearishness about America's economic prospects, says Warren Buffett. Pessimists should take a longer-term view. While the US economy is growing more slowly than it did before the global financial crisis, "even 2% growth in one generation will produce $19,000 more per capita, not per household of real GDP It doesn't match our best years, but it's pretty damn good," he tells Politico.com.
More importantly, innovation and productivity, the two factors that underpin future growth, remain robust. "If you go back 100 years the farms around where I live here were producing 30 bushels of corn per acre. Now they're producing 160 bushels of corn per acre."
In the shorter term, Buffett is particularly bullish on housing. After the crash, "it didn't come back as fast as I initially thought it would". However, it's finally "been getting progressively stronger, particularly in the last year". The reason behind this is that during recessions and the immediate aftermath, "people double up and move in with their in-laws", but now they are finally moving into their own houses again, which "translates into new housing starts".
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However, Buffett is less optimistic about the prospects for the newspaper industry. While he still reads a newspaper every day, he admits that he's an outlier. "Newspapers are going to go downhill the transition to the internet so far hasn't worked." National newspapers such as The New York Times and The Wall Street Journal may still be an exception, but for local newspapers, "even with the economy improving, circulation goes down [and] advertising goes down and what used to be a virtuous circle turns into a vicious circle".
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