Billionaire Warren Buffett shared his thoughts on the American economy and newspapers with POLITICO Playbook. | Getty POLITICO Playbook The Playbook Interview: Warren Buffett The Sage of Omaha didn’t want to talk politics, but he shared his thoughts on the lingering effects of the recession, the media and his reading habits.

Warren Buffett doesn’t do many interviews these days, but when we took over Playbook, he said he would love to chat with us about his views of the economic and business climate. Buffett didn’t want to talk about politics, but his views are well known: He endorsed Hillary Clinton, and challenged Donald Trump to release his taxes. In a freewheeling chat Wednesday morning, the Berkshire Hathaway chairman said he is bullish on America and bearish on newspapers. He told us about the pile of books next to his chair and said that 2 percent economic growth isn’t too bad.

“It’s been over 240 years since 1776, it’s just been amazing what happened to a barren country with 2 million people that now turns out everything we do,” Buffett told us. “The expectations may have gotten a little unrealistic – [but] even 2 percent growth in one generation will produce $19,000 more – per capita, not per household – of real GDP. Just imagine, on average, a family of four, $76,000 of added GDP in one generation. So 2 percent growth will do wonders for this country starting from this space. It doesn’t match our best years, but it’s pretty damn good.”


“During my lifetime, here’s a guy that was born in 1930 … my lifetime real GDP per capita went up six for one,” he said. “Well, to think of an economy that already was among the top in the world, having in one person’s lifetime a six-for-one change in real output per capita, that’s staggering. That’s never happened in the history of the world. So, we had a lot of things come to bear in terms of energy and all kinds of industrial development … America learned how to unleash human potential.”

How will the economy improve?

“There’s two things that make it better: innovation and productivity, which are interlocked in certain ways. When you think of it, all of the products that you and I are using to make our lives better weren’t even around 30 years ago. It’s pretty extraordinary. And if you go back 100 years, every time I get in the dental chair, I think to myself, if this was 100 years ago, they’d be pouring whiskey down me and holding my arms. Now, I sit there and daydream about other stuff. So anything that improves experiences – what people want to do with the 24 hours in the day that they have. And secondly, what really counts is gains in productivity. 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. Well, that’s dramatic, and of course they take less people to do it as well, so, just up and down the line, you look at how many man-hours it takes to produce an auto now compared to 50 years ago. So, productivity – that’s the way the human race improves.”

Housing is his hot sector now:

“I would say that housing came back very late after the panic in 2008 and ‘09, and it’s starting to … it has showed continuing growth and momentum. But it didn’t come back as fast as I initially thought it would. And it’s been getting progressively stronger, particularly in the last year. That continues to this day. Household formations fall off a lot in recessions. People double up and move in with their in-laws, but eventually hormones win out. [laughter] And our population growth translates into new housing starts. Now, the one trend is people are moving more from living in single-family housing into rental. Sixty-two and a fraction percent now are in owner-occupied homes as opposed to rental. So there was more of an apartment development going on but now it’s translated to pretty good housing statistics, and we’re in a lot of areas that touch on that. We’re seeing a lot of strength there.”

Buffett is bearish on newspapers:

“Newspapers are going to go downhill. Most newspapers, the transition to the internet so far hasn’t worked in digital. The revenues don’t come in. There are a couple of exceptions for national newspapers -- The Wall Street Journal and The New York Times are in a different category. That doesn’t mean it necessarily works brilliantly for them, but they are a different business than a local newspaper. But local newspapers continue to decline at a very significant rate. And even with the economy improving, circulation goes down, advertising goes down, and it goes down in prosperous cities, it goes down in areas that are having urban troubles, it goes down in small towns – that’s what amazes me. A town of 10 or 20,000, where there’s no local TV station obviously, and really there’s nothing on the internet that tells you what’s going on in a town like that, but the circulation just goes down every month. And when circulation goes down, advertising is gonna go down, and what used to be a virtuous circle turns into a vicious circle. I still love newspapers! You’re talking to the last guy in the world. Someday you’ll come out and interview me, and you’ll see a guy with a landline phone, reading a print newspaper.”

On the residual effect of the “Great Recession”:

“What you’ve seen overall since 2008 and ‘09 – that was a wound to the American psyche. People were scared silly then … really we hadn’t had since the Great Depression. And you still see that in a lot of ways. But since the fall of 2009, we pretty much had 2 percent growth and people started talking sometimes about a double-dip recession; other times they talked about things accelerating. But if you really look at it … average it out, we’re showing 2 percent growth, which isn’t bad, but it does reflect I think still some … people that didn’t think the 2008 and ‘09 could happen, saw it happen and it scarred their attitudes for some period. Same thing happened in the Great Depression. People don’t get over that very quickly. When they started worrying about their money-market funds, and they start worrying about their jobs and they worry about the economy coming off the tracks, and banks and everything else, they don’t forget about that six months later.”

On American productivity:

“If you don’t improve productivity, you don’t go anyplace. And fortunately, we have a system -- we’re in the early innings of it, but we have a system where lots and lots and lots of people who are very smart are thinking about ways to both come up with new products, and to increase productivity and that’s the way we move ahead. And America is wonderfully positioned for that. Aside from the problem of weapons of mass destruction … which unfortunately is going to be with us forever, aside from that, the luckiest person born in history is the baby being born in the United States today.”

On his reading habits:

“I’m going to turn 86 -- I don’t read as well as I used to in terms of speed or anything like that. You slow down some on that. My children used to say I was a book with legs. I like reading biographies ... I love reading good political books, starting with ‘The Making of the President’ back in 1960 [by Theodore White]. I can’t get enough of them. There’s just a huge pile next to this chair I sit in, and my wife claims that the books are breeding. At night while we’re sleeping, she says, these damn books breed.”

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