Warren Buffett: 'My Class Has Won' And 'It's Been A Rout'
There are reasons for optimism inside the U.S. economy, according to Warren Buffett. Just not for everyone.
The billionaire investor, cited as the third-richest person in the world by Forbes, said in an interview with the CEO of BusinessWire -- a unit of Buffett's own conglomerate Berkshire Hathaway that publishes press releases -- that while there have been improvements in some areas of the economy, many others haven't fared so well.
Winners, Buffett says, include corporations, who have seen good equity returns, as well as the wealthiest American citizens. The losers? The housing market and average American worker.
"Through the tax code, there has been class warfare waged, and my class has won," Buffett told Business Wire CEO Cathy Baron Tamraz at a luncheon in honor of the company's 50th anniversary. "It's been a rout."
Between 1979 and 2007, the richest one percent of Americans saw their incomes rise by 275 percent, according to a recent report by the Congressional Budget Office. The bottom fifth of Americans experience only a 20 percent jump.
It's no secret that Buffett is opposed to the increasing income inequality in the U.S. In August, the Berkshire Hathaway CEO criticized the low tax rates for the richest Americans, including himself, in an op-ed in The New York Times. His stance on raising taxes on the wealthy led to President Obama dubbing his proposal to boost taxes on millionaires the "Buffett rule."
Despite the less-than-stellar economy, Buffett has made two substantial investments in American businesses in recent months. In August, Buffett announced a $5 billion investment in struggling Bank of America. The bank has dealt with a series of publicity blunders, most notably a failed debit card fee, but some forsee a strong comeback in 2012.
Just this week Buffett also surprised many by investing $10.7 billion in IBM, rare for a man known for generally avoiding investments in tech companies.
Though, the American economy will recover -- albeit slowly -- according to Buffett, the situation in Europe may be more complicated due to the ties between the 17 euro zone nations.
"Don't ever give up the right to issue your own currency," Buffett said, referring to the institution of the standardized euro currency.
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