Buffett, Ballmer: US economy to avoid double dip

Business titans line up to challenge gloomy reports on America's prospects

By Stephen Foley
Sunday 23 October 2011 09:05

A dynamic and powerful US economy will not only avoid a double-dip recession but will continue to dominate the global scene, the most powerful leaders of corporate America predicted, dismissing gloomy assessments of the country's decline.

In a string of speeches, presentations and interviews at a development conference organised in the mountains of Montana, business leaders led by Warren Buffett and Jeff Immelt described how their own companies showed little sign of the pessimism that dominates public and political debate.

And Mr Buffett, feted as the Oracle of Omaha for his investment wisdom, declared himself "a huge bull" on the US. "This country works. The best is yet to come."

Mr Buffett and Mr Immelt run the two largest conglomerates in the US – Berkshire Hathaway and General Electric respectively – and both told an audience of financiers, executives and entrepreneurs at the Montana Economic Development Summit to look beyond gloomy headlines.

"We will not have a double-dip recession at all," Mr Buffett said. "I see our businesses coming back almost across the board. I've seen sentiment turn sour in the last three months or so, generally in the media, but I don't see that in our businesses. I see we're employing more people than a month ago, two months ago."

As the effects of the credit crunch dissipate, banks are more willing to lend to small businesses than is popularly credited, he said, citing the example of Wells Fargo, the US banking giant in which Berkshire has a stake. "It's night and day from a year, year and a half ago," Mr Buffett told the audience via a video link. "I know Wells Fargo would love to have $50bn more loans now. Go in and talk to the banker."

Bob Iger, the chief executive of Disney, told the conference that movie-making remained a powerful industry which could drive the US economy. "We're still in growth mode," he said. "We're just at the beginning of the beginning of the change. What you're seeing is an explosion of choice. Today is not only a multi-channel environment, but we have the opportunity to be entertained on the internet, there are more devices to access entertainment, and there is more control over how you're entertained and what you're entertained by. One industry to look at is the movie industry, because we're a great exporter."

Earlier, Steve Ballmer, chief executive of Microsoft, also contributed to the upbeat tone, saying that technological advances would continue to be made in the US, and that the US would therefore continue to be a world leader. "I am very enthusiastic what the future holds for our industry and what our industry will mean for growth in other industries," he said. "All areas of science today are moving forward more quickly. The speed of scientific breakthrough is accelerating."

Mr Immelt also pointed to improving orders across GE's businesses as evidence that the real economy was improving. The company is a major world player in industries as diverse as healthcare equipment, wind turbines, household appliances and jet engines, as well as finance.

After an "insane" period where the US economy was based on internal consumer spending, funded by debt, he said, the country should now focus on exports. American entrepreneurs would seize the moment. "Anger is not a strategy. Anger does not create growth. Only optimism creates growth," he said. "Be the contrarian. Everyone is mad today. Be happy."

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