Buffett on U.S. economy: 'The worst is behind us'

Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said the effects of the financial crisis and the recession will be felt “for a long time” as the global economy recovers. “The worst is behind us, but the pain will be felt for a long time from what happened,” Buffett said in previously recorded remarks played today at a conference at Airport City outside Tel Aviv. “We're inching forward, we're not galloping forward.” U.S. economic growth has slowed this year as a lack of jobs curbed consumer spending. The unemployment rate remained at 9.6 percent in September, near a 26-year high of 10.1 percent last October. Buffett, 80, said last month that he was “a huge bull” on the U.S. and reiterated that Omaha, Nebraska-based Berkshire was hiring. “We're going in the right direction,” Buffett said. The worst U.S. recession since the Great Depression ended in June 2009, the National Bureau of Economic Research said on Sept. 20. A recent slowdown raises the possibility of another slump. Economic growth decelerated to an annualized 1.7 percent rate in the second quarter from 3.7 percent in the first and 5 percent in the last three months of 2009, according to the Commerce Department. Buffett built Berkshire into a $200 billion company through four decades of stock picks and takeovers. The billionaire investor, also Berkshire's chief executive officer and biggest shareholder, bought Israeli toolmaker Iscar Metalworking Cos. in 2006 in his largest acquisition of a non-U.S. firm. Buffett plans to travel to Japan and India in the next year in search of opportunities. “We would love to acquire either a big independent company in Israel or other places,” Buffett said in an interview with Yariv Becher, Israeli Consul for Economic Affairs to the U.S. Midwest. “I think we'll do both.” Israel's economy has bounced back from the global crisis faster than many developed countries. The Bank of Israel is predicting growth of about 4 percent in 2010, rising from 0.8 percent in 2009. Exports climbed 19.9 percent in the second quarter, according to Israel's Central Bureau of Statistics. Exporters include technology companies such as Nice Systems Ltd. and the Israeli branch of Intel Corp.; Teva Pharmaceutical Industries Ltd., the world's largest maker of generic drugs; and Iscar, which produces precision metal-cutting tools. “If you go to the Middle East and you're looking for oil, skip” Israel, Buffett said. “If you're going looking for brains, just stop at Israel. You don't have to go anyplace else.” Buffett's pronouncements on the economy are watched by policy makers and investors. Buffett, the world's third-richest person, oversees more than 200,000 Berkshire employees who work for units selling insurance, building supplies and consumer goods. He was in China last month to visit carmaker BYD Co., where Berkshire has holdings valued at more than $1 billion. He'll travel to Japan and India in the next year to seek possible investments. Buffett told shareholders in February 2009 that “America's best days lie ahead” even though he wrote that the economy would be “in shambles” for the remainder of the year. Berkshire cut about 20,000 jobs in 2009, and profits advanced in the second half of that year. In November, the company said, “the credit crisis has abated.” Buffett predicted on May 2 that unemployment would decrease.