Now if only Warren Buffett could fix the job market, too

By MITCHELL SCHNURMAN

mschnurman@star-telegram.com

Feel better yet?

Last week, we learned that the recession had ended, and on Tuesday, Warren Buffett doubled down on America. They’re two signs that better days are ahead.

The worst may not be over for the economy — just review the unemployment rate and consumer confidence — but for a while, Buffett is changing the narrative.

The world’s most respected investor isn’t merely bargain hunting in Fort Worth. In spending $34 billion for Burlington Northern Santa Fe, he says he’s putting his money on the capital of capitalism.

"It’s an all-in wager on the economic future of the United States," Buffett said.

He elaborated on the theme during an interview on CNBC.

"I believe this country will prosper, and you’ll have more people, moving more goods — 10, 20, 30 years from now, and the rails should benefit," he said.

It’s inspiring that Buffett, who’ll be 80 next year, continues to take the long view. And it should be instructive for investors, who’ve been flocking to bonds and hoarding cash while Buffett has been touting equities for the past year.

That’s how he became the world’s second-richest man — by investing when others are fearful.

But investment strategies are on the back burner for a lot of people today. They’re worried about the short term: landing a job, getting a raise or just surviving the next six months.

They may take some comfort in Buffett’s long-range faith in the U.S. economy. They may be glad to have heard last week that the gross domestic product grew 3.5 percent in the third quarter. That’s the first growth spurt in more than a year, which technically means that the long recession has ended.

But until companies start hiring and paychecks get a bump, it won’t feel like recovery in America.

Millions have lost jobs and taken pay cuts, and many are struggling to pay mortgages and credit card bills. Buffett’s big buyout has no effect on them at all.

Nationwide, the unemployment rate hit 9.8 percent in September, the highest level in 26 years. Most economists believe the number will rise and remain high for a while. Texas, which has weathered the downturn better than most states, lost 44,700 jobs in September and had an unemployment rate of 8.2 percent. The Fort Worth-Arlington area, traditionally a job-generating machine, had 10,400 fewer jobs than a year ago.

Growth in jobs and wages is crucial to confidence, and confidence drives consumer spending, which accounts for two-thirds of the economy. No surprise that consumer confidence remains low. It was worse nine months ago, and after recovering in the summer, it has fallen again.

In October, the Conference Board’s Present Situation Index, which measures the current view of the economy, was the lowest since February 1983. According to the board’s survey, 47 percent of people described business conditions as "bad," while just 7.7 percent said they were "good."

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