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Warren Buffett (pictured to the left), one of the richest men in the world, predicted that unemployment would sink down the the low 7% range by the end of 2012.

He also expressed optimism for the future of America, saying he was seeking more acquisitions. He also said that the stimulus money did the job it was supposed to do. Stimulate the economy.

What does that mean? Election time is right around the corner again. And the chief beneficiaries of this prediction: The Democrats, of course.

As we inch closer to Election Day 2012, all the seeds planted since early 2009 are beginning to sprout in what could be a good harvest. I take that back, a great harvest.

Warren Buffett was interviewed today on CNBC in which he discussed a wide variety of economic subjects including the direction of the unemployment rate.

Warren Buffett predicted on CNBC today that unemployment would reach the "low 7" percent range by the 2012 Presidential election.

Buffett also believes that the stimulus spending should be reduced or halted, but not for the same reason that many Republican and Tea Partiers believe it should be reduced or stopped. And the reasoning they give is that it is too expensive. But as President Obama has said consistently, we couldn't afford not to spend the stimulus money.

And now, as Buffett explains, the mission was accomplished. The latest ADP report shows continued improvement in the employment rate.

The ADP National Employment Report showed 217,000 private sector jobs were added to U.S. payrolls in February.

That topped the Reuters consensus forecast for growth of 175,000 jobs.

The President's stimulus plan is not only is working, it has worked, and is no longer needed, according to Buffett, because it achieved its goal and purpose.

On Squawk Box this morning, Buffett said that "the government really did its job there in the fall of 2008" at the height of the credit panic, but now "I don't think we need as much monetary or fiscal stimulus as is going on."

Asked specifically if the Federal Reserve should end the QE2 program that has it buying billions in assets to keep rates low, Buffett replied, "Yeah.  I have enormous respect for (Fed Chairman) Ben Bernanke. He knows way — you know, he knows more about the Fed than I do by a factor of 100 to one.  But in the end, I don't — I don't think we need more of that now."

On the fiscal side, Buffett points to government spending at 10 percent of GDP.  "We have massive stimulus going on in the United States.  Stimulus like you haven't seen since World War II.  We just don't call it a stimulus bill."

That's why he's been "optimistic on America right along," even back in 2008, "when I knew things were going to go to hell." Buffett has been buying, while many investors and traders were afraid to tread water. The market has shown a substantial increase since March of 2009, when it hit its low. The market has since been rallying.

This is great news for President Barack Obama who assumed the President in a time of deep financial crisis. Without the action he took, history will show, our economy would have sunk deeper into the crisis. The Republicans were critical of Democrats during the 2010 campaign and were successful in the area of getting out that message about Democrats, but it had no basis in fact. The economy was continually improving, with the job number being a laggard indicator.

As the 2012 Election season rolls around, it is also obvious the Republicans cannot pull it together. Thus far, no candidates have announced for President on the Republican side. Newt Gingrich was ready to announce an exploratory committee, but that announcement is now delayed. Senator John Thune is out because he correctly assessed that Obama cannot be defeated. I am not going to say (because I learned my lesson) that he is unbeatable or inevitable in 2012, but he is awfully close to that assessment.

The Republicans that do announce for President, will be beating up on each other in Iowa and New Hampshire throughout the late summer and fall of 2011, while the President gets to act Presidential. Pulling it all together. Each month taking credit for improving economic numbers (and rightly so).

And not just the Presidential candidates. What about all those new members of Congress that promised this and promised that and have yet to achieve anything. The Senate will be tough to hang onto just because of the sheer number of Democratic seats that are up, but I also believe we will be discussing Speaker Nancy Pelosi once again.

The wind is at our backs once again.

JOHN PRESTA IS THE AUTHOR OF "MR. AND MRS. GRASSROOTS: HOW BARACK OBAMA, TWO BOOKSTORE OWNERS AND 300 VOLUNTEERS DID IT." CONTACT HIM AT JOHNPRESTA@ATT.NET.

John is the author of an award-winning book, the 2010 Winner of the USA National Best Book award for African-American studies, published by The Elevator Group Mr. and Mrs. Grassroots: How Barack Obama, Two Bookstore Owners, and 300 Volunteers did it. Also available an eBook on Amazon. John is also a member of the Society of Midland Authors and is a book reviewer of political books for the New York Journal of Books

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Comment Preferences

  •  Tip Jar (21+ / 0-)

    "Never doubt that a small group of committed citizens can change the world; indeed, it's the only thing that ever has!" - Margaret Mead

    by Reading on Walden Bookstore on Wed Mar 02, 2011 at 09:00:10 AM PST

  •  The only way unemployment will be that low (7+ / 0-)

    is if Mr. Buffett hires about 9 million workers himself.

    There's always the chance something good will come out of expressing oneself honestly

    by ontheleftcoast on Wed Mar 02, 2011 at 09:05:15 AM PST

    •  Definitely don't agree (1+ / 0-)
      Recommended by:
      Dr Swig Mcjigger

      The job numbers month after month are on a consistent path upward. Roughly 200,000-300,000 per month.

      "Never doubt that a small group of committed citizens can change the world; indeed, it's the only thing that ever has!" - Margaret Mead

      by Reading on Walden Bookstore on Wed Mar 02, 2011 at 09:08:37 AM PST

      [ Parent ]

      •  And housing prices are sinking (4+ / 0-)

        like the Titanic and gas and food prices are skyrocketing.  Does that sound like a scenario for growth?  

        ~War is Peace~Freedom is Slavery~Ignorance is Strength~ George Orwell "1984"

        by Kristina40 on Wed Mar 02, 2011 at 09:13:42 AM PST

        [ Parent ]

        •  and jobless claims are falling (0+ / 0-)

          and retail sales rising, and manufacturing is growing and rail traffic is increasing, hotel occupancy is on the rise, net jobs are being created each month, interest rates are low, auto sales are up, the architectural billings index is in positive territory. THAT is a recipe for growth. Falling house prices don't worry me much. They were prevented from hitting their natural bottom due to the tax credit, which articificially propped them for a while.  They'll hit bottom this year.  

      •  That's true for now (3+ / 0-)
        Recommended by:
        tmo, wu ming, polecat

        Wait until gas hits $4.50/gal or more. The economy will start reeling again. Maybe, just maybe, Buffett has some inside information that companies are going to finally start using the more than $1,000,000,000,000 (yeah, TRILLION) dollars they're sitting on to start hiring. But I don't see that happening.

        There's always the chance something good will come out of expressing oneself honestly

        by ontheleftcoast on Wed Mar 02, 2011 at 09:13:50 AM PST

        [ Parent ]

        •  What is with all this pessimism? (7+ / 0-)

          This economy is heading in the right direction. Keep watching, you will see. Ye of little faith. This man has the track record and the credentials.

          "Never doubt that a small group of committed citizens can change the world; indeed, it's the only thing that ever has!" - Margaret Mead

          by Reading on Walden Bookstore on Wed Mar 02, 2011 at 09:16:54 AM PST

          [ Parent ]

          •  I have a great deal of confidence... (3+ / 0-)
            Recommended by:
            Lying eyes, shrike, Dr Swig Mcjigger

            in Warren Buffet. The numbers may not be as low as he predicts but they will be in the general area. Keep in mind...he was buying assests when all others were losing their collective heads. Ever try to buy into Berkshire-Hathaway? Just saying!!

          •  heh.............it's Dkos, (4+ / 0-)

            pessimism r us, nature of the beast and all that.  But thanks for the report.  When Warren speaks, I listen and place my bets accordingly.

            "Most men live lives of quiet desperation" . Kossacks are sometimes desperate, but never quiet. And that's a good thing.

            by Lying eyes on Wed Mar 02, 2011 at 09:45:55 AM PST

            [ Parent ]

            •  I want to be optimistic on this (1+ / 0-)
              Recommended by:
              Roger Fox

              Though the protests in Wisconsin and now Ohio are giving me more hope for the future of workers in America than Warren Buffett. From what I can tell he's completely discounting the U6 number. Once jobs really start appearing workers who had given up or were doing "McJobs" will try to get back into the mainstream workforce. That will keep the number high for sometime while they're being re-absorbed. Yes, what he is saying is true, jobs are being created. But no where near enough to hit 7% buy election 2012.

              There's always the chance something good will come out of expressing oneself honestly

              by ontheleftcoast on Wed Mar 02, 2011 at 10:11:45 AM PST

              [ Parent ]

          •  Realism (4+ / 0-)
            Recommended by:
            tmo, polecat, Roger Fox, southof

            Our economy is a house built on sand. And the wind is blowing harder:

            Planned layoffs spike in February

            "At the very least, rising energy costs could force employers to postpone hiring plans," Challenger said. "At worst, increased costs could kill the fragile recovery and spur another round of layoffs."

            An ambulance can only go so fast - Neil Young

            by mightymouse on Wed Mar 02, 2011 at 10:06:49 AM PST

            [ Parent ]

          •  Sorry, it is not. (5+ / 0-)

            You have state governments preparing for mass layoffs, huge slashes in state and local spending, a pull back of stimulus from the Federal Government, double dip in housing and more and more discouraged workers with each UE report out.  I suppose if enough people just give up looking we can get it down to 7%.  What exactly do you think is going to spur growth?  What industry?  Wages aren't rising but the price of everything that we MUST have is.  This is not a recipe for growth.  This is a recipe for a Depression.

            ~War is Peace~Freedom is Slavery~Ignorance is Strength~ George Orwell "1984"

            by Kristina40 on Wed Mar 02, 2011 at 10:07:32 AM PST

            [ Parent ]

          •  1960-2000 averaged 4.48% GDP (0+ / 0-)

            There is nothing on the horizon to suggest anything more than 3.5% looking to 2030 and beyond. 3.5% growth is going to be the absolute top of what can expected.

            Let me repeat that:

            There is nothing on the horizon to suggest

            Income disparity is equal to 1928, since the Clinton era median Ind Income has fallen from 38k to 26k.

            Paint me skeptical with a big assed wide brush.

            FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

            by Roger Fox on Wed Mar 02, 2011 at 03:53:52 PM PST

            [ Parent ]

      •  Not 200,000-300,00/ mo. - more like 130,000 (2+ / 0-)
        Recommended by:
        tmo, Roger Fox

        BLS nonfarm employment gains adjusted                                                        

        Table A.  Revisions in total nonfarm employment, January-December 2010,  seasonal

          (In thousands)                  
               2010                      
          January........129,281
          February......129,246
          March...........129,438            
          April..............129,715
          May...............130,173
          June..............129,981
          July................129,932
          August...........129,873            
          September.....129,844
          October..........130,015
          November.......130,108
          December (p)..130,229
          January (p).......36,000
        (p) - prelimininary

      •  are they the kind of jobs that move median up? (0+ / 0-)

        30 bucks an hour vanishing and 15 an hr jobs being created? That has been the trend the last few months.....

        That means new jobs equals less income taxes and less in FICA.

        Median Ind income is like something like 26k.

        India spends about 4% of GDP on infrastructure, they want to spend 9% like China, the US spends 2.4%, with a 15 trillion economy 10% of GDP is 1.5 trillion.

        I see a lot of reasons to predict sub 3.5% growth going forward. If we average 250k jobs a month looking to 2012, things will be better, 7%, I dunno, we'll see.

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed Mar 02, 2011 at 03:30:39 PM PST

        [ Parent ]

  •  I'm not confident (1+ / 0-)
    Recommended by:
    Roger Fox

    That even at 7% that will help the dems.

    Also with the fiscal conservatisim now on the plate and the layoff of gov't employees and then as the money they once spent drying up more private employees I just don't see it.

    The way I see it the US does not make anything anymore and most of the service and retail jobs are not coming back because people are either unemployed or don't make enough to buy enough to get those jobs back.

    The elite class now is ok but since we did not truly reform the financial system they will make more money by playing the stocks and speculating than they would if they used the money to  create jobs and products.

    But that's just my take.

  •  My worry (2+ / 0-)
    Recommended by:
    AnnieR, Uncle Chigurh

    Ok, let's be honest.  Shrub had so screwed up the country, the economy, hell a good part of the world, that Americans were willing to elect a black man as president.  I mean, things were so bad, the black guy couldn't do worse, right?

    So if the country gets back on track a bit, I think Americans will feel more comfortable voting in another incompetent Repub who will once again drive the country off a cliff.

    Hope it's not true.  Will work like hell to make sure it doesn't happen.  But that's what my spidey-sense is telling me.

    •  Please be sure we don't elect (2+ / 0-)
      Recommended by:
      Lying eyes, shrike

      another Republican. It takes lots of work, but it can be done. You can find many things wrong, but there are many shining stars. I am sorry you can't or won't see it. Don't concede to those tea partiers. You are playing into their hands.

      "Never doubt that a small group of committed citizens can change the world; indeed, it's the only thing that ever has!" - Margaret Mead

      by Reading on Walden Bookstore on Wed Mar 02, 2011 at 09:30:16 AM PST

      [ Parent ]

  •  i don't see how that happens (1+ / 0-)
    Recommended by:
    mightymouse

    with oil production being taken offline in libya, and global demand for oil pushing things close to the tipping point. we've already seen what $100+ a barrel does to our economy and real estate, and the only way it went down in 2008-9 was because of brutal demand destruction (ie. depression).

    if anything, we need to expand the stimulus and focus it like a laser beam on building oil-independent infrastructure ASAP. buffet's wrong on this.

    •  Oil is just one element (2+ / 0-)
      Recommended by:
      shrike, Dr Swig Mcjigger

      of our economy. Supply and demand will fix the pricing. And I believe that the Saudis will come though out of a great fear that America will abandon them if they don't.

      "Never doubt that a small group of committed citizens can change the world; indeed, it's the only thing that ever has!" - Margaret Mead

      by Reading on Walden Bookstore on Wed Mar 02, 2011 at 09:36:27 AM PST

      [ Parent ]

      •  supply and demand will fix the pricing, yes ... (0+ / 0-)

        they will fix it in an uncomfortable place.

        An ambulance can only go so fast - Neil Young

        by mightymouse on Wed Mar 02, 2011 at 10:07:58 AM PST

        [ Parent ]

      •  check the saudi stock market...not very hopeful. (0+ / 0-)
      •  the saudis don't have the ability to do (0+ / 0-)

        what everyone's expecting them to do. their production has been stalled for close to a decade, even during the gigantic price spike of 2007-8, and much of the stuff that they can ramp up temporarily is heavy, not light crude, which presents significant refining questions downstream (not all refineries can switch from one to the other, so there's a bottleneck ahead).

        as for supply and demand, yes, it will indeed fix the pricing. it's just that it will fix it by demand destruction, ie. pricing out enough of the global economy so that there's slack in demand. that is what happened in 2008, and that is what is in our near future.

        oil is the single most important variable in our economy, its fluctuations are directly tied to the rise and fall of our economy. the government can, if it wills, print money and invest it in economic activity. it cannot produce more oil, save for minor tweaks to the market w/ the strategic oil reserve.

        •  Yes the do (0+ / 0-)

          at least with respect to volume. There are some claims that the quality of their oil is not as high as that of Libya, though.

          •  we shall see (0+ / 0-)

            they were certainly not capable of increasing production to kill the price spike from 2007-2008, given that their production numbers stayed more or less level during that period. there's not as much slack in the system as everyone wants to believe. add in the saudis' recent move to pay off their populace to avoid protests, and the inevitable increase in domestic consumption of oil that that will translate into, and you can see the bind they're in.

            they're lying about their reserves, and they've got flat production rates with an exponential rise in number of oil rigs, and a growing saltwater ratio in what they do pump out of the ground in ghawar, their big sweet oil field.

            what they've got left to spare is heavy, sour crude, that creates refining bottlenecks the moment they pump it.

          •  Libyan oil varies from API 26 to 43 (0+ / 0-)

            Majority of their exports are in the 30-36 range. Which is about the same as KSA or Iraq. Exports max out at 1.5 MBD.

            The KSA is limited by the number of GOSP they have built, I haven't heard of a new GOSP coming online since about 2007. Though KSA has boosted exports by 700k MBPD to about 9 MBPD in response to the libya problem.. They claim they can produce 11.5m a day. Boosting 700k MBPD is easy to do, the first thing that came to mind was for KSA to open up wells they have rested, to recharge. Pumping from rested wells may allow oil production without sucking up water. Though those wells likely cant produce for long without water injection, so again KSA would face the GOSP wall.

            The point till remains with Libyan production of 1.5 mbd being removed from the market KSA has upped their export by just under half, 700k mbd.

            FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

            by Roger Fox on Wed Mar 02, 2011 at 04:44:25 PM PST

            [ Parent ]

      •  KSA oil production is limited by GOSP (0+ / 0-)

        Large plants that separate oil gas and water. They have not brought any new plants online in 3 yrs. GOSP capacity will limit KSA to about 8.8 or 9 mbd.

        What you will see is KSA diverting oil from domestic use to export. They have been expanding solar and nat gas for a few years now to give them that kind of flexibility.

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Wed Mar 02, 2011 at 04:03:33 PM PST

        [ Parent ]

  •  tipd and recd for the info, but I think (3+ / 0-)

    the positive positivism may be a little premature.

    We're still in a very shaky situation in terms of middle class stability (and expectation of stability), and that could slow the economy down considerably.

    "The revolution's just an ethical haircut away..." Billy Bragg

    by grannyhelen on Wed Mar 02, 2011 at 09:42:51 AM PST

  •  With the way unemployment is calculated... (3+ / 0-)

    it's feasible. It may dip that low for all the wrong reasons. People may be giving up looking for work, people taking lower paying jobs, and people simply not collecting unemployment.

  •  the last time (3+ / 0-)
    Recommended by:
    tmo, mightymouse, Blizzard

    the unemployment rate was in the low 7's (7.3%) was in December of 2008.

    Since then the economy has lost 4.1 million jobs. To create 4.1 million jobs in 23 months, you need to create 180K per month.

    This of course understates things a bit since our population has increased since 2008. But not by too much.

    Problem is, other than the census hiring period (March-May 2010) the economy has not even once created that many jobs in a month under Obama.

  •  WPA or another war? (3+ / 0-)
    Recommended by:
    mightymouse, Roger Fox, Blizzard
  •  It depends on your perspective. (0+ / 0-)

    I don't think Buffett looks at things quite the same way as the guy working at Walmart, i.e. the stock market, corporate profits, etc.

    •  I work at Sears (3+ / 0-)

      in addition to freelance writing of books and political articles. He seems to me to be the most down-to-earth billionaire. Not a big material guy, if you can believe it. Gave away most of his fortune. Doesn't believe in the repeal of the estate tax. I don;t believe he says these things to increase the value of his investments. Walks to a different drummer as far as billionaires go.

      "Never doubt that a small group of committed citizens can change the world; indeed, it's the only thing that ever has!" - Margaret Mead

      by Reading on Walden Bookstore on Wed Mar 02, 2011 at 10:08:09 AM PST

      [ Parent ]

      •  Yes, he's a different sort. (2+ / 0-)
        Recommended by:
        Roger Fox, Dr Swig Mcjigger

        My point was that I don't think he's worried about losing his job, home, healthcare, social security, children's education and things like that.  People like him look at things like GDP, inflation and interest rates that don't necessarily have much meaning to your average Joe.  

        And other than average people who have 401k's, Wall Street's success is totally meaningless for the guy working at Walmart since there seems to no longer be any correlation between the market and the economy.

    •  It's a good thing he doesn't (0+ / 0-)

      The guy working at Walmart probably as  well versed in business and economics

  •  Buffett's a little old to be doing LSD n/t (0+ / 0-)
  •  15 million jobs created over 5 yrs (1+ / 0-)
    Recommended by:
    mightymouse

    is about 250k a month.

    That might get us to 3.5% GDP growth. I think where Buffet is wrong, looking at past recessions since the 80's, job growth during recoveries are flat. In essence because the incentives to create jobs in the Post WW2 era to the 1970's, does not exist today in the form it did back then.

    Where Buffet is right is that $30 an hour jobs vanish and new jobs appear paying $15 an hour replace them. But of course those sorts of jobs contribute less to GDP and to FICA contributions.

    With 21 months to go I think 7% is a stretch. We'll see.

    FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

    by Roger Fox on Wed Mar 02, 2011 at 03:11:38 PM PST

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