Thursday, April 21, 2016

Buffett’s Warning on Economic Gloom

Buffett’s Warning on Economic Gloom: "Buffett’s Warning on Economic Gloom

Daniel Gross, Strategy & Business




On February 27, Warren Buffett, the folksy billionaire who presides over Berkshire Hathaway, released his much-anticipated annual letter to the company’s shareholders. Most of the media coverage focused on the Oracle of Omaha’s contention that, despite the aura of decline promulgated by many, the U.S. is actually in very good shape. “For 240 years, it’s been a terrible mistake to bet against America, and now is no time to start. America’s golden goose of commerce and innovation will continue to lay more and larger eggs,” he wrote. This is a stance with which I agree. Welcome to the bandwagon, Mr. Buffett!

But I found another, less-covered point he made to be more compelling.  In a recent CNN poll, 56 percent of Americans said they feared their children would be worse off than they are. This has created a sour mood!


Put another way, the age of disruption, globalization, and rapidly shifting markets has actually been quite good news for companies at large — and for their owners. But it has been less good news for many of the people who work at them. 


The answer, Buffett says, is for society at large to do a better job building shock absorbers that protect all people in times of need. This includes protecting healthcare, promoting lifelong education and training, and to encourage savings would also be useful.


Of course, such programs have a cost. And Buffett would be the first to acknowledge that they do. But he’s highlighted an important point: If you’re not taking into account the impact of your company’s actions on society at large, you may be contributing to the sour mood."


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