Ross continues to present what some reputable people say about the US economy that dispels societal myths. Towards the end of the post, Ross explains the impact of societal truths on infrastructure investment.
What Warren Buffett says about America
But I’m going to give the last word with Warren Buffett on this particular subject from Berkshire Hathaway. And of course, every year, if you follow him at all, you’ll know he publishes an annual report.
And in his 2015 annual report, he talked about the amount of money that Berkshire Hathaway was investing into the US economy. It was a pretty serious amount of money. So they are betting on the US economy to go to well.
They invested in energy, rail, housing consumer goods, insurance, food, beverage, and finance. So they’re getting a really good feel from all of those businesses that they’re invested in just how the US economy is actually performing. They’ve spent $5.8B capital on the rail in 2015 which isn’t insignificant.
And Warren Buffett makes a number of comments in his annual report about the US economy and how well it is doing in reality and how well it’s likely to do in the coming years. Let’s pick this one quote from that report.
“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. America’s social security promises will be honored and perhaps made more generous. And yes, America’s kids will live far better than their parents did.” – Warren Buffet
So, a different opinion from say – political opinion from Warren. From a man that has feedback coming from right across the American economy, and has done very well on betting for the American economy too over the years it might be said.
Why societal truths matter for infrastructure?
And so why do these all matter for infrastructure?
And it’s simply this. And we saw in New Zealand back in our ‘last one out turn of the lights’ recession as well.
If society believes that it’s all going to get worse then it won’t invest in infrastructure.
Why would you invest in stuff that’s very expensive that has a 50-year life or a hundred-year life if you think that’s all going to fall to pieces a lot sooner than that.
Conversely, if society believes the best is yet to come, it will invest in infrastructure because the best is still coming, this is for your kids and your grandkids and you’ll profit from it because the best is coming.
And so, as infrastructure professionals, we have to deal with the impact of these societal myths and directions.
Remember from the Gap Minder information that there might, in fact, be a 20-year fact lag.
And that has a real impact on what we’re doing simply because if you’re going up for investment and the popular sentiments as well are it’s all going to get worse, you’re really going to struggle to get the political commitment to that investment.
And if that sentiment lags into the society for 15 or 20 years, that means that everything is going to get worse because you won’t have invested enough in infrastructure.
PHOTO CREDIT: Patrick Gruban via Flickr Creative Commons License.