Warren Buffett Destroys Trump's Economic Policy Without Mentioning Him Once

GettyImages-632858658
Warren Buffett had some strong words against trickle-down economics in an op-ed Thursday. Getty Images

Warren Buffett has a message for the Trump White House: trickle-down economics don't work.

As the third-richest man in the world with a net worth of nearly $86 billion, it's safe to say that when 87-year-old Warren Buffett talks about the economy, people listen. On Thursday, the CEO and chairman of Berkshire Hathaway said that while he's hopeful that American children will live better than their parents did, he fears that wealth disparity in America is only increasing.

"Between the first computation in 1982 and today, the wealth of the 400 increased 29-fold–from $93 billion to $2.7 trillion–while many millions of hardworking citizens remained stuck on an economic treadmill," he wrote. "During this period, the tsunami of wealth didn't trickle down. It surged upward."

Trump's $1.5 trillion tax plan relied heavily on the concept of trickle-down economics.

"I don't believe that we've set out to create a tax cut for the wealthy. If someone's getting a tax cut, I'm not upset that they're getting a tax cut. I'm really not upset," Trump's chief economic adviser Gary Cohn said in November. "We create wage inflation, which means the workers get paid more; the workers have more disposable income, the workers spend more. And we see the whole trickle-down through the economy, and that's good for the economy."

GettyImages-632858658
Warren Buffett had some strong words against trickle-down economics in an op-ed Thursday. Getty Images

Buffett celebrated the level of economic growth America has seen since its founding in 1776, but warned that many were left out as the rich kept their wealth insular, and that while they can afford to provide safety nets for their own ilk, few others can. "The market system, however, has also left many people hopelessly behind, particularly as it has become ever more specialized," wrote Buffett. "These devastating side effects can be ameliorated: a rich family takes care of all its children, not just those with talents valued by the marketplace."

The Oracle of Omaha picked apart other economic promises President Donald Trump has made. Domestic growth doesn't need to soar to create a thriving economy, he said. And bringing back old factory jobs won't help anything.

"In 25 years–a single generation–1.2 percent annual growth boosts our current $59,000 of GDP per capita to $79,000. This $20,000 increase guarantees a far better life for our children," said Buffett. Trump has called for growth of at least 3 percent and often says he will achieve 6 percent growth during his presidency.

The Trump administration has made bringing factory and coal jobs back to America the cornerstone issue of their tenure in the White House. But Buffett says that ignoring advances in automation is harmful to the economy.

But if we tried to save all of the jobs America has lost to innovation instead of progressing, argued Buffett, the economy would have never progressed beyond its early agricultural roots.

"In our 241 years [as a nation]...progress...has disrupted and displaced almost all of our country's labor force. If that level of upheaval had been foreseen–which it clearly wasn't–strong worker opposition would surely have formed and possibly doomed innovation," wrote Buffett. "This game of economic miracles is in its early innings. Americans will benefit from far more and better 'stuff' in the future. The challenge will be to have this bounty deliver a better life to the disrupted as well as to the disrupters."

Warren Buffett Destroys Trump's Economic Policy Without Mentioning Him Once | U.S.