The U.S. is facing a “painful period” in the next five years as homeowners and governments unwind debt built up during the housing boom, Berkshire Hathaway Inc.’s David Sokol said today.
“All of that just feeds into a slow-growth environment,” Sokol, who heads Berkshire’s energy and luxury-flight divisions, said today in an interview at Bloomberg headquarters in New York. “If we could average 2 percent for the next five years, we’d be pretty happy.”
“It’s going to be a painful period,” said Sokol, whose energy division owns a real-estate brokerage. “If the U.S. grew a consistent 2 percent from this year forward, Europe half a percent and Asia 6.5 to 7 percent, my guess is that we’ll all feel pretty good.”
The credit crisis in 2008 was “such a dramatic jolt to businesses that it did something very positive,” Sokol said. “It made companies that were pretty efficient get a lot more efficient. It made every business I’m involved with really take a hard look at the business model.”
“People have been shocked into the notion that maybe some monthly savings is a good thing,” Sokol said. “We’ll end up with a lot of people that are struggling until their home values come back a little bit.”
Sokol considers his main job at Berkshire to be “whatever Warren wants me to do,” he said in an interview today on Bloomberg Television.
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