Obama, at battery plant, jabs Republicans on economic 'snake oil'

JACKSONVILLE, Florida — President Barack Obama used a trip to a lithium-ion battery factory on Friday to defend his economic record against arguments made by Republicans in the race to succeed him after the November 8 presidential election.

Obama said his policies, including the $760 billion economic stimulus he brought in when he first took office, helped the American economy bounce back from the 2007-2009 recession that he inherited much faster than European nations that adopted austerity measures.

"If we don't recognise the progress we've made and how that came about, then we may chase some snake oil and end up having policies that get us back in the swamp," Obama told workers at the plant built by French company Saft with $95.5 million from the stimulus.

"We knew that it's going to take more than one year or even one president to get to where we need to go, but we can see real tangible evidence of what a new economy looks like. It looks like this facility right here," he said.

The Saft plant, which opened in 2011, created almost 300 jobs in the region but has struggled with sluggish demand for lithium-ion batteries. The French company had to take a writedown and its chief executive has said it would probably take two to three years to become profitable.

Obama acknowledged the pace of changes in the economy has been “scary sometimes”.

Those economic fears have helped propel the campaign of Donald Trump, the billionaire businessman who is the front-runner in the race to be the Republican candidate for the November 8 presidential election.

Florida, home to Republican presidential candidate Senator Marco Rubio, is critical to both the March 15 primary vote and the general election that follows.

Obama brought Democratic US Representative Patrick Murphy from Florida with him on the trip. Murphy is running for Rubio's Senate seat.

Stimulus investments to advanced battery makers were panned by Republican lawmakers after A123 Systems, a lithium-ion battery maker, went bankrupt in 2012 and was bought by Chinese auto parts maker Wanxiang.

Battery maker LG Chem came under fire after a 2013 Energy Department Inspector General report found that the company used some of its funding for a Michigan battery plant to pay employees to watch movies, volunteer at non-profits and play games because there was little work for them to do.

But Obama said the stimulus helped America compete in the global race to boost solar and wind power. "Taxpayers are getting their money back, and some," he added.

Separately, Warren Buffett bemoaned the "negative drumbeat" on the US economy from presidential candidates in his annual Berkshire Hathaway Inc. shareholder letter on Saturday, saying they are misleading Americans into believing their children will be worse off then they are.

"It's an election year, and candidates can't stop speaking about our country's problems [which, of course, only they can solve]," Buffett wrote, italicising "they" for emphasis.

As a result of their dour outlook on the US economy, many Americans now believe that their children will not live as prosperously as they themselves do, the 85-year-old Buffett said.

"That view is dead wrong: the babies being born in America today are the luckiest crop in history," Buffett added.

Buffett did not single out any presidential candidates by name. The billionaire in December officially threw his backing behind Hillary Clinton, a Democrat.

"During presidential elections where no incumbent is running, both sides who are running for president always say they are the ones to solve the nation's problems and point out what those problems are," said Bill Smead, who invests $2.1 billion at Smead Capital Management in Seattle.

Trump, who won New Jersey Governor Chris Christie's endorsement on Friday, has offered  a bleak assessment of the US economy, repeatedly saying it is in a "bubble" that he hopes will pop before he takes office. 

"I don't want to inherit all this stuff," he has said.

In his letter, Buffett said "some commentators bemoan our current 2 per cent per year growth" in real gross domestic product (GDP), "and, yes, we would all like to see a higher rate".

But he added America's population is growing about 0.8 per cent per year, and that 2 per cent GDP growth equates to a 1.2 per cent per capita growth rate.

"That may not sound impressive," Buffett elaborated. "But in a single generation of, say, 25 years, that rate of growth leads to a gain of 34.4 per cent in real GDP per capita."

Buffett, whose home in Omaha, Nebraska sits on less than an acre, said society has advanced significantly since he grew up during and after the Great Depression.

"All families in my upper middle-class neighbourhood regularly enjoy a living standard better than that achieved by John D. Rockefeller Sr. at the time of my birth," he indicated.

"His unparalleled fortune couldn't buy what we now take for granted, whether the field is, to name just a few, transportation, entertainment, communication or medical services. Rockefeller certainly had power and fame; he could not, however, live as well as my neighbours now do," he concluded.