On October 28th, the “Oracle of Omaha”, Berkshire Hathaway CEO Warren Buffett, descended on the HBS campus for the first time in almost two years. Mr. Buffett, an economic advisor to John Kerry’s Presidential campaign, spoke at the invitation of the Harvard Business School Democrats Club. Students were clearly eager to benefit from the Oracle’s magic touch, and by the time Mr. Buffett began to speak at 3:00, students had filled the 2000 seats in Burden Auditorium and 300 seats in Spangler auditorium (where overflow broadcasting had been arranged), making seats “more difficult to get than Red Sox tickets”.
Instead of delivering a prepared speech, Mr. Buffet agreed to answer questions from the audience, and throughout the afternoon a stream of students ascended the stage, shook Mr. Buffett’s hand and asked a wide variety of questions on tax cuts, deficits, health care, inflation, and the role of politics in the lives of business leaders. “You can ask anything. Don’t worry about my feelings,” pleaded Mr. Buffett.
“What kind of world would you want to set up?”
It’s rare that the world’s foremost capitalist grants a “carte blanche” question and answer session, and Mr. Buffett’s answers were thoughtful, candid and non-partisan. Mr. Buffett’s economic views stem from a deep concern for the welfare of America and a commitment to social justice.
Early in the afternoon, he was asked why someone in the top tax bracket should vote for the Democrats; instead of stumping for Messrs Kerry and Edwards, he posed an interesting hypothetical scenario. Imagine that 24 hours before your birth a genie appeared before you and gave you the opportunity to design the rules guiding the world into which you would emerge. The only catch would be that you would have to design these rules without any clue as to your future identity. You could emerge male or female, rich or poor, American or foreign, and as such, your birth would be like drawing a ticket in a giant lottery. “What kind of world would you want to set up?” Mr. Buffet challenged the crowd. As someone born in the United States with “good genes”, Mr. Buffett clearly feels that he “won the ovarian lottery,” but he firmly believes that sound policy takes care of the people who drew worse tickets. “Not everybody wins. The tax system is the most important machinery to take care of these people. I want to elect politicians who don’t look at their ticket.” Regarding the redistribution of wealth, Mr. Buffet believes that wealthy “people in the U.S. ought to be very happy to pay a considerably higher percentage in taxes to take care of those without lucky tickets… [A flat tax represents] a warped view of society.”
Mr. Buffett argued vociferously against the trend in global outsourcing. While he believes that outsourcing should play a small role in our trade policy, he said that the numbers have gotten to a point where it is starting to make a difference, particularly for those less-skilled laborers most vulnerable to falling through the social safety net. Mr. Buffet argued that outsourcing constitutes a wholesale transfer of wealth to other countries, and that as America increases its reliance on outsourcing it is ” selling off a piece of the farm”. He also demonstrated concern about the national deficit, arguing that it had grown to a level so that it was tantamount to “a 5% tax on productivity in this country”. Furthermore, while the national deficit is growing, he is concerned that the Bush Administration is not using the national deficit in the way it should be used: to generate economic stimulus. While Mr. Buffet recognizes the necessity of rationalizing health care, he spoke in favor of widespread medical coverage, arguing that “some base level should be assured to everyone in society.” Students were very receptive to Mr. Buffett’s message of social concern, noting that it’s rare to hear such a preeminent capitalist speak out regarding equality and justice.
Don’t Save Sex for Old Age
Later in the afternoon, Mr. Buffett’s commentary moved from weighty social and political issues towards sage advice for aspiring businesspeople. Noting that many students facing career decisions reject the jobs they really want in favor of higher paying alternatives, he urged students, “Don’t save sex until old age. It doesn’t matter how much money you make.” Given that the audience members are already on the path to success, Mr. Buffett compared taking a job for the salary to “marrying for money – it’s a bad idea under any circumstance, and it’s crazy if you’re already rich.” Anecdotally, he also counseled students on their search for the right life partner: “Look for someone with low expectations!”
Perhaps this would be more credible if it came from someone other than Mr. Buffett, whose personal fortune was recently estimated by Forbes at $42.9 billion. However, many students were most surprised to discover that despite his vast fortune, Mr. Buffett’s life is astoundingly similar to their own. Mr. Buffet sleeps on an ordinary mattress that is “not so different from the one you probably sleep on, so for seven hours of the day, our standard of living is roughly identical”. Many students eat at McDonalds; Mr. Buffet eats at Dairy Queen (“We own it, so I get a discount”). The major difference Mr. Buffett noticed was that “we fly different planes”.