No Joy in Mudville

I think Buffett is aging just fine. He speaks up about the concentration of wealth because most other prominent business leaders are spineless. History shows that this type of disparity doesn't end well. I would love to know the reason of the falling out between Buffett and Ms. Schroeder. THAT would be an interesting column.

REPLY: No question, huge wealth disparities don't end well. Some historians have made an excellent case that dominant cultures tend to fail as a consequence of wealth disparities. When economic growth of a mature economy begins to naturally slow, the elites turn to income redistribution instead as a way to increase their wealth and do not recognize the political and social consequences until it is too late and people crying liberte, egalite, fraternite, control the streets.

Warren's views on taxes are extremely nuanced and sophisticated. In the current debate they have instead been boiled down to sound bites that lend themselves to attacks on the grounds that they are overly simplistic and self-serving. If he were to write a 2,500 word article (or longer) that really explained his views in a fully forthright and honest manner, in my opinion it would be more influential (over the long run) and more beneficial to his reputation and legacy than the tack that is currently being taken about Debbie B.'s taxes. It would reestablish him as the Oracle. He won't do it -- years ago he stopped writing at length in nuanced terms about complex topics. He wants maximum impact with the largest audience. Hence the sound bites which are meant to get Obama reelected.

From his standpoint, this approach is pragmatic. it's a tactical choice, but I simply regard it as a waste of his talent as the great economic educator of our times.

Last, I appreciate your acknowledgment that the reasons for what happened to my relationship remain unexplained. There's no way to explain it in an 850 word column, and as the old saying goes, be careful what you wish for.

Warren Buffett has been involved in helping my grandfather hide 220,000 class A shares since the 1970's through illegal tactics to keep the majority vote with Berkshire and vote any way Buffet wants no matter what the shareholders vote. Buffett showed my grandfather to hide shares in his Donald E Nielsen Revocable Trust and not report them on his estate. This is common knowledge for people who do not want to pay estate taxes that have numerous shares of class A. Since the shares are under "street name" and do not pay a dividend, they are not registered with the IRS and the SEC. They use the death certificate to change the shares into another trust without reporting them (illegal). This is the main reason that Buffett does not want to pay a dividend because it will expose all the shareholders to the IRS and the SEC. There are other illegal moves that are too long to go into detail. I thank my grandfather's accountant, Rod Zwygart, for coming forward.

Sincerly,
Mike Nielsen

REPLY: I posted this because the author went on the record and gave his full name. I'm not a tax expert. Would appreciate it if someone who understands this subject would reply.

While I greatly admire Warren Buffett, I am not a Buffett apologist - if anything I am your apologist, as I have found myself defending your writing against my online friends who suffer cognitive dissonance whenever they hear anything critical of their hero.

However, I do not think this column is your finest work. While I have no issue with any of the individual facts you present, your essay seems unfocused, and too much like a laundry list of defects than a call to action for Mr. Buffett, the board, or your readers to take a specific action.

IMHO, an article that focused on just a few issues in more detail would have made for a more powerful column, especially one which leveraged your unique experience as an insurance analyst and a biographer. Topics such as what should Berkshire investors do in light of this malaise; what is the likelihood that Berkshire will outperform the S&P over the next 10 years with or without Mr. Buffett in charge; or an objective rather than subjective analysis of the cost of Warren’s political activism would have made for a better read. Instead, I felt like I was reading a Fox news primer on Warren Buffett.

I thought your column explaining how Warren wants other companies to report more detail in their annual reports than Berkshire does in its own reports was in some ways similar to this article but was much more effective.

REPLY: I respect your opinion and thoughtfulness. The topics you propose are interesting. Chances are I won't write about them any time soon because of time issues, but they're in the hopper for consideration.

I will disagree with you on the objectivity. Here is what I left out of the column. The circle of people I spend most of my time in is people who run companies and sit on boards of directors. The transformation of this group's opinion of Buffett in the past three years is nothing short of remarkable. He remains popular with many but is no longer the darling of the whole. A very large group of corporate leaders who are quite influential not only have tuned him out, but express such animosity to him that it feels like the old Maxell ad where the guy is sitting in front of the speaker and the roar is so loud that his hair is blown back.

These numbers aren't precise but they are close enough to decide the issue. I would say three years ago it was roughly, 50% huge Buffett fans, 20% fans with reservations, and 30% people who were mad at him for his polemics about stock options and executive pay.

Today, roughly 20% Buffett fanatical fans, 20% fans with reservations, 20% have tuned out because of Lloyd Blankfein, Moody's, Buy America, etc., and the other 40% is so enraged the veins in their heads start pumping when his name comes up.

This is a significant loss of influence among a group of people he should have as an eager audience for his ideas.

I don't think Buffett is aging well. He has become so outspoken on political and other matters that I no longer trust what he has to say. Believe me, that is very hard for me to type. He seems to have surrounded himself with media "yes" people. His four moderators at the annual meeting are "yes" people. His interviewers on CNBC or PBS are "yes" people. He is never asked hard questions. His "do as I say, not as I do" method of operations is never questioned.

That is why Ms Schroeder you are like a breath of fresh air. You have the nerve to pull on Supermans cape.