It’s not the rich who are powerful.
Weekend before last, I attended the annual shareholders meeting of Berkshire Hathaway. For those of you not familiar, Berkshire Hathaway is the company headed by legendary investor and perennial competitor for title of wealthiest man in the world Warren Buffet.
The Berkshire Hathaway annual meeting has been called “the Woodstock of Capitalism.” Unlike most annual meetings, the Berkshire meeting is an event. More than 35,000 people, mostly middle-aged, middle class owners of as little as a single share, come to Omaha to attend. Chairman and CEO Warren Buffet sits on a stage in Omaha’s Qwest Centre with his longtime friend and partner Charles Munger and together they take and answer questions for about six hours. For me a week ago Saturday, that six hours was more useful than six semesters of over-priced courses in the business school at SMU.
Berkshire Hathaway itself, though well-known, is not really a household name. But the companies owned by Berkshire Hathaway are.
If you have watched more than 10 minutes of television in the past year, you have seen the little green gecko lizard with the British accent who is the spokesman for GEICO insurance. GEICO is a Berkshire Hathaway company.
Go to www.berkshirehathaway.com and you’ll find links to the 51 companies that comprise the Berkshire Hathaway galaxy. Among them are Acme Brick, Benjamin Moore Paint, Fruit of the Loom, Helzberg Diamonds, Justin Boots and See’s Candies.
The scale of Berkshire Hathaway is staggering. The company, through its subsidiaries like the ones I just named, had revenues in 2008 of $107.8 billion. It was a down year for the company and net profits came in at a paltry $3,224 per share, down from $8,548 per share in 2007. (By way of contrast, when Exxon Mobil was being hauled before Congress in 2008 to defend its ‘obscene’ profits, their earnings for 2007 were $7.36 a share, up from $6.68 a share the year before.)
Warren Buffet is a profoundly rich man. But so is Bill Gates, the founder of Microsoft. Bill Gates is a member of the board of directors of Berkshire Hathaway and he was there a week ago Saturday, too. These two men together have personal wealth that exceeds the gross domestic product of many nations on earth and run businesses that are literally a part of the lives of very nearly every human being.
With Warren Buffet, Bill Gates, me, my friend Jim Blair and 34,998 of our fellow Berkshire Hathaway shareholders all sitting in the same room (OK, it was an arena) it dawned on me that as powerful as these men and their companies are, they have no power over my life that I don’t willingly give to them. GEICO is fabulously successful insuring automobiles but I insure my cars through State Farm. See’s Candies are fine but my daughter and I have just concluded that we like Russell-Stover candy better. I tried Fruit of the Loom underwear once, hated it and went back to Jockey. I’m sure that Justin makes great cowboy boots but I don’t wear cowboy boots. My wife and I recently had the interior of our home repainted using Behr Paint, not Benjamin Moore.
Warren Buffet and Bill Gates, capitalist titans that they are, can’t touch me.
The same cannot be said for the lady at the DPS who issues driver licenses. Or the individual at the county tax office that issues your auto registration. If you own a business, you cannot get around the Texas Comptroller of Public Accounts as manifested in the army of bureaucrats that work for her. Try to go your entire life without having to deal with the post office or the water utility or the building inspector. Have you ever been to an IRS office? Budget some time because you can’t take your business elsewhere and they know that.
It is useful to consider that low-paid government functionaries can seriously stand in the way of you leading your life while the two richest men in the world can’t touch you.
It is useful to consider, as the media bashes capitalism and as we move toward having the government run the auto and banking industries and nationalize the delivery of health care.
Warren Buffet and Bill Gates have no taxing authority and face stiff competition in all of their businesses.
The government can and does take your money and dictates to an ever increasing degree how you run your business and live your life.
If you needed something in a hurry (like say, a heart bypass), with whom would you rather deal; Warren Buffet, who is trying to make money for his shareholders, or a cosseted government drone, who knows you can’t go anyplace else?