Buffett: "In a country as prosperous as we are, nobody should get a really short straw"

Warren Buffett is deservedly lauded for his astonishing investment record, but his true brilliance is the humility, perspective and clarity with which he views the whole world first and himself and his firm as bit actors in our shared world, rather than himself and his vast empire as the center of the universe and valuing the rest of the world just for how it affects him and Berkshire Hathaway.

For example, in his recent Charlie Rose appearance, Buffett complained — for about the five-millionth time — that he’s not taxed enough:

If we’re looking for more money, we ought to look to guys like me. I mean, I am still paying a lower rate on dividends and capital gains than my cleaning lady [on her labor income]. It’s, you know, in terms of her payroll tax, just to start with. And so, I just think that we’ve gotten so far out of whack in terms of who’s been prosperous in recent years, and most of the economy — most people have been left behind, you know. So we learn that a rising tide lifts all yachts.

When Charlie Rose raised the conservative canard that rich people won’t work as hard if they’re taxed more, Buffett knocked that out of the park:

I worked with rich people, you know, even in the ‘50s and the '60s, and I worked with them when the top rate was 70 percent. I worked with them when capital gains rates were 39.6 percent, and not one of them said, you know, it’s 1:00, and instead of working this afternoon I think I’ll go to the movies because my marginal rate is so high. I mean, if anything, they worked harder, Charlie… Not one [investor] ever came to me and said, “Warren, I decided to hell with it. 39.6 percent, I’m not going to invest my money.” What would they do with it, stick it under the mattress?

But the best was when Buffett explained why “I’m prosperous because of the society around me”:

WARREN BUFFETT: A prosperous country should not just be prosperous for the people like me who are wired in a particular way at birth. No credit to me, but I happen to know something about capital allocation… I could have been wired [as] a great ukulele player. But there’s more money…

CHARLIE ROSE: Sometimes you can be both.

WARREN BUFFETT: Yeah, well, not often. Not in this case anyway. But there’s more money in what I do… And you don’t want to mess up the market system that works to bring out of people what their best talents are, but the market system is not perfect in any kind of distribution of wealth. And taxation is a way where you get to the excesses of what the market system produces and where you take care of the people that get the short straws. In a country as prosperous as we are, nobody should get a really short straw.

CHARLIE ROSE: You know, some people are going to hear you say that and they’ll say, “Warren is talking about sharing the wealth. There he goes ..”

WARREN BUFFETT: Well, I’m talking about sharing the prosperity… I’m prosperous because of the society around me. Stick me down in some poor country and I’ll walk around and say I allocate capital, you know, and they’ll say, so what? What we need is a guy with a strong back. You know, and I don’t have a strong back… When a couple of middleweights fight it out on Pay Per View this weekend and get $49.95 from me, or whatever it may be, and I can’t remember their names two weeks later, you know, they are benefiting not because of their own talent that much, but because some guy invented television and then invented cable television, and learned how to change a stadium of 15,000 people into a stadium of 300 million. So they benefit from society. We all do. And some like me benefit enormously from society, you know. I can’t do it by myself. Stick me on a desert island, you know, you do not want to be on the same island.

Posted by James on Wednesday, December 02, 2009