When Warren Buffett "talks, people listen." This quote is a throw-back to E.F. Hutton, the legendary broker and investment counselor of the last century. It was used in a commercial by the E. F. Hutton Group, with great effect, during the 1970s and 1980s in this manner: "When E. F. Hutton talks, people listen." It probably has greater significance today with the substitution of the name Warren Buffett.
Warren E. Buffett, 78, is CEO of Berkshire Hathaway. He is ranked by Forbes to be the richest person in the world today, with a net worth of $62 billion, give or take a billion. His company, Berkshire Hathaway Inc., listed on the New York Stock Exchange as BRK-A, was selling for $101,250 per share on Aug. 19, up $310 on the day. The stock pays no dividends.
Buffett is known for his personal thrift. He does, however, permit himself the luxury of flying around the world in a private $20 million Gulfstream jet owned by Berkshire Hathaway.
In 2006, his base salary was about $100,000 a year, well below other top executives in similar size companies. In 2008, he earned $175,000 in total compensation. His base salary remained the same $100,000.
He lives in the same house in central Omaha that he bought in 1958 for $31,500.
It was reported in 2006 that he does not carry a cell phone, does not have a computer at his desk and he drives his own automobile, a Cadillac DTS. Buffett's style is such that he is still driving that same automobile today.
He is personally opposed to the transfer of great fortunes from one generation to the other. He once commented: "I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing."
In 2006, he announced a plan to give away his fortune to charity, with 85 percent of it going to the Bill and Melinda Gates Foundation.
Warren Buffett was born in Omaha, Neb., and began his career as a newspaper delivery boy at his grandfather's grocery store in 1943. That year he filed his first income tax return, deducting his bicycle and watch as work expense of $35.
In his freshman year in high school in 1945, he teamed with a classmate, investing $25 in a used pinball machine that was placed in a barber shop. The income was invested in three additional pinball machines.
Buffett went on to graduate from the University of Nebraska and later received a master's degree in economics from Columbia University in 1951.
Today, Buffett is talking and he has a message of great importance to all Americans.
He is talking about the U.S. national debt.
Acknowledging that the "gusher of money" to avoid a "meltdown" in the economy that was provided last fall in the trillion-dollar stimulus package was a necessity, he warned in a column he wrote for the Aug. 19 issue of the New York Times that "enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with the side effects. For now, most of these side effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself."
The projected U.S. budget deficit for the fiscal year that ends Sept. 30 is estimated to be $1.58 trillion, down from $1.84 trillion estimated in May, but still the largest in history.
The revised $1.58 trillion deficit for 2009 raises the gross debt of the nation to an estimated $12.867 trillion, 90.4 percent of GDP.
With the net debt rising at 1 percent per month, over a third of a trillion dollars per month is being added to the net debt.
Buffett points out that “our immediate problem is to get our country back on its feet and flourishing — ‘whatever it takes’ still makes sense! Once recovery is gained, however, Congress must end the rise in the debt-to-GDP ratio and keep our growth in obligations in line with our growth in resources.”
D. Christian Moore, law and politics “examiner” writing on Aug. 20 for examiner.com in Wilmington, Del., noted Buffett is “correct in his assessment of our need to eventually confront the growing national debt. Regardless of where one comes down on the issues, or the larger philosophical argument of government vs. the free market, the U.S. cannot continue to expect to finance a large expansive government at current revenue levels. At some point we will need to have a discussion regarding what we really expect our government to do and how much we are willing to pay to finance it.”
E. Ralph Hostetter, a prominent businessman and agricultural publisher, also is a national and local award-winning columnist. He welcomes comments by e-mail sent to eralphhostetter@yahoo.com.
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