Best Defense

Buffett on what made America great — persuasive, but with one big omission

Buffett summarizes my investment approach better than I can.

President Barack Obama meets with Warren Buffett, the Chairman of Berkshire Hathaway, in the Oval Office, July 18, 2011. (Official White House Photo by Pete Souza)

This official White House photograph is being made available only for publication by news organizations and/or for personal use printing by the subject(s) of the photograph. The photograph may not be manipulated in any way and may not be used in commercial or political materials, advertisements, emails, products, promotions that in any way suggests approval or endorsement of the President, the First Family, or the White House.
President Barack Obama meets with Warren Buffett, the Chairman of Berkshire Hathaway, in the Oval Office, July 18, 2011. (Official White House Photo by Pete Souza) This official White House photograph is being made available only for publication by news organizations and/or for personal use printing by the subject(s) of the photograph. The photograph may not be manipulated in any way and may not be used in commercial or political materials, advertisements, emails, products, promotions that in any way suggests approval or endorsement of the President, the First Family, or the White House.

Warren Buffett, who aside from being richer than Scrooge McDuck is one of the best writers on business around, comments thusly in his new letter to his shareholders: “One word sums up our country’s achievements: miraculous. From a standing start 240 years ago — a span of time less than triple my days on earth — Americans have combined human ingenuity, a market system, a tide of talented and ambitious immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers.”

I like that for what it says about immigrants and the rule of law. He basically is right. Still, to be rigorous, he should have at least nodded to the uncompensated labor of millions of people held as slaves. Some argue that their generations of sweat without equity contributed mightily to the American capital base.

He also points to an interesting consequence of low electricity prices: “Bargain-basement electric rates carry second-order benefits with them. Iowa has attracted large high tech installations, both because of its low prices for electricity (which data centers use in huge quantities) and because most tech CEOs are enthusiastic about using renewable energy.”

He also baldly states that the rich are doing very well indeed right now: “Both American corporations and private investors are today awash in funds looking to be sensibly deployed.”

Buffett also summarizes my investment approach better than I can: “Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively-financed American businesses will almost certainly do well.” (Tom’s italics)

Photo credit: PETE SOUZA/White House/Wikimedia Commons

Thomas E. Ricks covered the U.S. military from 1991 to 2008 for the Wall Street Journal and then the Washington Post. He can be reached at ricksblogcomment@gmail.com.

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