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Sunday, November 15, 2009

Warren Buffett's Father was a Congressman

This story had an interesting tidbit I hadn't seen mentioned elsewhere. Warren Buffett's father was a Congressman.

You might say "So what?" This is an important point.

Warren Buffett is not someone who came out of nowhere to manage a multi-billion dollar business. Like Bill Gates, Warren Buffett was the beneficiary of politically connected parents. Someone as skilled as Warren Buffett, but lacking the connections, probably would not have been as successful.

It's one thing to say "I'm starting an investment business! Please let me manage a couple million dollars for you!" It's another to say "My father is a Congressman! I'm starting an investment business! Please let me manage a couple million dollars for you!" The latter sales pitch is *MUCH* more effective than the former.

Even if I could manage an investment fund as well or better than Warren Buffett, I don't get the opportunity to try. I can invest my own money intelligently, but I don't get full benefit of the Principal-Agent problem unless I'm managing other people's money. I don't have the same connections as Warren Buffett's parents.

In many ways, being a successful money manager is like winning a coin flipping contest. Is Warren Buffett an investment super-genius? Or, is he someone who managed to flip heads a couple times in a row early in his career? Even if I could flip coins as well as Warren Buffett and other superstar hedge fund managers, I don't even get the opportunity to try. Only people with connections are allowed to even enter the coin flipping contest business.

Even if Warren Buffett's investors got a good deal, that doesn't mean he wasn't exploiting his father's political connections. Someone with Warren Buffett's connections, but not his skill, would not have been as successful. Someone with Warren Buffett's skill, but not his connections, would not have been as successful. The political connections greatly helped his odds of success.

Warren Buffett and Bill Gates had *TWO* big advantages. First, they had excellent political connections. Second, they had the ability to leverage the headstart their connections gave them. Someone with the same raw talent (or greater), but lacking the connections, would not have been as successful.

A pro-State troll says "The US economy is fair! Bill Gates and Warren Buffett built hugely successful businesses!" Both of them are touted as examples of why the USA economic system is wonderful. Both of them had politically connected parents. Both of them used State violence to help them build their business.

The vast majority of the "titans of industry" have profited directly or indirectly from State violence. There are very few people who have successfully built huge businesses without some support from the State.

Any large and successful business *MUST* spend money lobbying the State for favors. Otherwise, your competitors will lobby the State to shut down your business.


s_baar said...

You assume too much. I read a bio on Buffet. His father's status never gave him any advantages. He was quite a ways into his career before he started managing people's money as he does now.

Anonymous said...

He wants high taxes for rich people, but he doesn't want to pay any himself. He's giving everything away to "charity"...his own "charity" that he made up. That seems to be the latest thing for the super-parasites: make up your own charity to hide assets until it's safe to take them out again.

Anonymous said...


I have always suspected that, ever since my parents told me to "not be stupid". They told me that a real life is quite a trick.

"Every magnificent person that has a counter-logical thing about them are shills. If you dig deep enough, you will always find either a crime or a connection, but in most cases, both in their past."

I agreed with this rule, even though otherwise I was quite a rebel. It just does makes sense.

I saw that Buffet was not quite right to actually be what he purports to be. I just didn't know what that was. About a month ago, I saw the same information somewhere, yep, sure as hell his daddy was a big bad congressman.
Oh what a gifted child, oh!!!!

I say, forget about me. None of my friends, quite bright folks, EVER got anything like what Buffet got.

And, my parents have no reasons to worry, I am not stupid, I can put two and two together!

When I heard Buffet talking that crap about taxing inheritance, I knew two things. First off, he is not that big on understanding economics. Because anyone who does, knows very well, that the problem is not rich people or their inheritance, and not the stupid "inequality" as poor people are trained to think. The problem is that there is disrespect to private property, which insures that poor will stay poor. Had it be otherwise, then the natural law would mix it all up pretty quick, and all big would die off to be replaced by small. Small, smart, hardworking and efficient would rise.

Secondly, I knew he has got a guilt for inheritance. Hmmm?

Now I know the rest of the story.

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