[lbo-talk] Re: Warren Buffett's philanthropy

Willy Greenfields filthydirtyunwashed at yahoo.com
Tue Jun 27 12:16:29 PDT 2006


Doug wrote re: Buffett:


>I don't really get what social contribution he's made
>that justifies his wealth

I'm of the opinion that his thinking's very close to your own. He's been saying for years that he was only able to amass his wealth because he was born a comparatively advantaged white male who operated in late 20th century capital markets, and he's been saying for just as long that he intended to return his money to society, which rightfully owned it.

One thing hleps clarify this. Buffett's long been interested in 'float' - money that isn't his but that he can make temporary use of. Think of the money an insurer takes in on premiums and keeps until claims are paid. I imagine he applied the concept to his philanthropic plans as well as his business. He'd always gotten stick for being relatively stingy in his charitable giving. But why, for example, should he have given returned $1 mil to society in 1981 when he could compound that for the next 25 years at 15% to return $33 mil?

You can't argue the math but you can question the mindset of someone who feels entitled to wrest control of society's rightful wealth even for ultimately benevolent purposes (megalomaniacal? patrician?). I can't get myself too worked up over it though, and I think it's excellent what he's doing.

And as to the tobacco quote, I believe it's legit. He owned RJR bonds and a large amount of UST (chewing tobacco) stock. I think he came to halve qualms about it all, as he reportedly passed on the opportunity to buy a very lucrative competitor.

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