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Paul B. Farrell
Jan. 18, 2011, 12:01 a.m. EST
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By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) "” "The important thing is not this year," Buffett tells Vanity Fair, "but where Berkshire is 20 years after I die. Not taking care of it would be like not having a will, cubed."
Twenty years? But that's 2030, a decade after our defense budget drives Americans further in debt preparing for the Pentagon's 2020 prediction that "as the planets carrying capacity shrinks, an ancient pattern of desperate, all-out wars over food, water, and energy supplies would emerge ... warfare is defining human life."
Just days ahead of Chinese President Hu Jintao's visit to Washington, Secretary of State Hillary Clinton urged China to improve its human rights policies and to accept more responsibility as a global leader. Jerry Seib has details.
Warning to Berkshire /quotes/comstock/13*!brk.a/quotes/nls/brk.a (BRK.A 122,475, +1,275, +1.05%) /quotes/comstock/13*!brk.b/quotes/nls/brk.b (BRK.B 81.65, +0.89, +1.10%) shareholders: Buffett's wrong, the most important thing really is this year, not 2030. Not even 2020. That's too late. Why? Because the "will of the people" and the unpredictable "will of God" will always trump Buffett's "will." Worse, There are four powerful trends that can easily and swiftly make his legacy disappear long before 2030.
War's been very much on Buffett's mind. During a New York Times interview around the same time as the Pentagon's WWIII predictions Buffett remarked: "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning."
And global war: Remember Buffett once called derivatives financial "weapons of mass destruction" in Fortune. Then, after Wall Street's 2008 meltdown, he surrendered to the enemy, investing billions in Goldman, headquarters of the world's most destructive derivatives traders. What will his heirs have to surrender?
Yes, Berkshire loyalists have more to worry about than Buffett's will: So when all 40,000 of you gather in Omaha's Qwest Center this May, start asking about America's future "¦ about the decline of our middle class "¦ about the impact of the global population exploding 50% in a generation "¦ ask about 9 billion people demanding ever scarcer commodities "¦ ask about how America's debt-burdened taxpayers will react when the Pentagon war-machine demands ever-larger budgets to defend against terrorists, drug cartels and a far bigger threat, a more aggressive China building stealth bombers capable of delivering nuclear weapons, and a China rapidly buying up strategic long-term commodity rights all over the planet, in Australia, Africa, South America and Eastern Europe. Are you asking the tough questions?
Yes, the years ahead will be very threatening for Berkshire. You know it. So does Buffett. But his will is more important to him than it should be to you. Why? It will be ineffective crossing the unpredictable global economic minefield ahead, no defense against all the hidden economic IEDs and weapons of mass destruction more deadly than derivatives.
Buffett may be a legend. But he cannot be cloned. And the economy that made him rich is old news.
So forget the will. And forget 2030. But will Buffett also rise to the occasion and face today's issues today, before the handoff? Or will we just see another bizarre carnival spectacle in Omaha, with convention booths pushing See's Candy, other Berkshire investments, trips to Omaha's Dairy Queens, barbecues and Uncle Warren strumming his ukulele again.
Here's our challenge to Buffett: Focus on the four biggest issues facing Americans by inviting four brilliant minds to speak to your shareholders in May. Challenge your shareholders to think bigger by listening closely to these four talking about the overarching trends, and the near-term decisions that will impact Berkshire stock for generations:
In the latest Foreign Policy Journal, Immanuel Wallerstein, Yale scholar and advocate of "world-systems analysis" warns that "The Global Economy Won't Recover, Now or Ever." Never? Berkshire shareholders better listen: "Virtually everyone seems to believe that in the next few years the world will somehow "?recover' from these difficulties" since 2008. "But it is wrong," warns Wallerstein.
"All systems have lives. "¦ Our existing system, what I call a capitalist world-economy, has been in existence for some 500 years and has for at least a century encompassed the entire globe. It has functioned remarkably well. But like all systems, it has moved steadily further and further from equilibrium. For a while now, it has moved too far from equilibrium" into a "structural crisis."
"The only sure thing is that the present system cannot continue. The fundamental political struggle is over what kind of system will replace capitalism, not whether it should survive." Get it? Capitalism is dying, rapidly.
Paul Farrell writes the column on behavioral economics. He's the author of nine books on personal finance, economics and psychology, including "The Millionaire Code," "The Winning Portfolio," "The Lazy Person's Guide to Investing." Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a Juris Doctor and a Doctorate in Psychology.
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3:34 p.m. Jan. 17, 2011
"Four reasons Buffett's legacy will die by 2020 http://on.mktw.net/e9XjFj" 12:09 a.m. EST, Jan. 18, 2011 from MKTWFarrell
"8 rules for our new gender-based economy http://on.mktw.net/gjXOTG" 12:22 a.m. EST, Jan. 11, 2011 from MKTWFarrell
"America's 10 worst years start right now http://on.mktw.net/fOVFsf" 7:59 a.m. EST, Jan. 4, 2011 from MKTWFarrell
"Twelve tips for profiting on commodity demand http://on.mktw.net/hKQVMb" 12:35 a.m. EST, Dec. 28, 2010 from MKTWFarrell
"Use "?Noah's Ark' survival kit for a stormy 2011 http://on.mktw.net/hx9x1L" 12:12 a.m. EST, Dec. 21, 2010 from MKTWFarrell
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