Warren Buffett has been heavily in the news recently. Here are two big stories:
(1) Warren Buffett on tax: He encouraged the government to raise taxes on the rich, namely, the billionaires, the millionaires, and even the 200-thousandaires.
I was very shocked to hear (1) and strongly disagreed with Mr. Buffett. However, it was not until I saw (2) on “60 Minutes” a few weeks ago that I intuitively and immediately linked him with Chairman Mao by asking myself this question: the old men are all the same, aren’t they? Now, I have decided to publish my opinion about Mr. Buffett.
Here is my overall position on these two stories:
(2) Succession: As the largest shareholder of Berkshire Hathaway, Mr. Buffett certainly has the right to “recommend” his son as his successor to its Board of Directors. However, the Board owes it to all the shareholders to choose the most able, not the most connected, person to lead the company.
While I consider Mr. Buffett at the pinnacle of an American dream come true, I think he is very wrong on these two issues. Here is why:
(1) Tax: Mr. Buffett could not have made it himself without being in the U.S., the Land of Opportunities. Despite all the problems, we, the U.S., remain the best land on earth for anybody to make it, even as spectacularly as Mr. Buffett. Admittedly, America is deeply in trouble now. However, instead of identifying the root cause (e.g. out-of-control government spending) and fixing it (e.g. term-limits), Mr. Buffett wants more taxes and hence more government spending. Worse yet, he wants to deprive the rest of us of the opportunity of success he himself enjoyed and used to his huge advantage! Would he be as successful as he is with the crushing taxes he now proposes? Maybe he is just too old to know what he is talking about – No disrespect and without political correctness, just business!
(2) Succession: There is no success without succession (and vice versa)! Mr. Buffett had so many years to prepare his son for the top job at Berkshire Hathaway, but he was unable to do it. Now, after the departure of his long-time heir apparent, the 81-year-old Mr. Buffett seems to have no choice but to install his son at the helm, despite the fact that Howard is not qualified for the job by any normal standards! What is Mr. Buffett doing? Maybe he really is too old to know better. Once again, no disrespect and without political correctness, just business!
Here is the analogy between Mr. Buffett and Chairman Mao:
(1) Both are/were highly successful in their early years. Mao was the first person to have unified China over the past few hundred years; Mr. Buffett made it by himself and is now one of the richest men on earth.
(2) Mao made some grave mistakes in his late years, and Mr. Buffett appears to be making big mistakes now. Their traits on succession look particularly alike and troublesome. Here is what I wrote previously: “Mao spent the rest of his life scrambling for a succession plan, without success.” Mr. Buffett is scrambling for a succession plan now! If the classic saying “there is no success without succession” holds true, Mr. Buffett is likely to fail ultimately, because there is no reason for Howard to be at this top job, except that he is Mr. Buffett’s son. Howard is not very well prepared for the job, as he has acknowledged himself. Trial by fire often ends in flames – Time will tell.
Now, does it really make a good sense to compare Mr. Buffett, a businessman, with Mao, a revolution leader, in any way, be it in achievements or in mistakes? No, other than this general case in point: age matters! The more important you are, the more age matters. More specifically, when you are in an important position, you should be neither too young nor too old, especially when the well being of your country (or company) is at stake! Puzzled? Hear me out …
Look at what the Chinese did with the most important job in China: the Chinese Presidency. After suffering hugely from the rule of old men, epitomized by Mao, the Chinese set up an age range for the Chinese Presidency as follows:
(1) In theory, the minimal age to serve is 45 and capped at 78 (i.e. done and gone).
(2) In practice, a Chinese President typically takes office at about age 55 and finishes before age 70.
It has worked out remarkably well for China over the past two decades! Here is what I wrote previously:
With this kind of top-down age limit, plus a bottom-up laddered system for career advancement (e.g. governor->VP->President), a Chinese President is assured to have an optimal combination of experience (i.e. not too young) and judgment (i.e. not too old).
Here is the real message of this post: Age matters! We, the U.S., should learn from China and do something similar with the American Presidency, such as raising the minimum age to 55, enacting 1-term limits (e.g. 6 years), plus more!
Finally, two notes:
(1) On succession, Mr. Buffett is actually more like North Korea’s Kim II than China’s Mao: Kim II passed his empire to his son; Mao did not! For more info on North Korea and its recent succession, read this: America: What to Do with North Korea?
(2) Sorry, Mr. Buffett, I am not picking on you. I am simply using you as an example to help expose the faults in the American political system! A noble cause at any cost!
About the Author
Frank Li is the Founder and President of W.E.I. (West-East International), a Chicago-based import & export company. Frank received his B.E. from Zhejiang University (China) in 1982, M.E. from the University of Tokyo in 1985, and Ph.D. from Vanderbilt University in 1988, all in Electrical Engineering. He worked for several companies until 2004, when he founded his own company W.E.I. Today, W.E.I. is a leader in the weighing industry not only in products & services, but also in thought and action.