Warren Buffett, at Berkshire Meeting, Condemns Republican Health Care Bill
Several questions homed in on politics, and Mr. Buffett, a Democrat with close ties to former President Barack Obama, offered measured criticism of President Trump’s policies. He argued that the American Health Care Act, which passed the House this past week, amounted to “a huge tax cut for guys like me.” He also said rising health care costs, rather than high taxes, were the biggest drag on American businesses.
“Medical costs are the tapeworm of American economic competitiveness,” he said.
Mr. Buffett also argued that executives at Wells Fargo, in turning a blind eye to the creation of fraudulent accounts to meet sales goals, had fostered a toxic culture. Of the bank’s ousted chief executive, John Stumpf, Mr. Buffett said, “The moment the C.E.O. heard about it, he had to act. He didn’t.”
Yet Mr. Buffett and Mr. Munger stood by Wells Fargo and other Berkshire investments, including United Airlines and Coca-Cola. When a protester from Germany delivered a long speech decrying Coke, sugar and capitalism itself, Mr. Buffett said he would continue to drink his favorite beverage, Cherry Coke.
In contrast, the billionaire offered little defense of one major holding of Berkshire: IBM. Berkshire announced on Friday that it had sold one-third of its stake in the struggling technology company.
Mr. Buffett also defended one of his favorite business partners of late, 3G Capital, a Brazilian investment firm that has backed both Kraft Heinz and Burger King. At the meeting, Mr. Buffett disclosed that, as Kraft Heinz worked on its now-dead takeover bid for the consumer products giant Unilever, Berkshire was prepared to invest $15 billion in the potential deal.
But 3G has been frequently criticized for its ruthless cost-cutting measures, including layoffs. Still, Mr. Buffett said that layoffs were sometimes necessary to make companies more productive.
“Change is painful for a lot of people,” he said. “I think it’s absolutely essential to America that we become more productive, because that’s the only way we increase consumption per capita.”
Mr. Munger, known for delivering more succinct answers, added, “We don’t see any moral fault with 3G,” though he allowed that he understood the political responses to the firm’s strategies.
Mr. Buffett also explained that, in his view, Berkshire’s investment in Apple — despite his noted aversion to investing in technology companies — was more a bet on a highly successful peddler of consumer electronics than a wager on technology per se.
To no one’s surprise, Mr. Buffett did not mention who would take over for him as Berkshire’s chief executive. The billionaire has long said that he plans to work for as long as possible, and while he has identified successors for his roles as Berkshire’s chairman and top stock picker, he has not said who would actually run the company.
Still, he allowed that he expected Berkshire’s next chief to already be rich after a career of business success. And in answering a question about how much that person would be paid, he took a swipe at compensation consultants who often urge corporate boards to pay their managers extravagant salaries. “If the board hires a compensation consultant, I’m coming back!” he joked.
Continue reading the main story