Photo: Pete Souza.
During Berkshire Hathaway's (NYSE: BRK-A) (NYSE: BRK-B) annual shareholder meeting in Omaha, Neb., Warren Buffett and Charlie Munger take questions for nearly six hours from journalists, financial analysts, and shareholders.
This year, the first question from a shareholder was about President Barack Obama and the U.S. economy. The shareholder was a bit pessimistic, and he wanted Warren's take. Warren called for a "truce" on arguing politics, but he did express optimism about the present state and future of U.S. corporations.
Below are my notes on the shareholder's question, along with responses from Warren and Charlie.
Shareholder: The president's approval rating is at 40%. Steve Wynn says President Obama is the biggest wet blanket on the economy. The train is going in the wrong direction. Can you conduct Obama to change the train's direction?
Warren: I think I'll let you communicate with him [Obama] directly (laughs). I disagree with many things you've said here. I think American business is doing extraordinarily well. I think Obama cares more than others would. But that's politics, and we're not going to convince each other.
But if you're worried about corporations, you should look at the history of corporate taxes and earnings since World War II. If you look at returns on net tangible assets, we're the envy of the world. Corporate taxes rates are lower now than throughout much of Charlie and my career. At one point, we paid something like 52%. But I'll call a truce with you on that point.
Charlie: I don't like this one.
Warren: And people complain about me abstaining! [referring to abstaining from voting on Coca-Cola's (NYSE: KO) compensation plan]
Obviously, we all have our political opinions, and it's hard not to be biased in a conversation about politics. Warren acknowledges being a Democratic. Charlie classifies himself as a Republican. So you can weigh these comments based on that context.
