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He’s From Omaha. He’s Here to Help

Aug
14
2003

(All Fortune links redirect to the Fortune homepage.)
The best person to tell you about Warren Buffett is Bill Gates. But Gates is kind of hard to get a hold of.
Luckily, the second best person to tell you about Warren Buffet is a business reporter, Fortune writer Carol Loomis. The two are pals. She even helps edit Berkshire Hathaway’s annual report to shareholders.
So, if you want to gauge the effect that Buffett will have at Schwarzenegger Central, take a look at her reporting. And make no mistake, this is a serious thing, this Buffett advisory role. There are way too many formal statements, press leaks, and other quasi-official positioning maneuvers to think otherwise.
Loomis had a now-famous talk with Buffett about cleaning up Solomon Bros the investment bank that was crippled by scandal in the 1980s. And their interview about the stock market in 2001 is worth a look.
If you’re not already a subscriber, Fortune will make you pay to read these articles. But, if you really want to measure the Arnold effect, it’s probably worth the money. Because it’s looking like A.S. is going to be the businessman’s candidate. And in California as we know it now — particularly Northern California and Silicon Valley — a business-like approach to politics is baked into the soil. Remember, they grow Libertarians here.
The Oracle of Omaha likes clear, straight-forward accounting and bookkeeping. He thinks rich people should carry their fair share and that’s not a euphemism for reducing corporate taxes. He likes the estate tax. He thinks the Bush Administration’s tax cuts were a bad idea. He’s big on public accountability. That’s why the companies he runs are run well. They’re run clean. They’re run fair.
With Buffett signed on, the Schwarzenegger/Wilson camp has got to be looking at an overhaul of the state’s tax system. California’s tax code is everything Buffett hates. It’s confusing. It’s arbitrary and, more importantly, it does not work. It’s reliance on sales and income taxes is regressive and short-sighted. Among other things, it encourages commercial development and discourages housing construction. The paltry amounts of money the state is able to raise in property taxes go to Sacramento and disappear in the haze. The reliance on piecemeal bond issues to do things like pay for school construction is ridiculous. And that’s before you consider the shell game accounting that was used to construct this year’s state budget. California the feel of a semi-corrupt down-at-the-heels former colony, not the world’s fifth-largest economy and, for the most part, its tax structure is to blame.

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