Why Buffett bought BNSF

Have been intrigued for years about a man who is now one of the tippy-top taxpayers in Flathead County. Last year, an alumni report from the University of Montana told of a group of Montana college students who got to spend time talking to him in his Omaha, Neb., office, and I wondered how one of the busiest and richest men in the world could, and would, take valuable time to chat with people he didn't know. Was even more surprised when I learned he treated them to lunch. Course ... he does own the restaurant.

Perhaps the most interesting man in America also set me to wondering a couple years back when right out of the blue he bought BNSF Railway for $33 billion. He recently revealed why he was spending billions more upgrading tracks here in Montana and generally modernizing the entire operation.

Many of the answers to mine and others' questions are found in the Jan. 23 issue of Time Magazine. He told Time the BNSF deal was "the most important purchase Berkshire ever made." It was a bet on higher energy prices, which would favor coal-hauling trains over trucks, and on a general pickup in consumer demand. Berkshire Hathaway is Buffett's operational organization which owns or controls 76 widely diverse big businesses.

A few politicians have called Warren Buffett a "socialist billionaire," and others called him worse. He gives aggressively to charities and greatly respects all kinds of working people. He made few friends in the conservative circle of power when he wrote an op-ed article in the New York Times last summer saying "Washington needs to stop coddling the super-rich."

He supports a higher tax for the "millionaire club" because it is only fair and they can afford it. Buffett says he feels guilty about owning a private jet and feels he and others like him should pay more taxes on those luxuries, needed for business or not.

He often points out that his office staff pays higher taxes than he does. Doing the arithmetic on that, Buffett paid a tax rate of 11 percent on adjusted gross income of $62,855,038, which came out to 17 percent of his taxable income of $39,814,784. His staff paid somewhere in the 30 percent range.

I am not going to just repeat items from the lengthy Time feature story; however, for you folks who don't read Time, I am picking out a few more interesting items. Warren Buffett had a mistress who was picked out for him by his wife in a complex arrangement. He did marry her when his wife died of cancer.

The 81-year-old Buffett has made arrangements for 99 percent of his wealth to go to charities, mostly through the Bill and Melinda Gates Foundation. He lives in a home purchased in 1958 for $31,500, has been seen at his modestly furnished office turning out lights in unoccupied rooms, and believes there will always be a bottom 10 percent of people "in terms of capacity."

Time says Buffett's Berkshire Hathaway operation "throws off" a billion in cash per month, and his approximate personal net worth of $46 billion qualifies him as the third richest person in the world.

On another subject, last week's news included a Seattle man who got separated from a climbing party on Mt. Rainier and spent two days surviving in cold weather. A main source of fuel for a fire were paper bills from his wallet. If I was in the same situation, I'd be lucky to last 20 minutes.

G. George Ostrom is a national award-winning Hungry Horse News columnist. He lives in Kalispell.