The Snowball

by Alice Schroeder

  “What?!” she said.

  “I can’t do it. Tell them we’re not going to play in the finals. Tell them I had a business emergency,” he said. Now Osberg had the job of explaining this to the World Bridge Federation.

  Nobody who qualified for the finals had ever decided not to play. The representatives of the World Bridge Federation were outraged that Warren Buffett would come to their tournament, endorse it by his famous and important presence, qualify for the finals, then try to leave. “You can’t do that!” they said. When Osberg insisted, they threatened to strip her of her ranking and credentials. “I’m not the one who won’t play!” she insisted, repeating that he had a business emergency. Finally, they accepted that she was only Buffett’s proxy, relented, and allowed the two of them to leave without punishing her.

  Naturally, Buffett had encouraged Bill Gates, who had fooled around with the game a bit, to become a more serious bridge player. He also sent Osberg to Seattle to set up Bill Gates Sr. on the computer to play bridge, thus beginning to inject her into the Gates family.

  Up until this point, he and Bill mainly saw each other attending football games, on the golf course, and at Microsoft events. But their relationship was gradually becoming much closer. On Easter weekend 1993, Bill and Melinda got engaged. On the way back from San Diego, Bill had the pilot give fake weather reports from Seattle to fool Melinda into thinking they were flying home. She was shocked when the aircraft door opened after they landed and Warren and Astrid were waiting on the red carpet at the bottom of the stairs. Warren drove them to Borsheim’s, where CEO Susan Jacques helped them pick out an engagement ring.

  Nine months later, Buffett flew to Hawaii for their New Year’s Day wedding, which would take place on the twelfth tee of the Four Seasons Manele Bay golf course on the island of Lanai. Even though his sister Bertie owned a house on the Big Island of Hawaii, Buffett had never been to Hawaii before. He was as excited about the Gates wedding as if one of his own children were getting married, although it could have been held in Dubuque, Iowa, for all he cared. He felt that Bill Gates was making one of the smartest decisions of his life by marrying Melinda French. However, Bill and Melinda’s wedding conflicted with Charlie Munger’s seventieth birthday party, which was taking place the same weekend. The famously loyal Buffett never dropped his old friends but sometimes had to play Twister to manage his relationships. If a conflict arose, he tended to resolve it by appeasing whoever he thought was most likely to get upset at him—which generally meant that he slighted the most loyal and trustworthy of his friends, the ones he could count on not to criticize or get angry at him. This left the rejected person the paradoxical consolation that he was the one Buffett most trusted and felt closest to. People who loved him understood this, so they put up with it.

  Munger, the long-standing friend, would tolerate almost anything of Buffett, even missing his seventieth birthday party. Gates was the newer friend; in fact, when it came to being in love with Gates, Buffett ran a close second to Melinda. So he opted for the wedding and brought Kay Graham with him. Graham, now seventy-six, traveled less often these days, but she still attended occasions of state like this. Moreover, Gates had just surpassed Buffett, who was now number two, to become number one in the U.S. money race. Together they made the tiny island of Lanai that New Year’s Day the wealthiest resort on earth. Warren, meanwhile, had sent Susie to Los Angeles for Munger’s party, where she sang.38

  Susie, long the queen on Warren’s chessboard, was used to this sort of thing. She had her own definition of what he needed from the women in his life, and pigeonholed each of them into a utilitarian category. One night when she was at dinner at Gorat’s with Warren, Astrid, and Sharon Osberg, whom she had recently met, she looked around the table and surveyed the company. Only Kay and Carol Loomis were missing from the harem. She laughed and shook her head. “Someone for everything,” she said. She had plugged Osberg into the “bridge” category. But Susie always downplayed the others’ roles; and like all of Warren’s women friends, each had the loyalty of Daisy Mae.

  Before long, Buffett was talking to Osberg several times a day on the phone, taking her along as a traveling companion on his trips, and making her one of the closest confidantes among his friends. Much like Astrid, however, she stayed in the background rather than upset the perceived order of all his other relationships, which Buffett had always tended to separate. By the mid-1990s, the public perception of how he spent his time and the way he actually spent it had long diverged. Buffett still played Twister to try to avoid hurting anyone, but as always, conflicts were resolved to appease whomever might erupt on him. The shrieking wheel got the grease.

  Sharon, like Astrid, was not a shrieker. She was quietly invited to Susie Jr.’s Thanksgiving dinners and included in bridge games with Bill Gates. A year after Bill and Melinda’s wedding, the Gateses were celebrating their first anniversary on January 1, 1995, at their house in San Diego. Buffett invited Bill, Charlie Munger, and Sharon to come over for a New Year’s Day bridge game. While Susie, long accustomed to Warren’s choosing his own pursuits even in the midst of a family gathering, spent the day with family and friends, Gates, Osberg, and Buffett sat down at the bridge table to wait for Munger. Buffett, who always ran precisely on schedule, noted that it was time to begin but otherwise ignored Munger’s tardiness since nobody else seemed bothered by it.

  Gates was in a pleasant mood, but as they chatted, Buffett began growing irritated that they were being kept waiting. When Munger did not appear after a few minutes, Osberg suggested a game of three-handed bridge to keep the others entertained, partnering with both Buffett and Gates while keeping up her end of the conversation.

  After forty-five minutes of three-handed bridge, Buffett, who was playing the polite host, cracking jokes and making conversation, trying to make everything okay, had become noticeably jumpy and restless. Suddenly, he flew out of his chair. “I know where he is,” he said. He snatched up the phone and called the Los Angeles Country Club.

  Whoever answered the phone went off to search. Within a few minutes he had located Munger in the golf grill, sitting with his cronies, as he habitually did every day when not at the office. He was about to take a bite of a sandwich.

  “What are you doing, Charlie?” Buffett asked. “You’re supposed to be playing bridge with us.”

  “I’ll be there in a few minutes,” Munger replied.

  Without a word of apology, he hung up the phone, put down his sandwich, and headed out to the car.

  Half an hour or so later, Munger strolled into the Buffetts’ house at Emerald Bay, sat down at the table exactly as if nothing had happened, as if he hadn’t noticed that he’d kept Bill Gates waiting for an hour and a half on his first anniversary, and said:

  “Happy New Year. Let’s play.”

  Stupefied, the other three sat in silence for a moment.

  Then Gates said, “Okay. Let’s play.”

  They played.

  Another group of Buffett’s loyal friends joined him for their biennial ritual when the Buffett Group held their meeting at the Kildare Club in Dublin in September 1995. Because Bill Gates was present (for Gates straddled all of Buffett’s worlds, since Buffett would have liked to become his Siamese twin), the government of Ireland treated them like emperors. They were met at the airport by official government limousines and watched over by security agents in helicopters. They dined with the chairman of Guinness, the Taoiseach*30 and his wife, and the U.S. ambassador, walked the cobblestones of Trinity College to the Book of Kells, and clapped their hands in awe at the sleek hunt stallions of the Irish National Stud in County Kildare. Never—even under Kay Graham’s auspices in Williamsburg—had they experienced such luxury. Filled with incredible artwork and antiques, the K Club raised all of its own food on site and prepared it with a European staff and chefs.

  The gloss and glamour of the surroundings belied the fact that the Buffett Group members, many of them fabulously wealthy by now, were largely unch
anged. Warren saw some of these people only once a year or so; yet he remained utterly devoted to them. Bill Ruane was still gregarious and told long, funny stories. Walter Schloss still lived in a tiny apartment and picked stocks the same way he’d always done. The Stanbacks, among the richer members of the group, still would not dream of flying any class but coach. Sandy Gottesman still questioned everything skeptically and wanted an override on every deal. Tom Knapp had finished buying up huge chunks of the Maine coastline and started in on Hawaii. Jack Byrne was as pumped full of energy as ever. Roy Tolles still kept his thoughts to himself, except for shooting off a one-liner every now and then. Ed Anderson and Joan Parsons pumped money into human-sexuality research, but Ed still picked up pennies in the street, unless they were really dirty. Marshall Weinberg was still an irresistible flirt. Lou Simpson was still such a good stock picker that he had become one of the Superinvestors of Graham-and-Doddsville. Carol Loomis had made enough money from Berkshire stock to fly in a private jet but still couldn’t buy a jar of pickles without reflecting on the luxury of pickles during her Depression-era childhood.39 Retired from building gigantic dams and bridges, Walter Scott now built gigantic houses instead. After going to the theater, Joyce Cowin still walked up Broadway and across the park to the Upper East Side in a snowstorm rather than take a cab. Ajit Jain, now a Buffett Group member, spent most of his time in his room during the meetings, doing deals at a furious pace to please Buffett. Ron Olson, who had once been liked by most people that Buffett knew—except Judge Brieant—was now liked by most of the people in greater Los Angeles. Then there were Bill Scott, Mike Goldberg, and Chuck Rickershauser, all in various states of retirement from working for years close to the nice, warm sun, also all in various stages of recuperation from the effects of Rickershauser’s Law of Thermodynamics.40 Bill Gates, unlike the rest in so many ways, shared the group’s intellectual interests and complete lack of pretense. As for Kay Graham, she remained their one real connection to echelons of society that titillated them even while failing to seduce them. “Oh, Princess Diana,” she would say. “Such a good friend. Much more there than is obvious.”

  Amid the K Club’s luxury, Buffett handed out copies of a booklet, The Gospel of Wealth by turn-of-the-century industrialist and philanthropist Andrew Carnegie. As he celebrated his sixty-fifth birthday, and took stock of his life to date, he had been rereading Carnegie. Now he led the group in a debate of Carnegie’s premise that “He who dies rich dies disgraced.” Carnegie had honored that philosophy, spending nearly his whole fortune, one of the greatest in history at the time, to establish libraries in towns and cities all over the United States.41 Buffett had always planned to die rich and disgraced, as Carnegie would put it, so that there would be more to give away after he was gone. He insisted that the best use of his talents was to keep making more money until he died, and he had no interest in being personally involved in the foundation’s work. That would be Susie’s project. But he wanted to hear what other people thought and obviously was giving some consideration to this question.

  They went around the table. Bill Ruane, who had never cared much about money and was poor compared with the rest, was about to undertake a project to transform the worst of New York’s public schools. He would later go on to work with Columbia University to screen thousands of New York City schoolchildren for mood disorders and suicide risk.42 Fred and Alice Stanback were among the most important donors to environmental causes in the United States. Tom Murphy was chairman of Save the Children. Jane Olson, Ron’s wife, chaired the international board of Human Rights Watch. Before Dan’s death, the Cowins had donated an important collection of art to the American Folk Art Museum. Charlie Munger gave to Good Samaritan Hospital and education. Walter and Suzanne Scott had donated huge amounts of money in Omaha. Ruth Gottesman served on the Albert Einstein College of Medicine Board of Overseers. Marshall Weinberg was gradually giving away nearly all of his money for scholarships, world health, Middle East issues, and educational research. The others had their own causes.

  When his turn in the conversation came, Bill Gates said, Shouldn’t the measure of accomplishment be how many lives you can save with a given amount of money? He agreed with Buffett that you had to make the money first in order to have the money to give away. But as soon as he had made a certain amount, Gates said, he was going to use it to save more lives in the present, by giving most of it away.43

  The Buffett Foundation was spending very little money in proportion to Buffett’s wealth. Buffett had chosen two main philanthropic issues, overpopulation and nuclear proliferation, problems that are almost unimaginably hard to solve. Nuclear proliferation didn’t lend itself well to financial solutions, although Buffett would have given as much money as he could to his highest priority, any plausible way of reducing the probability of nuclear war. His analysis of the problem was, characteristically, statistical.

  “A nuclear attack is inevitable. It’s the ultimate problem of mankind. If there’s a ten percent probability that something will happen in a year, there’s a 99.5 percent probability that it will happen in fifty years. But if you can get that probability down to three percent, that reduces the probability to only seventy-eight percent in fifty years. And if you can get it down to one percent, there is only a forty percent probability in fifty years. That’s a truly worthwhile goal—it could literally make all the difference in the world.”

  The other great problem, in Buffett’s view, was the strain placed on the over-burdened planet by too many people. Lacking a way to solve the nuclear problem, population control was where the Buffett Foundation had spent most of its money since the mid-1980s. This, too, he approached from a mathematical perspective. In 1950, the world’s population had been about 2.5 billion. A mere two decades later, shortly after Paul Ehrlich’s The Population Bomb was published, the world population was close to 3.7 billion.44 Ehrlich had predicted that the 1970s and 1980s would be times of massive, worldwide starvation, with hundreds of millions of people dying. By 1990 the world’s population had passed the five-billion mark, mass starvation had not occurred, and Ehrlich’s ideas were no longer taken seriously by many experts—even though the population had grown dramatically. The debate essentially centered over whether technology could outpace population growth, species extinction, and global warming. Buffett looked at the problem of expanding population and diminishing resources in terms of a “margin of safety.”

  “There is a carrying capacity to the earth. It’s far, far, far, far, far greater than [Thomas] Malthus ever dreamed. On the other hand, there is some carrying capacity, and the one thing about carrying capacity is that you want to err on the low side. If you were provisioning a huge rocket ship to the moon and had enough for two hundred people and didn’t know how long the journey would take, you probably wouldn’t put more than a hundred fifty people on the ship. And we have a spaceship of sorts, and we don’t know how much the provisions are good for. It’s very hard to argue that the earth would be better off in terms of average happiness or livelihood with twelve billion people instead of six.45 There is a limit, and if you don’t know what that limit is, you’re better off erring on the safe side. It’s a margin of safety approach for the survival of the earth.”

  Since the 1970s, Buffett had focused on giving women access to contraception and abortion—issues that were close to Susie’s heart—as the answer to out-of-control population growth. This was a standard point of view among humanist organizations at the time.46 Munger, Tolles had gotten Buffett involved in supporting an important court case in California, People v. Belous, which was a major step on the road to the landmark abortion ruling in Roe v. Wade.47 Charlie Munger took up this case with a passion; the firm had chosen it out of concern over the way young women were being maimed and killed through illegal abortions. Buffett and Munger sponsored a “church” called the Ecumenical Fellowship, which became part of the country’s abortion underground railroad.48

  Buffett had been especially moved by the logic
of Garrett Hardin, whose 1968 article “The Tragedy of the Commons” laid out the way that people who have no ownership stake in common goods—the air, the seas—overuse and destroy them.49 While Buffett adopted many principles conceived by Hardin, a leader of the “population control” movement, he rejected solutions favored by Hardin, who espoused authoritarian ideas and took a eugenicist approach. Hardin had written that the meek not only would inherit, but already had inherited the earth. He considered this “genetic suicide”: “Look around you. How many heroes do you number among your neighbors? Or your colleagues?…Where are the heroes of yesteryear? Where is Sparta now?”50

  Buffett thought that the idea of bringing back Sparta had already been tried. The man who had tried it was Adolf Hitler. The Spartans had groomed themselves genetically by abandoning weak or “undesirable” babies on a mountain-side. Modern eugenics was a social philosophy formulated by Sir Francis Galton, who drew on the work of his cousin Charles Darwin and theorized that selective breeding of the human race could improve the quality of the population. This notion had received extremely widespread support in the early twentieth century, until discredited by the experiments of Nazi Germany.51 There was no safe way to think along lines like those Hardin was pursuing, which led to a deadly division of humanity into competing groups.52 Buffett had renounced this view in favor of a civil-rights-based approach to the problems of spaceship Earth.

  Accordingly, by 1994, Buffett’s emphasis had shifted from “population control” to reproductive rights.53 This change corresponded with a worldwide evolution in thinking among the population control movement. Women “were no longer to be treated as a convenient means toward the ‘end’ of population control.”54 Buffett had always felt that any means of solving the population problem that involved coercion was out of the question.55 Now he went a step further. “I wouldn’t in any way limit a woman’s right to bear children even if the world were extremely overpopulated, and I wouldn’t ban the right to choose even if there were only two people on the planet and fertility was critical. I think the world should be limited to wanted people first. I don’t think that the numbers should determine how many people are wanted. Even if everybody had seven children, I wouldn’t do as Garrett Hardin said and link the right to the numbers.” So the Buffett Foundation supported reproductive rights.