2005: What does Buffett think about education reform?

AUDIENCE MEMBER: Hello. My name is Martin Wiegand from Chevy Chase, Maryland.

On behalf of the assembled shareholders, we appreciate you and the Berkshire staff hosting this weekend and would like to thank you for building this community of shareholders.

WARREN BUFFETT: Martin, thank you. (Applause)

I should point out that I dated Martin’s aunt, but she only went out with me once. Maybe you could explain that, Martin. (Laughs)

AUDIENCE MEMBER: New board member Bill Gates has been talking about education reform in America, and columnist George Will quoted you in an article about Patrick Byrne’s efforts to reform education in America.

Could you share with us some of your thoughts about these two efforts, or your efforts, to reform education? Thank you.

WARREN BUFFETT: Well, interestingly enough, we just dedicated a school here in Omaha yesterday which is named after my Aunt Alice, who taught in the Omaha public schools.

And we’ve — I think we’ve maintained quite an excellent public school system in Omaha. We also have an outstanding parochial school system here.

You know, it takes the interests of parents and, frankly, it takes the interests of the well-to-do in the school system to keep a first-class school system.

I’ve said that, to some extent, a public — a good public school system is a lot like virginity. It can be preserved but not restored.

In Omaha, we preserved it, but you preserve it by having the parents interested and involved in the public school system.

And Patrick’s got an ingenious idea to make sure that more of the money goes to teaching and less to administration and overhead.

There’s a variety of ideas around about how to correct a system where it’s broken. And Charlie, as a big Ben Franklin enthusiast, has always said that an ounce of prevention is worth a pound of cure, and I think we’ve been spending that ounce of prevention, or providing it, here in Omaha.

I think it’s a — you know, Charlie will have a lot more to say on this.

I admire the fact that people like Patrick and Bill Gates and a lot of other people, John Walton and Teddy Forstmann, all kinds of people — Bob Wilmers, up in Buffalo — are attacking the problem.

It’s probably the — next to the nuclear, chemical, and biological problem — I mean, it’s the number one problem of the country is making sure that the educational system is the best in the world.

We’ve got the resources and we’re not providing it, we’re not delivering it.

So, it’s very complicated when you operate through thousands and thousands of school districts and you work with many, many unions, and you’ve had, to a great extent in many areas, the rich opt out of the system and set up a separate system.

You know, I am not as concerned about the public golf courses in Omaha as I might be if I played them every day instead of playing at a country club.

And if you have a two-tier school system, one for the rich and one for the poor, it’s going to be hard to pass bond issues that benefit the people that don’t have the money to send their kids to private schools.

I’m a big believer in the public school system, though, in terms of equality of opportunity in this country. (Applause)

Charlie’s thought about education. He’s actually come close to running a school. Cares about it enormously, so I’ll turn it over to him.

CHARLIE MUNGER: Well I learned something rather interesting about Omaha public schools on my way to this meeting.

I stopped to sign some books in a warehouse in South Omaha, and one of the very nice people in the warehouse was married to an eighth grade teacher in the Omaha public schools. And we got to talking about “No Child Left Behind.”

And he said his wife, this eighth grade teacher, had a very interesting system. For the numerous children who couldn’t read, she records “books on tape,” speaking slowly in her own voice.

And when some children are reading the books, other children are listening to the tapes, and that way the children who listen to the tapes are not left out when they ask questions about what went on in the books

Well, this is “No Child Left Behind,” in a sense, but it’s also a failure, in a sense. And I think it’s very hard for a civilization to fix the situation once somebody is in the eighth grade and can’t read.

So I think there’s a lot of failure, even in relatively advantaged places like Omaha. And it’s very serious failure. We never should have allowed it to happen.

WARREN BUFFETT: Yep. My friend Bill Ruane, who is here — I believe he’s here — is doing something extraordinary, in terms of a program he has teaching kids to read. In fact, journalists who are here should seek out Bill and learn something about the story of what he’s done in the last 10 years, in terms of moving reading abilities, and kids’ enthusiasm for reading, which is more important because it’s, you know — I talked about our managers and the important thing is that they have a passion for their business.

Well, passion for reading can be developed and Bill has shown that in programs that he — I think he first started them in Harlem. He sort of adopted a block up there and went from there. And he would be a very interesting fellow to get some views from on this subject.

You know, we’ve had this great success story in this country and a lot of it is because of people have had something closer to equality of opportunity in the United States than they’ve had in most parts of the world.

And you do not have equality of opportunity when my kids get to go to some school where I can attract outstanding teachers and where they’re in the company of other kids that are also motivated and they’re getting encouraged at home and all sorts of other things, and somebody else, who is born into a less advantageous family, really doesn’t have a chance.

They go into something that’s close, maybe, to an armed camp where the teachers are just sort of pushing them through. And there’s no stimulus from the other kids except to do things that are counter to the interests of society.

And that just isn’t a situation that really should be allowed to exist in a country where the GDP is almost $40,000 per capita