The Difference Between Warren Buffett and Politicians – When Mr. Buffett is Wrong He Admits He was Wrong

Refreshing Candor from a Man The Wall Street Journal Hates

Warren Buffett through no fault of his own is a controversial figure.  A multi-billionaire, he has enraged Conservatives by daring to propose that wealthy people pay more in taxes.  A rapacious businessman, he has decided that most (but not all) of his vast fortune will go to charity.  An unassuming man who still lives in Omaha, he regards himself as a fountain of wisdom (which he generally is).

In his latest communication to investors in his company, Mr. Buffett admits that he made a mistake.

Billionaire investor Warren Buffett said Saturday that he was "dead wrong" with a prediction that the U.S. housing market would begin to recover by now, but that he remained optimistic about the nation's economy.

In his annual letter to Berkshire Hathaway shareholders, Buffett said he was sure housing would recover eventually and help bring down the nation's unemployment rate. But he did not predict when that might happen.

This type of mistake is costly to a business that relies in part on the construction industry.

The housing prediction proved painful for Berkshire Hathaway. It owns more than 80 subsidiaries, including Geico insurance company and See's Candy, and five of them rely heavily on construction activity.

And Mr. Buffett rightly states that eventually the housing industry will recover

In the letter, Buffett said housing "remains in a depression of its own," but he predicted, in typical plain-spoken style, that the housing market would come back because some human factors can't be denied forever.

"People may postpone hitching up during uncertain times, but eventually hormones take over," he wrote. "And while 'doubling up' may be the initial reaction of some during a recession, living with in-laws can quickly lose its allure."

In the meantime Mr. Buffett will just have to be content to know that his name now adorns a basic economic fairness principle, the “Buffett Rule” which states that very wealthy people should  pay at least 30% of their income in taxes.  You can see why that would infuriate the Conservatives, many of whom think the rest of us should pay all of the taxes and let the rich pay none as an expression of our gratitude for the rich being rich.