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Warren Buffett Wades Into Politics, Why Not John Oliver’s Piece on “Mobile Homes?”

April 11th, 2019 Comments off

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Billionaire investor Warren Buffett is once again wading into the topic of politics,” according to CNBC in an article linked here.

 

The article is entitled, “Warren Buffett wants to ask the 2020 presidential candidates this 1 question.” The Daily Business News on MHProNews will explore that as our focus for this post, but first we will ask this question. Since Buffett surely must know about John Oliver’s blast at him and his company, why didn’t he wade into that topic too?  You can learn more and – see the Oliver video with a withering fact-check – at the link below.

 

HBO’s John Oliver on Last Week Tonight Mobile Homes Video, Manufactured Home Communities Fact Check

 

Or was Oliver’s comedic hit on Buffett, Clayton Homes, and numbers of key members of the Manufactured Housing Institute (MHI) too challenging a topic for the Oracle of Omaha to delve into?  Is Oliver’s hit a shark in the water, launched by MHAction, which a money trail reflects has had funding from Buffett backed entities?

We’ll let those questions hang for industry professionals, investors, and advocates, as we unpacked part of what CNBC reported on the Solon of Stocks who hails from Omaha wants to ask 2020 candidates.

The following bullets are pull quotes from CNBC’s article, linked above.

  • Buffett, who supported Democrat Hillary Clinton in the 2016 presidential election and has previously weighed in on whether or not executives like Michael Bloomberg or former Starbucks CEO Howard Schultz would make good candidates, said in a recent interview that there is one question he would want to ask the field of candidates planning to run for the White House in 2020.
  • I want to hear what they tell people who disagree with them,” Buffett told Yahoo Finance on Monday. “I would like to ask a candidate: ‘What are you for that the majority of your followers are against?’” That’s the best way to be sure that a candidate really believes in a particular issue, according to Buffett. “That’s really the test,” he says in the interview.
  • Those comments from Buffett came in response to a question about whether the billionaire would ever ask a candidate what they think about the economy or other issues. Buffett laughs and points out that any candidate would probably just “tell me what I want to hear” to win his support, which is not what the billionaire would want.
  • For Buffett, being strong-minded but having enough respect to hear out someone with a different opinion or point of view is a positive thing.

Let’s stop right there for now. We’ve asked the Berkshire brands in MHVille, and their purported national mouthpiece, the Manufactured Housing Institute (MHI) to apply a standard quite like that last bullet from their boss, Buffett.

For years, Jim and Kevin Clayton, Tim Williams at 21st, top or mid-range MHI officials – they all responded to our MHProNews inquiries, often within the hour. About 2 years ago, all of that stopped.  Which begs the question, why? Why not reply to the manufactured home industry’s most read trade media?  Why not apply this Buffett rule outlined in this CNBC interview of direct, respectful engagement?  Or of listening carefully to what the other side has to say?

Let’s remind readers of this penetrating quote from Joe Concha at the centrist publication, the Hill, and move on with our analysis of CNBC’s interesting piece.

 

IfYoureWillingtoAbandonPrinciplesConveincesocialAcceptabilityNotPrinciplesCostumeJoeConchaTheHilInspirationlMHProNews

 

So Sayeth Buffett – About Investing, and About Politics…

Here are more bullets from the same read-hot, and ‘trending’ CNBC piece.

  • For example, Buffett and his Berkshire Hathaway right hand man Charlie Munger, “disagree on a few things,” Buffett told CNBC in 2018, and that’s often been helpful.

 

  • Charlie, he’s given me a lot of good advice over time,” Buffett told CNBC in a 2016 interview. “And, I may hate to take it to a certain degree, but sometimes — but my decisions have been better. I’ve lived a better life because of Charlie.”

 

  • Billionaire Ray Dalio also thinks listening to those who disagree with you is essential. It’s a hallmark of the culture that Dalio has created at his hedge fund, Bridgewater Associates, which he calls “radical transparency.”

 

  • I just wanted to see things through [employees’] eyes and to have them see things through my eyes so that together we could hash things out to discover what’s true,” Dalio said.

 

  • Billionaire tech entrepreneur Peter Thiel also likes to ask a similar questionto Buffett’s when interviewing job candidates: “What important truth do very few people agree with you on?”

 

 

  • The question is more difficult to answer than you might think, Thiel writes in his book, “Zero to One,” as it requires candidates to show both creative thinking skills as well as the courage to voice an unpopular opinion.

 

  • It’s intellectually difficult because the knowledge that everyone is taught in school is by definition agreed upon,” according to Thiel. “And, it’s psychologically difficult because anyone trying to answer must say something she knows to be unpopular.”

 

  • Meanwhile, Buffett identifies Vermont Senator Bernie Sanders as one presidential candidate who would not be afraid to answer Buffett’s question about unpopular views he holds. Buffett tells Yahoo Finance that Sanders’ followers see him as “authentic,” adding: “if you asked him you what he was for, that most people might be against, he would tell you.”

 

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It is the contrarians who can earn the outsized rewards, not those who run with the pack. We ask the contrarian questions on MHProNews, through the lens of industry pros, not as mere ivory tower observers.

 

There are many questions and topics we’d like to ask Warren Buffett about.  Some of them are linked further below in the related reports, which follows the byline, offers, and disclosures.

Buffett postures being this folksy billionaire titan who loves Democrats, and who says he wants hire taxes.  Really?

  • Then why doesn’t he just write a big check to the U.S. Treasury? 
  • Or instead of asking the federal government to do stuff for the common man and woman, why is he allowing business practices in manufactured housing that seems to go against those principles he claims to espouse? 
  • Why didn’t Clayton Homes and MHI exert influence in Bryan, where their city council just voted against allowing manufactured homes where they were previously allowed to be placed?

 

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Whistleblower Spotlights Tech Giants Threat to American Business, Left & Right Politicos React

September 4th, 2017 Comments off
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Featured image credit, Ewoow.

Google, Amazon and Facebook were platforms that could become tools “to snuff out competition,” Senator Elizabeth Warren (D-MA) warned during a keynote speech at a New America Foundation, Open Markets event in 2016.

Voices on the political and economic left and right share her concerns.

Anyone who loves markets knows that for markets to work, there has to be competition. But today, in America, competition is dying. Consolidation and concentration are on the rise in sector after sector. Concentration threatens our markets, threatens our economy, and threatens our democracy.”

Every one of those bullets in her speech have been spotlighted in recent weeks on the Daily Business News, though not always in ways that the senator may have had in mind. Warren’s full speech is available here for download.

Along with the rest of the population, tens of thousands of manufactured housing professionals use Google.  Many industry pros use their pay-per-click, and other marketing and tech services too.  Google’s dominance in search is an issue that touches almost everyone who is “wired.”

Threat Perceived by Both Political Left and Right 

That warning from Senator Warren’s speech was made a year ago, per Business Insider.

Now, the realities behind her warning may becoming more obvious to citizens and leaders across the spectrum, as will be reflected in this report.

Google’s Massive Anti-Trust Fine

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Image credit, New America Foundation. Warren’s full speech is available here for download.

In June, Google was fined a record-breaking $2.7 billion in a European Union (EU) anti-trust ruling that determined that they unfairly favored their own products over their rivals, per the New York Times.

In Europe, companies must compete on the merits regardless if they are European or not,” Margrethe Vestager, the European Union’s antitrust chief said recently. “What Google has done is illegal under E.U. antitrust rules.”

Hours later, an article appeared on the New America Foundation’s website, praising the EU for standing up to Google on this matter.

The New America Foundation is a public policy think-tank. It has received over $21 million from Google, Eric Schmidt – the executive chairman of Alphabet, parent company of Google – and the Schmidt family foundation, since 1999.

Until 2016, Schmidt was also the chairman of New America Foundation.

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Eric Schmidt, executive chairman of Alphabet, Google’s parent company. Image credit, Marketing Directo.

Not long after the article was posted, New America heard from Schmidt.  He told the group’s president, Ann-Marie Slaughter, that he disagreed with the article.

For a brief time, the article was removed from the organization’s website.

However, it was back up only hours later. New America says it was due to “an unintentional internal issue,” not because of the disagreement with Google’s Schmidt.

Just How Much Can Tech Giants Like Google Influence?

I’ve been there for 15 years,” Barry Lynn told the Guardian. “And for 14 everything was great. In the last year or so it has got more difficult. And from every piece of evidence that we are seeing that has to do with pressure from Google.”

Until recently, Lynn ran Open Markets, which was a New America Foundation initiative.  That Open Markets’ research has led to liberal, moderates and conservative criticism of tech giants – like Google – who are dominating their respect parts of a given market.

That research may have cost Lynn – and the entire Open Markets team, consisting of both full-time employees and volunteers – their place at New America.

I criticized Google. It got me fired. That’s how corporate power works,” Lynn titled an article he contributed to the Washington Post.

Does that kind of corporate power reveal itself in manufactured housing? Certainly, it does from the prism of Google, Facebook and social media.  But are there other ways that such corporate power is revealed?  A previous Regulation Nation Daily Business News report explored that question.

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New America

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Anne-Marie Slaughter, president of New America Foundation. Image credit, New America Foundation.

Days after Anne-Marie Slaughter, president of New America Foundation, got complaints from Schmidt, she wrote “the time has come for Open Markets and New America to part ways,” in an e-mail to Lynn, per the New York Times.

She also made a point to state that the decision was “in no way based on the content of your work.”  But Lynn believes otherwise.

We are in the process of trying to expand our relationship with Google on some absolutely key points,” Ms. Slaughter wrote in email to Mr. Lynn, urging him to “just THINK about how you are imperiling funding for others.”

The official reason for parting ways with Open Markets, is because of “imperiling the institution as a whole.”

Lynn believes that New America was afraid of losing the funding from Google, one of their biggest backers.

Google is very aggressive in throwing its money around Washington and Brussels, and then pulling the strings,” Lynn said. “People are so afraid of Google now.”

Google is a very sophisticated team of people. They know how to spend their money and wield their influence in ways that usually get them what they want,” Lynn said.

In terms of researchers, the danger is that research and work writing about Google, about platform monopoly in general, work that should be be doing for the good of the American public will not be done.”

Google’s Influence Over Public Opinion, and ELS’ Sam Zell’s ‘Math’

The Daily Business News recently reported on how ways that companies like Google, Facebook and Apple – among others – can influence public opinion.

But also important to manufactured housing professionals are how allegedly monopolistic corporate power exerts influence over the Manufactured Housing Institute (MHI), and through that body, to almost every facet of the industry.

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In a previous, and regulation/monopoly related Daily Business News report, ELS’ same Zell laid out the facts how regulations harm smaller businesses, which results in consolidation. Consolidation leads to monopoly. To see that report, click the image above or the link here.

 

  • ELS Chair Sam Zell,
  • MHI Vice President Jenny Hodge
  • and others inside and outside of manufactured housing have made written allegations and/or video statements that lead some to a compelling and troubling conclusion. Heavy regulations force small businesses, out of business, and into the hands of consolidators.

Over time, those consolidators can become monopolies. Consider the graphic further below, produced by Cavco Industries.

Cavco is lead by Joe Stegmayer.  A 2003 article in Forbes revealed concerns by some Clayton Homes stockholders over the then pending acquisition by Buffett is this quote. “I’m perplexed,” said Stegmayer, a former Clayton division president. “Jim Clayton is not one to be scared by down cycles.” 

Consider too this quote from the same Forbes article, 

The mobile home [sic] industry has been in a four-year funk following a period of irrational exuberance and overexpansion in the 1990s. The business seems to be bottoming out. Why sell out now? Even with the merger premium, Clayton shares would be fetching 60% of what they traded at a year ago.”  Why, indeed?

DefiningSICinJournalismDailyBusinessNewsMHProNews-comAnd this too from that Forbes report in 2003, If Buffett captures Clayton, it will be his second dip into the [manufactured housing industry] business. He soon will be the largest shareholder in Oakwood Homes, thanks to special bankruptcy loans that moved his claim on assets ahead of other creditors’ claims.”  Those were the steps that lead to Clayton’s dominance in manufactured housing today, as is reflected by Cavco’s graphic, below. 

IndustryMarketShareClaytonCavco63%ManufacturedHousingIndustryDataResearchMarketStockReportsDailyBusinessNewsMHProNews

Clayton and Cavco, per the chart above, are now some 62% of the industry’s total production. Between the two largest firms, they control 3 out of the 4 seats on the Manufactured Housing Institute’s all-powerful executive committee. To see the Cavco report this chart comes from, click here.

Another report last week revealed Democratic lawmakers and others who are concerned over what they called a “near monopoly” of manufactured housing

So Google and tech giants are just the tip issue that policy advocates are concerned about.

Back to Google and New America’s Denials of Their Influence

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Tyra Mariani, Vice President of New America Foundation. Image credit, New America Foundation.

New America financial supporters have no influence or control over the research design, methodology, analysis or findings of New America research projects, nor do they have influence or control over the content of educational programs and communications efforts,” said Tyra Mariani, Executive Vice President of New America Foundation.

Further, a press release from New America Foundation in response to the New York Times article states that the separation from Open Markets is something that has been in the works for months.

For the past two months, we have been working with Barry Lynn to spin out Open Markets as an independent program, as we have done with other programs, to preserve his leadership, keep the program together, and maintain a strong relationship with New America,” the press release reads.

New America holds itself to high standards of transparency, diversity, and independence. We are proud of the work we do and the values we uphold.”

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New America Foundation logo. Image credit, LinkTank.

New America Foundation also made the e-mails to Lynn available to the public for transparency – but only Slaughter’s end of the conversation was provided. The e-mails are available for download here.

Google has also released a statement on the matter, per the New York Times article.

We don’t agree with every group 100 percent of the time, and while we sometimes respectfully disagree, we respect each group’s independence, personnel decisions and policy perspectives,” said Riva Sciuto, a Google spokeswoman.

How Big of a Threat do these Tech Giants Pose?

The claims that Lynn is making against New America Foundation, and Google are ominous. They aren’t to be ignored, say policy advocates on the left, center and the right.  For an example beyond Senator Warren’s concerns that those giants could crush competition from smaller businesses, was a more recent voice from the right that raise the same issue of monopoly.

Now former White House chief strategist Steve Bannon proposed that companies like Google, Facebook, and Amazon should all be treated and regulated as monopolies.

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Image credits are as shown, text and collage credits, MHProNews.com.  Note our recent report that Harvard/MIT has after extensive study determined that Bannon and Breitbart are not racist or “alt right.” See that report, linked here.

Open Markets and Lynn are exposing these issues through their research and publicized claims.

Google, and Other Monopolies Impact on Manufactured Housing

There are two ways that the challenge of monopoly being raised impacts almost everyone in manufactured housing.

The first is that Google is picking winners and losers billions of times daily in their search results.

While SEO (Search Engine Optimization) was and is important, many are ‘buying their way’ to the top of page on results.  That creates more revenue for Google, and tilts the playing field towards those who pay more money to Google. In an industry such as manufactured housing, that means that the larger the company, the more likely they are to be buying traffic, through Google, Facebook or others.

The second impact is perhaps only modestly more subtle.

ManufacturedHousingInstituteMHIMapArlingtonVA1655NFortMyerDr#200ArlingtonVAAcrossWashingtonDCDailyBusinessNewsMHProNews

MHI’s location at 1655 N Fort Myer Dr. #200, Arlington, VA 22209 – across the Potomac River from Washington, D.C.

MHI claims to represent all aspects of manufactured housing, as the collage graphic from their website below demonstrates.  So when MHI addresses – or fails to address – an issue, it can tend to spillover onto smaller entities that may not have the same ability to reply to public concerns. 

That pattern has been demonstrated many times in recent years.  Some examples are: 

For independent companies in the manufactured home industry, such patterns can lead to the “worst of all worlds,” as MHARR said recently in a report.  MHProNews has published that organization’s concerns for several years, as MHARR spotlights ways MHI agenda impacts independent businesses.  

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So be it Google, tech giants, MH industry lending or other forces within manufactured housing itself, professionals experience the various ways potential monopolies can impact smaller businesses.

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Several left-of-center news media, Democratic lawmakers and non-profit groups are apparently converging around a narrative that Clayton Homes, Vanderbilt Mortgage, and 21st Mortgage are exercising monopolistic influence over the industry, through their domination of the Manufactured Housing Institute (MHI). See that report linked here, or by clicking the image above. George Allen, a generally right of center blogger and part-time defender of MHI, has called MHI an “oligarchy,” which he defined as power in the hands of the few. Find Allen’s and other industry professional’s comments, linked here.

As the recent report – found in the linked image above – documents how Democratic lawmakers and others are accusing Berkshire-Hathaway and their units of being a “near monopoly.”  The Daily Business News has tracked the steady pattern of industry “consolidation” by Clayton, and to a lesser extent, number two producer, Cavco Industries. But that consolidation is happening beyond production, to other parts of the industry too. 

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Under-reported until last week is the true extent of Warren Buffett’s Berkshire Hathaway’s divisions lending domination. Clayton Homes, Vanderbilt Mortgage and Finance, and 21st Mortgage and Finance are all well known.

But Wells Fargo is a top 5 manufactured home industry lender too, which Buffett’s Berkshire has a large stake.

So Berkshire’s brands dominance in manufactured home lending is larger than many may have previously believed.  Did their dominance influence how MHI approached the Duty to Serve issue?

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While MHI’s SVP Lesli Gooch has denied the charge, Doug Ryan at CFED, and long time MHI member, George Allen, are among those who’ve raised the issue of monopolistic practices by MHI. Soheyla Kovach approaches this from a fresh and unique perspective, as her report and analysis linked below proves.

Lesli Gooch, Sr. VP at MHI pushed back against CFED/Prosperity Now manufactured housing pointman Doug Ryan’s claim that MHI’s Berkshire units are a monopoly.  While a legal determination would be needed for that allegation, the quiet – or periodically vocal and visible – debate on MH Industry concerns over monopoly and how it impacts independent businesses in manufactured housing will rage on.

Back To Google…and “Citizens Against Monopoly”

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Image credit, Pro Market.

These effects are in so many corners of the political economy,” said Lynn.

The Open Markets team will stay together and continue to research and report on the growing threat of monopoly by tech giants under a new name, that has yet to be determined.

In the meantime, they have launched a website called Citizens Against Monopoly, which accuses Google of “trying to censor journalists and researchers who fight dangerous monopolies.”

This concentration affects our economic well-being.  It’s what explains why, for example, the percentage of Americans who own their own businesses has been falling for the last generation.  As more and more of the economy become sown up by monopolistic corporations, there are fewer and fewer opportunities for entrepreneurship,” Lynn wrote in his Washington Times article. ## (News, analysis.)

(Editor’s note: The EU has already decided that Google has violated their anti-trust laws. The concerns and allegations noted above in Julia Granowicz thoughtful report spotlights a variety of voices, which span the political and economic spectrum.  They serve as a reminder to this question.  Does MHI/key members of theirs violate RICO, or anti-trust policies? “We Provide, You Decide.”   ©

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RICO Act graphic, credit YouTube.  Click here or the image above to see that special report.

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