Buffett on Buffett

Scores of reporters, columnists, and bloggers have been weighing in on Warren Buffett's subpoenaed testimony before the Financial Crisis Inquiry Commission, especially his suggestion that although Berkshire Hathaway acquired a significant share in Moody's, an agency that gave high marks to ultimately worthless mortgage-related securities, he really didn't believe much in ratings and did his own analysis.

Mr. Buffett's attitude toward the ratings business reminds me of a lucrative but potentially time-robbing job offer I received when I was turning from editing to writing. I suggested instead a part-time, home-based position of a kind that was becoming popular in some book publishing circles, and I pointed out that the company's business division was featuring works extolling the new flexible workplace. I'll never forget the only half-joking reply: "We just publish them. We don't read them."

My favorite commentary is by Mr. Buffett himself, a prophetic assessment of his own position in ratings, and the financial catastrophe that they helped make possible, in a famous remark years ago:

When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputation of the business that remains intact.