Gates and Buffett: 1000 Times Worse than Ken Lay
Why Enron Chief Was Better Than "Philanthropists"
by Ted Rall
www.rall.com (July 10 2006)
Bill Gates, Warren Buffett and Ken Lay - all thieves. Compared to the world's two richest men, however, Lay was small potatoes. So why are we praising them, and kicking Lay while he's down - six feet down?
Yeah, yeah, I watched the documentary ("Enron: The Smartest Guys in the Room"). Lay and his sidekick CEO Jeffrey Skilling, used bluster, lies, a bunch of fictional Excel spreadsheets and an updated Ponzi scheme to create what appeared to be the nation's seventh largest energy company. Even when the truth - that Enron had negative net assets - was about to come out, Lay continued to talk up his BS company and its fraudulently inflated stock. Shareholders, many of them employees whose retirement savings were invested entirely in Enron, believed his reports that the company's finances were solid. Meanwhile, while he lied through his teeth to thousands of men and women who would be ruined because they believed him, he secretly cashed out millions of dollars of his own.
Federal prosecutors say that Lay and Skilling illegally bilked Enron out of $183 million, including company bonuses paid during their conspiracy to pump up the company's stock and Lay's use of its line of credit to pay off millions in personal debt for such items as a $200,000 yacht for his wife Linda's 2001 birthday party. When Lay died last week of a heart attack, having been found guilty of a fraud that led to the 2001 collapse of Enron, he had been awaiting sentencing. The New York Post, noting that Texas law may protect Lay's estate from forking over the $43.5 million the Securities and Exchange Commission had sought as restitution, published one of its instant classic front pages: pictures of the deceased executive and a coffin, under the headline "Before They Put Cheato Lay's Coffin in the Grave, CHECK HE'S IN IT".
True, Lay was scum. But the "I Spit On Your Grave" act is a new phenomenon. Cruel and avaricious titans of industry typically receive the kid gloves treatment when they pass on to the Great Equities Desk. In 1989 Steven J Ross, chairman and chief executive of Time Warner, paid himself a record $78.2 million - more than 9,000 times the average salary of his employees, thousands of whom he had cheerfully laid off the year before. When some cynics mentioned that Ross' victims might be jumping for joy at the news of his 1992 death from prostate cancer, they were universally and loudly denounced as rude and unfeeling.
Lay stole $43.5 million. Ross overpaid himself at least $78.2 million (worth $121.9 million today). Now consider investor Warren Buffett and Microsoft chairman Bill Gates, worth $44 billion and $50 billion, respectively, according to Forbes. Each one has accumulated one thousand times more cash than Ken "#1 Bush Campaign Donor" Lay. But we're supposed to like, and even admire, these rogues.
Buffett and Gates may not have broken any laws - although, in Gates' case, the Clinton-era Justice Department thought he'd cheated millions of American consumers by violating anti-trust laws - but it's hard to see how their billions are more ethically legit than Lay's misbegotten millions. Sorry, but "working hard" doesn't cut it. I don't care if you stay late at the office every night, work weekends and holidays, or you never go on vacation. It doesn't matter how smart, imaginative or lucky you are. It just isn't possible to earn $44 billion in a single lifetime.
Not honestly, anyway.
Gates and Buffett have created a lot of pain and misery on their way to "earning" their combined $94 billion. (Bear in mind, that's what they're worth. That doesn't include what they've spent.) Gates scammed his dough the old-fashioned way: overcharging his customers and underpaying his employees. Somewhere along the way to accumulating $50 billion, doesn't it occur to a guy that he could charge a little less than $200 for buggy, instantly obsolete, software? Or that it's time for a company-wide raise? He could even hire (gasp) unionized American workers instead of building plants in the Third World and relying on the slave labor of prison inmates!
It's harder to draw a direct line between Buffett's convoluted arbitrage machinations and the reduced incomes of thousands of other people, but anyone who has been downsized by a shareholder-terrorized managing board has experienced the impoverishing of the workers whose employers he targets.
Now we're supposed to be shocked and awed by Buffett's decision to give $37 billion - about 85 percent of his assets - to Bill Gates' foundation. "Stunning in its generosity", raved the Christian Science Monitor. "The scale of Mr. Buffett's philanthropy is matched by its good sense", chimed the Washington Post. Recent grants paid out by the Gates Foundation include $100,000 for the museum at Pearl Harbor, $241,500 "to provide sustainable public access computer hardware and software upgrades" to libraries in Los Angeles, and $21 million "to provide curriculum and support for teachers as a part of a transformation that aims to prepare ... Chicago public school students for success in post-secondary education".
Good causes all, but maintaining Pearl Harbor is one of the reasons we pay federal taxes. Why does a national war memorial need help from Gates? One can't help wonder whether Los Angeles libraries and Chicago schools might be less cash-strapped in the first place if so much of our society's wealth hadn't been monopolized by America's tiny, increasingly powerful oligarchy, rather than going to city taxpayers in the form of fair wages and affordable computers.
Factoid: the average member of the Forbes 400 list of the richest Americans has seen his income rise 3.5 times - from $800 million (adjusted to 2006 dollars) to $2.8 billion - in the last twenty years. Meanwhile, real income for more than half the population increased ... zero. Nada. Zip.
To his credit, Buffett acknowledges the rising income disparity. "What has gone on in this country in recent years is a huge benefit to the very rich and not much that relief to those below", he told Fortune in 2005. But philanthropy won't slow the United States' slide into Third Worlddom. And it doesn't help the philanthropists' victims. All things considered, a $45 million lout like Ken Lay hurts America less than a $44 billion one like Bill Gates.
Consider a burglar who boosts your TV and then, thinking better of it, donates it to an orphanage. His act of generosity beats the alternative - keeping it for himself. But you'd probably prefer that he'd returned it to you, or better yet, never stolen it at all.
_____
Ted Rall is the author of Silk Road to Ruin: Is Central Asia the New Middle East?, an analysis of America's next big foreign policy challenge.
(c)2006 uclick, LLC, An Andrews McMeel Universal company. All Rights Reserved.
http://www.uexpress.com/tedrall/
Bill Totten http://www.ashisuto.co.jp/english/index.html
by Ted Rall
www.rall.com (July 10 2006)
Bill Gates, Warren Buffett and Ken Lay - all thieves. Compared to the world's two richest men, however, Lay was small potatoes. So why are we praising them, and kicking Lay while he's down - six feet down?
Yeah, yeah, I watched the documentary ("Enron: The Smartest Guys in the Room"). Lay and his sidekick CEO Jeffrey Skilling, used bluster, lies, a bunch of fictional Excel spreadsheets and an updated Ponzi scheme to create what appeared to be the nation's seventh largest energy company. Even when the truth - that Enron had negative net assets - was about to come out, Lay continued to talk up his BS company and its fraudulently inflated stock. Shareholders, many of them employees whose retirement savings were invested entirely in Enron, believed his reports that the company's finances were solid. Meanwhile, while he lied through his teeth to thousands of men and women who would be ruined because they believed him, he secretly cashed out millions of dollars of his own.
Federal prosecutors say that Lay and Skilling illegally bilked Enron out of $183 million, including company bonuses paid during their conspiracy to pump up the company's stock and Lay's use of its line of credit to pay off millions in personal debt for such items as a $200,000 yacht for his wife Linda's 2001 birthday party. When Lay died last week of a heart attack, having been found guilty of a fraud that led to the 2001 collapse of Enron, he had been awaiting sentencing. The New York Post, noting that Texas law may protect Lay's estate from forking over the $43.5 million the Securities and Exchange Commission had sought as restitution, published one of its instant classic front pages: pictures of the deceased executive and a coffin, under the headline "Before They Put Cheato Lay's Coffin in the Grave, CHECK HE'S IN IT".
True, Lay was scum. But the "I Spit On Your Grave" act is a new phenomenon. Cruel and avaricious titans of industry typically receive the kid gloves treatment when they pass on to the Great Equities Desk. In 1989 Steven J Ross, chairman and chief executive of Time Warner, paid himself a record $78.2 million - more than 9,000 times the average salary of his employees, thousands of whom he had cheerfully laid off the year before. When some cynics mentioned that Ross' victims might be jumping for joy at the news of his 1992 death from prostate cancer, they were universally and loudly denounced as rude and unfeeling.
Lay stole $43.5 million. Ross overpaid himself at least $78.2 million (worth $121.9 million today). Now consider investor Warren Buffett and Microsoft chairman Bill Gates, worth $44 billion and $50 billion, respectively, according to Forbes. Each one has accumulated one thousand times more cash than Ken "#1 Bush Campaign Donor" Lay. But we're supposed to like, and even admire, these rogues.
Buffett and Gates may not have broken any laws - although, in Gates' case, the Clinton-era Justice Department thought he'd cheated millions of American consumers by violating anti-trust laws - but it's hard to see how their billions are more ethically legit than Lay's misbegotten millions. Sorry, but "working hard" doesn't cut it. I don't care if you stay late at the office every night, work weekends and holidays, or you never go on vacation. It doesn't matter how smart, imaginative or lucky you are. It just isn't possible to earn $44 billion in a single lifetime.
Not honestly, anyway.
Gates and Buffett have created a lot of pain and misery on their way to "earning" their combined $94 billion. (Bear in mind, that's what they're worth. That doesn't include what they've spent.) Gates scammed his dough the old-fashioned way: overcharging his customers and underpaying his employees. Somewhere along the way to accumulating $50 billion, doesn't it occur to a guy that he could charge a little less than $200 for buggy, instantly obsolete, software? Or that it's time for a company-wide raise? He could even hire (gasp) unionized American workers instead of building plants in the Third World and relying on the slave labor of prison inmates!
It's harder to draw a direct line between Buffett's convoluted arbitrage machinations and the reduced incomes of thousands of other people, but anyone who has been downsized by a shareholder-terrorized managing board has experienced the impoverishing of the workers whose employers he targets.
Now we're supposed to be shocked and awed by Buffett's decision to give $37 billion - about 85 percent of his assets - to Bill Gates' foundation. "Stunning in its generosity", raved the Christian Science Monitor. "The scale of Mr. Buffett's philanthropy is matched by its good sense", chimed the Washington Post. Recent grants paid out by the Gates Foundation include $100,000 for the museum at Pearl Harbor, $241,500 "to provide sustainable public access computer hardware and software upgrades" to libraries in Los Angeles, and $21 million "to provide curriculum and support for teachers as a part of a transformation that aims to prepare ... Chicago public school students for success in post-secondary education".
Good causes all, but maintaining Pearl Harbor is one of the reasons we pay federal taxes. Why does a national war memorial need help from Gates? One can't help wonder whether Los Angeles libraries and Chicago schools might be less cash-strapped in the first place if so much of our society's wealth hadn't been monopolized by America's tiny, increasingly powerful oligarchy, rather than going to city taxpayers in the form of fair wages and affordable computers.
Factoid: the average member of the Forbes 400 list of the richest Americans has seen his income rise 3.5 times - from $800 million (adjusted to 2006 dollars) to $2.8 billion - in the last twenty years. Meanwhile, real income for more than half the population increased ... zero. Nada. Zip.
To his credit, Buffett acknowledges the rising income disparity. "What has gone on in this country in recent years is a huge benefit to the very rich and not much that relief to those below", he told Fortune in 2005. But philanthropy won't slow the United States' slide into Third Worlddom. And it doesn't help the philanthropists' victims. All things considered, a $45 million lout like Ken Lay hurts America less than a $44 billion one like Bill Gates.
Consider a burglar who boosts your TV and then, thinking better of it, donates it to an orphanage. His act of generosity beats the alternative - keeping it for himself. But you'd probably prefer that he'd returned it to you, or better yet, never stolen it at all.
_____
Ted Rall is the author of Silk Road to Ruin: Is Central Asia the New Middle East?, an analysis of America's next big foreign policy challenge.
(c)2006 uclick, LLC, An Andrews McMeel Universal company. All Rights Reserved.
http://www.uexpress.com/tedrall/
Bill Totten http://www.ashisuto.co.jp/english/index.html
posted by Bill Totten at
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