<!-- Begin meta tags generated by ORblogs --> </meta name="keywords" content="progressive, liberal, politics, government, edit, language, grammar, accuracy, honesty, clarity, world, news, media" /> </> <!-- End meta tags generated by ORblogs -->> Editor at Large: Lay was bad, but Gates and Buffett are worse

Monday, July 10, 2006

Lay was bad, but Gates and Buffett are worse


Ken Lay was a rotten potato, but he was a relatively small rotten potato, compared to Bill Gates and Warren Buffett. Lay allegedly bilked Enron employees and customers out of $43.5 million, but Gates and Buffett are worth $50 BILLION and $44 BILLION respectively. How did they "earn" all that money?

Buffett and Gates may not have broken any laws (although the Clinton-era Justice Department believed Gates had cheated millions of Americans by violating anti-trust laws), but their billions may be just as ethically wrong as Lay's misbegotten millions. As columnist Ted Rall says, "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. Gates scammed his billions overcharging his customers and underpaying his employees. Buffett profited by investing in corporations that downsized, exploited, and impoverished their workers.

And now we're supposed to be impressed that Buffett has given $37 billion - about 85 percent of his net worth - to Bill Gates' foundation. Why? Let's take a look at where some of the Gates Foundation money has gone recently:

$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
$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," Rall says, "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 wondering whether L.A. 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."

The average member of the Forbes 400 list of the richest Americans has seen his or her income rise 3.5 times - from $800 million (adjusted to 2006 dollars) to $2.8 billion - in the past 20 years. Meanwhile, real income for more than half the population hasn't increased at all.

To his credit, Buffett acknowledges this disparity. "What has gone on in this country in recent years is a huge benefit to the very rich and not much relief to those below," he told Fortune magazine in 2005. But his philanthropy, however generous, won't slow our slide into Third Worlddom, and it won't help the people he exploited while accumulating all that wealth. And, as Rall points out, such philanthropy is more than a little disingenuous:

"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."

www.rall.com

14 Comments:

Blogger crallspace said...

Eat the rich... there's only one thing that they're good for.

10:51 AM  
Anonymous Anonymous said...

Huh... so you hate them if they make money, and you hate them if they give it away. Nobody with money can win, eh?

10:58 AM  
Blogger exigent said...

I've agreed with and enjoyed all your previous blogs, but this one doesnt really ring true for me.
Sure our country was founded to cater to the elite and that has never changed. We are a consumer driven economy, and these guys did what they could within the law to attribute to their success. I dont see how they exploit their employees, or underpay them as well. Microsoft offers compeitive wages and benefits. Sure other people would do things differently, like the guys who run Google, but thats their choice. If I was Bill Gates the only thing I would do differently is give moreback to those who need it the most.

This isnt a matter of having your tv stolen, then subsequently given to charity, since nothing was stolen.

Keep up the great blogs.

11:57 AM  
Blogger chris farrell said...

Gates provided a product that revolutionized business productivity. People didn't have to buy it if they didn't want to. It was a bit of a monopoly, but it was also something new: the ability to do many things that couldn't be done before.
Lay, on the other hand, didn't provide anything to anybody.

6:23 PM  
Anonymous Terry said...

Good post but you miss the point somewhat. Buffett gave the bulk of his fortune to the Bill and Melinda Gates Foundation which funds disease eradication and educational reform.

It's the latter that I'm concerned with.
I wrote about it on my blog here

6:53 PM  
Blogger Editor at Large said...

Crall: Good solution, but if eating rich foods gives you gout, what would eating rich people do to you?

Anonymous: The problem is, mega-rich people like Gates and Buffet have taken money from millions of people and are giving it back to only a select few - the few THEY deem worthy. Shouldn't we all get to decide where our money goes?

Exigent: Thanks for the kind words and thoughtful comments. As avid Macintosh adherents, we admit to a bit of a bias against Microsoft that extends beyond Gates' fortune. It just strikes us as extraordinary that someone can amass $50 billion before age 50 by selling products that are ugly and don't work right. Something is awry there, besides consumers' tastes.

Chris: Yes, Gates provided an inferior product that exploited a manufactured need, and no, people didn't have to buy it. But you could say the same thing about Ken Lay. He provided a product (energy) that no one had to buy. The only difference we see between Gates and Lay is that Gates has taken spectacular advantage of other people's innovations and consumer ignorance, while Lay merely lied to his customers and employees about Enron's fortunes (something Gates has never had to do).

Terry: Excellent points in your post about the effects of the Gates Foundation on public education. Thank you!

9:53 AM  
Blogger chris farrell said...

That's not really fair. Gates did use some innovations of other people, but he was also a good programmer and business leader. He provided a product that people needed. He tried to turn it into a monopoly and corner the market, but that why we have the government around-to regulate and prevent monopolies. Are you actually trying to argue that there was no need for the personal computer?
Energy was already around before Lay and his energy-trading schemes. As you know, Enron was responsible for ripping people off in California due to artificial shortages created by Enron itself. After that, they went bankrupt and all the little people lost their pensions. On the other hand, Microsoft has enriched many people. Sure, Gates has too much money, but now he's doing the right thing and giving it away. I'm totally in favor of taxing the rich and the estate tax, but there also has to be the incentive to innovate. Gates was an innovator. Lay, on the other hand, was a crook.
"Inferior product" compared to what? People didn't have to buy it. Pricewise and function-wise, it was the best product available. You're probably using Windows right now.

11:43 AM  
Blogger Editor at Large said...

Chris: You apparently didn't notice our confession (above) that we're diehard Mac users. No, we're not arguing that the personal computer is unnecessary (although such an argument is completely plausible), but that Gates' DOS, Windows, Office, etc. are inferior to the equivalent Apple software, and that, therefore, Gates owes his ridiculous wealth to the intentional and systematic hoodwinking of millions upon millions of otherwise innocent customers. If you happen to be one of them, our sincere condolences.

2:31 PM  
Blogger chris farrell said...

I really don't care what kind of computer you use. I thought we were talking about Gates and whether he did anything worth doing.

11:29 PM  
Blogger chris farrell said...

Millions of people went out and thought they were buying, say, a loaf of bread, but then they got home and found out that somehow the nefarious Gates had tricked them into buying Windows. They were furious but there was nothing they could do, so they installed the software, and Gates, in his dark castle, cackled and scuttled gleefully about.

11:49 PM  
Blogger exigent said...

It just seems that this is turning into a witch hunt. There are so many companies who are way less ethical than Microsoft.

What about Phillip Morris?

What about the Ford Explorer? It is the most unsafe SUV on the road and most likely to roll over in the event of an accident, but Ford wont do anything about it because they are the #1 selling SUV in the world (why??). They can fix it and make it more stable? But why? People buy them regardless...

What about McDonalds and all the other fast food places that knowingly sell poison?

In the grand scheme, Bill Gates himself is a Lesser evil. Just to think something is fishy because of some early brilliant tactical maneuvers. He knew that PC's would be everywhere, in the home, at school, at the office...if he didnt do that, it would be IBM who are the victims of this blog, right? Someone would own the liscensing to all this software, right?

1:51 AM  
Blogger Editor at Large said...

Chris and Exigent: So Bill Gates is a genius who deserves his enormous wealth because...

...no one was forced to buy his inferior products
...no one was forced to use his inferior products
...other companies sell much worse products
...if he hadn't done it, someone else would have
and
...his wealth is a natural and laudable byproduct of his brilliance, combined with good old American free-market capitalism, which is the fairest, most egalitarian economic system on earth.

Correct?

If so, you're in good company, because a majority of Americans think just like you do. Which means you win!

11:13 AM  
Blogger chris farrell said...

I never said any of that stuff. I don't think it is worth my time to argue with you.

3:42 PM  
Anonymous Editor at Large said...

We think you're on to something there, Chris.

6:11 PM  

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