Thursday, March 23, 2017

Donal Mahoney writes

Eight Men Who Are Doing Quite Well

A notice appeared in the paper recently with the names and faces of eight men who have a combined wealth of $426 billion. According to Oxfam International, in 2015 this would have equaled the amount of wealth held by half the world’s population, the poorest half.  

Oxfam International is a confederation of charitable organizations in 90 countries seeking to stop the injustices that cause global poverty. They have been tracking wealth and poverty in the world for a long time. 

It’s remarkable that six of the eight men are Americans: Jeff Bezos, Michael Bloomberg, Warren Buffett, Larry Ellison, Mark Zuckerberg and William Gates.  Only Carlos Slim, the Mexican billionaire, and Amancia Ortega, the Spaniard, are from other countries. 

Oxfam blames what it calls this "obscene wealth” on laws that have shifted the tax burden form the wealthy to the middle class.  

Supposedly this concentration of wealth has grown a great deal since Ronald Reagan's administration.  President Donald Trump has said that he supports an additional tax cut of 15% for billionaires.  Some say this might result in an even smaller middle class although the dynamics of the connection are not entirely clear to the average layman. But many people would probably agree the six wealthiest Americans don’t seem to be in need of any additional tax breaks.

According to Oxfam, America is not the only nation where the wealthy seem to be living quite well, thanks to the failure to collect proportionate taxes. 

In Africa, Oxfam says that $15 billion dollars is hidden from tax collectors, quite a sum on a poor continent. Critics say that the $15 billion, if collected, could bring health care to four million residents in Africa and put a teacher in every African classroom whatever number of classrooms that might be.

In Europe, says Oxfam, Greece and Italy lead the way in citizens avoiding taxes. Both nations are enduring difficult times. Some critics maintain that uncollected taxes if collected would bring relief to these overburdened economies. 

Failure to collect taxes, according to Oxfam, endangers the European Economic Community. Germany is being asked to fill the gap and Germans are not happy about that and perhaps understandably so. And the current situation will not improve if Greece renounces its debt and firms across the world, long-suffering creditors in waiting, no longer have anything to wait for.

Meanwhile, in America, concern grows about what some people call “tax equity,” meaning the need for new laws to make the rich pay their “fair share,” whatever that might be. It is admittedly difficult to arrive at a “fair-share” percentage with economists differing on the amount.

Similar concern grows over the need to raise the minimum wage to a living wage whatever a living wage today in America might actually be. 

Minimum wage workers are lobbying hard for $15.00 an hour. Whether that would be a living wage or not is debated. Whether that amount should be enacted nationally or not is, of course, debated as well. 

But proponents of raising taxes on the rich and paying a higher minimum wage say that if something isn’t done to solve these problems, poverty will continue to grow and people will continue to suffer. 

Back in the early part of the 20th century, Henry Ford was asked why he was paying employees $5.00 a day and he is said to have responded, “Somebody has to buy this stuff,” meaning of course his automobiles. 

Today, if too many Americans max out their credit cards and have little cash in their pockets, who is going to take advantage of the sales at Walmart? Who is going to be able to buy enough of the products to make the economy grow?

These are very difficult problems but it seems obvious that something isn’t right if eight men, six of them in the United States, have a combined wealth greater than half the people in the world. 

And in the United States it doesn’t seem that a step in the right direction would be to reduce the taxes on our wealthiest six billionaires. Perhaps better to listen to arguments as to why their taxes should be raised and then have Congress make a decision. The bill would of course require the signature of President Trump, but who knows what he would do? He is still in the early stages of his unexpected presidency and no one can be certain what he will do in many matters of great importance.

To do nothing and remain in the status quo is to risk increasing the number of poor and the United States, like the rest of the world, obviously has enough poor people as it is. 



  1. Bill Gates (William Henry Gates III, although actually the fourth of that name in his family) is the world's richest person, with an estimated net worth of US$85.6 billion. In 1999, his wealth briefly surpassed $101 billion, causing the media to call Gates a "centibillionaire." In 2010 he s was the second wealthiest person behind Carlos Slim but regained the top position in 2013. His father was a prominent lawyer, and his mother (the daughter of a national bank president, J. W. Maxwell) served on the board of directors for First Interstate BancSystem and the United Way. When he was in the eighth grade, the Mothers Club of the Lakeside School bought a Teletype Model 33 ASR terminal and a block of computer time on a General Electric computer for the school's students, and Gates was excused from math classes to pursue his interest in programming the GE system in BASIC. After the Mothers Club donation was exhausted, he and his friend Paul Allen exploited bugs in a PDP-10 belonging to Computer Center Corporation to obtain free computer time and then, after they were caught, offered to find bugs in CCC's software in exchange for computer time. After CCC went out of business in 1970, Information Sciences, Inc. hired them to write a payroll program in Cobol, providing them computer time and royalties. At 17, Gates and Allen formed a venture, Traf-O-Data, to make traffic counters based on the Intel 8008 processor. At Harvard University he met Steve Ballmer, but remained in contact with Allen, whom he joined at Honeywell during the summer of 1974. Micro Instrumentation and Telemetry Systems (MITS) released the Altair 8800, based on the Intel 8080 CPU, the following year, and Gates and Allen saw this as the opportunity to start their own computer software company. Gates contacted the creators of the new microcomputer to inform them (falsely) that he was working on a BASIC interpreter for the platform in order to gauge MITS's interest. After being invited to demonstrate their work, Gates and Allen developed an Altair emulator that ran on a minicomputer, and then the BASIC interpreter, in a few weeks; MITS agreed to distribute the interpreter as Altair BASIC, which became popular among computer hobbyists, and hired Allen, while Gates, still a sophomore, took a leave of absence. The two friends formed a new subsidiary, Micro-Soft, which became independent of MITS in late 1976, to develop programming language software for various systems. Gates oversaw the business details but also continued to write code; in the first five years, he personally reviewed every line of code the company shipped and often rewrote parts of it until 1989. IBM approached Microsoft in 1980 to write a BASIC interpreter for its upcoming personal computer, the IBM PC. Gates suggested that IBM should negotiate a licensing deal with Digital Research (DRI) to use its CP/M operating system. After those negotiations failed, Gates made a deal with Tim Paterson of Seattle Computer Products (SCP) to become the exclusive licensing agent (and later the owner) of 86-DOS (QDOS), a system similar to CP/M that was designed to operate on hardware like the PC; after adapting it for the PC, Microsoft delivered MS-DOS to IBM in exchange for a one-time fee of $50,000, though it retained the copyright. Microsoft launched its first retail version of Microsoft Windows in 1985 and struck a deal with IBM to develop a separate operating system(OS/2).

  2. In 1987, just days before his 32nd birthday, Gates was listed as a billionaire in "Forbes" magazine's 400 Richest People in America issue, making him the world's youngest self-made billionaire. In 1994 he sold some of his Microsoft stock to create the William H. Gates Foundation, and in 2000 he and his wife combined three family foundations to create the charitable Bill & Melinda Gates Foundation to deal with global problems that are ignored by governments and other organizations; Funds for NGOs claimed in 2013 that it was the world's wealthiest charitable foundation, with assets reportedly valued at more than $34.6 billion. In 2000 he also retired as Microsoft CEO, succeeded by Ballmer, but retained his position as chairman and created the position of chief software architect for himself; in 2014 he retired as chairman but became technology advisor to the new CEO, Satya Nadella. He was the largest individual shareholder until three months later.

    Amancio Ortega Gaona is th 2nd-richest person in the world, worth $72.8 billion. The son of a railway worker, he left school at 14 and found a job working for a shirtmaker. In 1972 he founded Confecciones Goa, which sold the quilted bathrobes he hired thousands of local women organised into sewing cooperatives to make, and in 1975 he opened his first Zara store, which grew into the Inditex group (Industrias de Diseño Textil Sociedad Anónima), of which Ortega owns 59.29%, and, in addition to over 6,000 stores, includes the Zara, Massimo Dutti, Oysho, Zara Home, Kiddy's Class, Tempe, Stradivarius, Pull and Bear, and Bershka brands.

  3. Warren Buffett was the son of four-term Nebraska congressman Howard Buffett. He began working, investing, and setting up his his own small companies as a boy. He wanted to continie in business after graduating from high school, but his father forced him to go to the Wharton School of the University of Pennsylvania; he transferred after two years and graduated with a Bachelor of Science in Business Administration from the University of Nebraska–Lincoln (by which time he had acquired $9,800 in savings (about $99,000 today). He went on to a Master of Science in Economics from Columbia Business School of Columbia University and then attended the New York Institute of Finance. He sold investments for Buffett-Falk & Co., worked as a securities analyst at Graham-Newman Corporation, and then was a general partner at Buffett Partnership, Ltd., becoming a millionaire by 1962. after years of investing in a textile manufacturing firm, Berkshire Hathaway, he took over the company in 1970 and began moving it into the insurance sector; by 1985 he sold the last of its mills. Through Buffet's areful management, Berkshire became one of the most attractive investments in the US (in 1979 the company traded at at $775 per share and closed at $1,310), and Buffet one of the world's richest men (though he lived solely annual salary of $50,000 and his outside investment income). In 1990 he became a billionaire, and in 2006 he announced that he would gradually give away 85% of his Berkshire holdings to five foundations in annual gifts, with 83% going to the Bill and Melinda Gates Foundation, the largest charitable contribution in history, conditional upon the foundation's giving away each year an amount at least equal to the value of the entire previous year's gift from Buffet plus 5% of the foundation's net assets. By 2008 he was the richest person in the world, with a total net worth estimated at $62 billion, overtaking Gates, who had been number one for 13 consecutive years, but Gates regained the top position the following year, even though Berkshire rose to become the 18th largest corporation in the world. He claims that he does not carry a mobile phone or have a computer at his desk and sent only one email in his life. In 2010 Buffett, Gates, and Zuckerberg promised to donate at least half of their wealth to charity and invited other wealthy people to follow suit.

  4. Jeff Bezos (born Jeffrey Preston Jorgensen) is the 3rd richest person in the world, with an estimated net worth of US$72.8 billion as of March 2017. His mother's family were early settlers of Texas who eventually acquired a 25,000-acre (101 sq km or 39 sq mi) ranch near Cotulla. His mother's father was a regional director of the US Atomic Energy Commission in Albuquerque who retired early to the ranch. His mother married young and was only married for a year. when Jeff was four she married again, to Miguel Bezos, a Cuban immigrant who went to the US by himself at 15, worked his way through the University of Albuquerque, and worked worked as an engineer for Exxon after his marriage. Jeff graduated summa cum laude and Phi Beta Kappa from Princeton University with bachelor of science degrees in electrical engineering and computer science, then built a network for international trade for FITEL (First International Telecom, or Dàzhòng Diànxìn) a mobile phone operator in Taiwan before movinf on to Bankers Trust and the hedge fund firm D. E. Shaw & Company. After the US Suprme Court ruled that mail order companies were not required to collect sales taxes in states where they lack a physical presence, Bezos quit his job as vice president in 1994 after creating a list of 20 peoducts that could be successfully marketed onine, then narrowed the list to compact discs, computer hardware, computer software, videos, and books. Moving to Washington, he set up in his garage an online bookseller, Cadabra, but quickly changed its name to in 1995 after a lawyer misheard it as "cadaver." After working out a deal with Ingram Book (now Ingram Content Group) to get books wholesale, he was marketing them throughout the US and in at least 45 counties within two months. It took until late 2001 to make a profit, $5 million on revenues of more than $1 billion (1¢ per share), and expanded its merchandizing to cover many other kinds of products to become the world's largest online shopping retailer. As of September2016, despite several sales of his stock including two recent sales of over a million shares each, Bezos owned 80.9 million shares of Amazon stock (16.9% of all shares outstanding), with a market value of $69.3 billion. In 1998 he was one of the first investors in Google; his $250,000 investment resulted in 3.3 million shares of stock worth about $2.9 billion. In 2004 Amazon's subsidiary Lab126 began developing "Fiona" e-readers to enable users to browse, buy, download, and read e-books, newspapers, magazines and other digital media via wireless networking, but branding consultants Michael Cronan and Karin Hibma suggested "Kindle" (to light a fire) instead; the pioneering product was introduced in 2007. In 2000 Bezos secretly founded Blue Origin, an aerospace manufacturer and spaceflight services company set up to develop technologies that will enable private human access to space; its first developmental test flight was in 2015, and its first entry into space ws later in the year, when both the space capsule and its rocket booster achieved a soft landing. The first manned test flights are planned for 2017, and the start of commercial service in 2018.

  5. Mark Zuckerberg, with a personal fortune worth $58.6 billion, is the fifth richest person in the world. His father, a dentist, taught him Atari BASIC Programming in the 1990s and later hired software developer David Newman to tutor him privately. As a student at Phillips Exeter Academy he formed Intelligent Media Group and built the Synapse Media Player, which used machine learning to recognize the user's listening habits. He also created a software program ("ZuckNet") that allowed all the computers between his house and his father's residential dental office to communicate with each other, a year before AOL's Instant Messenger. Phillips Exeter had a student directory, "The Photo Address Book," which students called "The Facebook." As a sophomore at Harvard university he wrote CourseMatch, a program that allowed users to select classes based on the choices of other students and also to help them form study groups, and Facemash, that let students select the best-looking person from a choice of photos, but the university shut it down after one weekend because users overwhelmed one of the school's network switches and prevented students from accessing the internet. The following semester, in January 2004, he began writing code for a new website, "Thefacebook," which he launched frm his dormitory room in February, and then introduced the social networking platform to other elite schools such as Columbia, New York University, Stanford, Dartmouth, Cornell, Penn, Brown, and Yale. He dropped out of school to complete the project and moved to Palo Alto, California, where they leased a small house that served as an office. Over the summer, Zuckerberg met Peter Thiel, who invested in the company. Facebook expanded rapidly, reaching one billion users by 2012. In 2007 Zuckerberg announced Facebook Platform, a development platform for programmers to create social applications within Facebook, which quickly had more than 800,000 developers around the world building applications. At the 2013 TechCrunch Disrupt conference, he announced the project to provide internet access to the 5 billion people who were not connected.In 2015 he and his wife Priscilla Chanpledged to donate 99% of their Facebook shares, over the course of their lives, to the Chan Zuckerberg Initiative, a limited liability company that focused on health and education.

  6. Larry Ellison is the seventh-wealthiest person in the world, with a fortune of $51.9 billion. he was the illegitimate son of a pilot in the American United States Army Air Corps. When he contracted pneumonia at nine months his mother gave him up for adoption to her aunt and uncle, who had changed his name to Ellison to honor his point of entry into the United States, Ellis Island; he was a government employee who had made a small fortune in Chicago real estate but lost it during the Great Depression. Larry attended the University of Illinois at Urbana–Champaign but left after his second year, without taking his final exams and then the University of Chicago for one term, where he first encountered computer design. After a brief stint at Amdahl Corp. he joined Ampex Corp, where he worked on a database for the Central Iintelligence Agency, which he named "Oracle." Inspired by "A Relational Model of Data for Large Shared Data Banks" by Edgar F. Codd, in 1977 he and two partners invested of $2,000 ($1,200 of which was his) to found Software Development Laboratories (SDL), which was renamed Relational Software Inc. and then, in 1982, Oracle Systems Corp. He had wanted to develop a product that was compatible with the IBM System R database (also based on Codd's theories), but IBM refused to share the code, so Ellison's company had to develop its own. Its initial release was Oracle 2 in 1979. Although IBM dominated the mainframe relational database market, it delayed entering the market for a relational database on UNIX and Windows operating systems, thus leaving the door open for competitors like Oracle, Sybase, Informix, and Microsoft to enter the mid-range systems and microcomputers. Oracle followed an "up-front" marketing strategy in which sales people urged potential customers to buy the largest possible amount of software all at once, then booked the value of future license sales in the current quarter to increase their bonuses; this became a problem when the future sales subsequently failed to materialize. In 1990 Oracle laid off 10% of its workforce (about 400 people) because it was losing money and nearly went bankrupt. Sybase was the fastest-growing database company from 1990 to 1993, but sold the rights to its database software that ran on the Windows operating system to Microsoft Corporation (which still markets it as SQL Server), and in 1996 it merged with Powersoft, resulting in a loss of focus on its core database technology. In 1994, Informix overtook Sybase and became Oracle's most important rival, but in 1997 Informix announced a major revenue shortfall and earnings restatements, leading to the imprisonment of its CEO; IBM absorbed Informix in 2001. Oracle's main competition for new database licenses on UNIX, Linux, and Windows operating systems comes from IBM's DB2 and from Microsoft SQL Server (which only runs on Windows); IBM's DB2 still dominates the mainframe database market. In 2006 Ellison became the richest Californian. In 2010, after a bidding war withIBM and Hewlett-Packard, Oracle bought Sun Microsystems, fiving it control of the popular MySQL open source database, which Sun had acquired in 2008. In 2004 it was reportd that Ellison had donated about 1% of his estimated personal wealth to charity, but in 2010 it was reported that he was one of the 40 billionaires who signed "The Giving Pledge" initiated by Gates, Buffet, and Zuckerberg.

  7. Mike Bloomberg's net worth is estimated at US$47.5 billion, bus has donated over $1.8 billion to more than 850 charities and at least 1,400 nonprofit organizations, saying, "The best financial planning ends with bouncing the check to the undertaker." His grandparents were Russian immigrants to the US, and his father was a bookkeeper for a dairy company. He graduated from Johns Hopkins University with a Bachelor of Science degree in Electrical Engineering and then acquire an MBA from Harvard Business School. In 1973 he became a general partner at the Salomon Brothers investment bank, where he headed equity trading and systems development. When Salomon Brothers was bought by Phibro Corporation, he was laid off with $10 million worth of equity in the firm, which he used in 1981 to found Innovative Market Systems (renamed Bloomberg L.P. in 1987) to market high-quality business information such as graphs of highly specific trends; his first customer was Merrill Lynch, which investied $30 million in his company and installed 22 of its Market Master terminals, by 1990 it had installed 8,000 of them. By 2015 the company had more than 325,000 terminal subscribers worldwide. Over the years, ancillary products including Bloomberg News, Bloomberg Message, and Bloomberg Tradebook were launched. He served as mayor of New York for thre terms, from 2002 to 2014, adopting a statistical, results-based approach to city management, appointing city commissioners based on their expertise and granting them wide autonomy in their decision-making. By raising property taxes and making cuts to city agencies, he eliminated the city's $6-billion deficit.

  8. Carlos Slim Helú, a Maronite Catholic of Lebanese descent, is the 7th richest person in the world, with a net worth estimated at more than $50 billion. Slim's wealth is the equivalent of ca. 5% of Mexico's annual economic output. The son of a successful dry goods store owner, he studied civil engineering at the Universidad Nacional Autónoma de México, where he concurrently taught algebra and linear programming, and then took economics courses in Chile before becoming a stock trader in his native Mexico. In 1965 he started his own stock brokerage, Inversora Bursátil, and bought Jarritos del Sur. In year later he founded Inmobiliaria Carso. His early business interests were in the construction, soft drink, printing, real estate, bottling, and mining sectors, but he expanded into auto parts, aluminum, airlines, chemicals, tobacco, cable and wire manufacturing, paper, packaging, copper and mineral extraction, tires, cement, retail, hotels, beverage distribution, telecommunications, and financial services. In 1980 he consolidated his business interests by forming Grupo Galas, and in 1981 he acquired a majority stake in Cigarros la Tabacelera Mexicana (Cigatam), Mexico's second largest producer and marketer of cigarettes, which provided the funds for many of his later acquisitions. In concert with France Télécom and Southwestern Bell Corporation, in 1990 he bought the landline telephone company Telmex from the Mexican government, which operated 90% of Mexico's telephone lines by 2006 (his mobile telephone company, Telcel, operated almost 80% of the country's cellphones). In 1996 he split Grupo Carso into Carso Global Telecom, Grupo Carso, and Invercorporación. Slim began purchasing large stakes in a number of major US retailers such as Barnes & Noble, OfficeMax, Office Depot, Circuit City, Borders, CompUSA, and the "New York Times," and established Telmex USA; he incorporated América Telecom, which acquired stakes in foreign cellular telephone companies such as the ATL and Telecom Americas in Brazil, Techtel in Argentina, and others in Guatemala and Ecuador, and acquired the Latin American broadcast rights for the Olympic Games in Sochi in 2014 and Rion de Janeiro in 2016, as well as 30% stakes in two Mexican sccer teams (Pachuca and León). In 2005 he invested in Volaris, a Mexican airline, and established IDEAL (Impulsora del Desarrollo y el Empleo en America Latina SAB de CV, Promoter of Development and Employment in Latin America), a Mexican construction and civil engineering company primarily engaged in not-for-profit infrastructure development, which was awarded a contract to develop the Nezahualcoyotl landfill into a shopping mall, two schools, a hospital, and a park with 34 soccer fields, a baseball field, a gym with a swimming pool, and 12 tennis, basketball, and volleyball courts; in 2013 IDEAL acquired stakes in two federal prisons from Desarrolladora Homex SAB. In 2014 he took control of Telekom Austria, Austria's biggest phone carrier, his first successful business acquisition in Europe, and invested in WellAware, a Texas-based firm whose software allows oil and gas companies to track wells and pipelines remotely and collate data for making forecasts. In 2015 his investment group Control Empresarial de Capitales invested in IMatchative, a technology startup that creates proprietary behavioral profiles of hedge fund managers.


Join the conversation! What is your reaction to the post?