After months on the sidelines, major liberal donors including the financier George Soros are preparing to inject up to $100 million into independent groups to aid Democrats’ chances this fall. But instead of going head to head with the conservative “super PACs” and outside groups that have flooded the presidential and Congressional campaigns with negative advertising, the donors are focusing on grass-roots organizing, voter registration and Democratic turnout.
Chris Ratcliffe/Bloomberg News
The financier George Soros is expected to contribute $1 million each to a rights group and a research “super PAC.”
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The departure from the conservatives’ approach, which helped Republicans wrest control of the House in 2010, partly reflects liberal donors’ objections to the Supreme Court’s Citizens United decision, which paved the way for super PACs and unbridled campaign spending.
But in interviews, donors and strategists involved in the effort said they also did not believe they could match advertising spending by leading conservative groups like American Crossroads and Americans for Prosperity, and instead wanted to exploit what they see as the Democrats’ advantage in grass-roots organizing.
“Super PACs are critically important,” said Rob Stein, the founder of the Democracy Alliance, a group of liberal donors who will convene near Miami this week to discuss where to steer their money this year. But the liberal groups, he said, believe that local efforts and outreach through social media “can have an enormous impact in battleground states in 2012.”
In a move likely to draw in other major donors, Mr. Soros will contribute $1 million each to America Votes, a group that coordinates political activity for left-leaning environmental, abortion rights and civil rights groups, and American Bridge 21st Century, a super PAC that focuses on election-oriented research. The donations will be Mr. Soros’s first major contributions of the 2012 election cycle.
“George Soros believes the Supreme Court’s decision in Citizens United opened the floodgates to special interests’ paying for political ads,” said Michael Vachon, a spokesman for Mr. Soros. “There is no way those concerned with the public interest can compete with them. Soros has always focused his political giving on grass-roots organizing and holding conservatives accountable for the flawed policies they promote. His support of these groups is consistent with those views.”
On Monday, in an indication that he does not expect significant advertising spending from Democratic-leaning outside groups at this stage, President Obama unveiled a $25 million ad campaign against Mitt Romney, the presumptive Republican nominee.
A super PAC founded by two former Obama aides, Priorities USA Action, has struggled to raise money against better-financed conservative groups like American Crossroads, which expects to spend $300 million on the presidential, House and Senate elections.
Those difficulties stem in part from Mr. Obama’s past opposition to spending by outside groups, which has dampened donor enthusiasm despite his about-face this year. But it also reflects how major liberal donors and independent groups have focused since 2004 on creating a permanent infrastructure of liberal research and voter-outreach groups. That year, liberal groups spent more than $200 million on advertising and grass-roots activity in a failed bid to deprive President George W. Bush of a second term.
Conservative independent groups, including super PACs that can raise and spend unlimited amounts of money on election ads, dominated the advertising wars in 2010, helping Republicans make major gains in Congress, and their money has had a similar impact so far in this cycle.
“The idea that we’re going to engage in an arms race on advertising with the Republicans is not appealing to many liberal donors,” said David Brock, the founder of American Bridge 21st Century.
The advertising-oriented Democratic super PACs, including Priorities USA and two groups founded to back Democrats in Congress, remain on the list of organizations that the Democracy Alliance recommends to its members. Robert McKay, who is the chairman of the Democracy Alliance and sits on the board of Priorities USA, said the $100 million expected to be spent this year by alliance members would include some money for election ads, but would most likely favor grass-roots organizing and research groups.
“There is a bias towards funding infrastructure as it relates to the elections,” Mr. McKay said. “That means get-out-the-vote efforts” directed toward young voters, single women, black voters and Latinos, he said.
Organizations likely to be a part of the effort include Catalist, which creates voter lists for allied liberal groups; ProgressNow, a network of state-based Web sites for liberal opinion and activism; and the Latino Engagement Fund, a new group that works to register and turn out Latino voters for Democrats. Conservative independent groups are financing similar outreach to Latino voters: the American Action Network, which spent $26 million against Democratic candidates in 2010, last year unveiled the Hispanic Leadership Network, which will seek to mobilize center-right Latino voters.
Liberals outside the Democracy Alliance are also likely to make significant contributions, as are labor unions, which plan to spend up to $400 million on state, local and federal races, and advocacy groups like the Sierra Club.
Some groups will pay for both advertising and organizing. PAC+, a super PAC founded by the San Francisco philanthropist Steve Phillips, a member of the Democracy Alliance, expects to spend about $10 million on Latino voters in six states, with a heavy emphasis on Arizona, which the Obama campaign is seeking to turn into a battleground. Half of PAC+ spending will go to enrollment and half to advertising.
“You can dump 10 or 20 million in TV ads in Ohio and try to reach the persuadable swing voters there, or you can up voter turnout among Latinos in Colorado and Arizona and win that way,” Mr. Phillips said. “It’s much cheaper.”
George Soros
Founder and Chairman Open Society Institute
A global financier and philanthropist, George Soros is the founder and chair of the Open Society Institute and Soros Fund Management, LLC. Born in Budapest in 1930, he survived the Nazi occupation and fled communist Hungary in 1947 for England, where he graduated from the London School of Economics in 1952. Soros moved to the United States to work in finance, eventually creating one of the first hedge funds. By 1979 he was moved to use his wealth to help build open societies where he saw an opportunity. In 1993, he established the Open Society Institute. To date, Soros has given away nearly $7 billion to support human rights, freedom of expression, and access to public health and education in 70 countries.
Philosophy and Finance
At the London School of Economics, Soros became acquainted with the work of the philosopher Karl Popper, whose ideas on open society had a profound influence on his intellectual development. He was attracted to Popper’s critique of totalitarianism, The Open Society and Its Enemies, which maintained that societies can only flourish when they allow democratic governance, freedom of expression, a diverse range of opinion, and respect for individual rights. Later, working as a trader and analyst, he adapted Popper to develop his own "theory of reflexivity," a set of ideas that seeks to explain the relationship between thought and reality, which he used to predict, among other things, the emergence of financial bubbles. Soros began to apply his theory to investing and concluded that he had more talent for trading than for philosophy. In 1967 he helped establish an offshore investment fund; and in 1973 he set up a private investment firm that eventually evolved into the Quantum Fund, one of the first hedge funds.
Philanthropy
Soros began his philanthropy in 1979 by helping black students attend the University of Cape Town in apartheid South Africa. Soon he created a foundation in Hungary to support culture and education and the country’s transition to democracy and distributed funds to the underground solidarity movements in Eastern Europe. He founded the Central European University in 1991, a graduate institution now located in Budapest that focuses on social and political development. In 1993 Soros established the Open Society Institute, part of a family of foundations dedicated to building and strengthening vibrant and tolerant societies around the world. His visionary efforts span a remarkable range of activities in Africa, Asia, Europe, Latin America, and the United States and his foundations have a strong record of achievement in protecting human rights, advancing justice, and improving access to education and public health.
Publications
Soros’s most recent book is The Soros Lectures: At the Central European University (2010). A Chinese language edition of The Soros Lectures is published by the Hong Kong University Press. His other books include The Crash of 2008 and What it Means: The New Paradigm for Finance Markets (2009); The Age of Fallibility: Consequences of The War on Terror (2006); The Bubble of American Supremacy (2005); George Soros on Globalization (2002); Open Society: Reforming Global Capitalism (2000); The Crisis of Global Capitalism: Open Society Endangered (1998); Soros on Soros: Staying Ahead of the Curve (1995); Underwriting Democracy (1991); Opening the Soviet System (1990); and The Alchemy of Finance (1987). His essays on politics, society, and economics appear frequently in major periodicals around the world.
If nothing else, Glenn Beck probably has his top story set for tonight's show:
"There is a really remarkable, rapid shift of power and influence from the United States to China," Mr. Soros said, likening the U.S.'s decline to that of the U.K. after the Second World War.
Because global economic power is shifting, Mr. Soros said China needs to change its focus. "China has risen very rapidly by looking out for its own interests," he said. "They have now got to accept responsibility for world order and the interests of other people as well."
Mr. Soros even went so far as to say that at times China wields more power than the U.S. because of the political gridlock in Washington. "Today China has not only a more vigorous economy, but actually a better functioning government than the United States," he said, a hard statement for him to make because he spent much of his life donating to anti-communist groups in Eastern Europe.
Soros's statement is similar to the frequent China-for-day musings of columnist Tom Friedman.
On a related subject, Kay King of the Council on Foreign Relations has a new report out on the U.S. congress's impact on national security. King's critiques of congressional procedure, in particular the filibuster, won't be news to anyone who's read recent critiques of congressional dysfunction, but she makes a compelling case that because of limited public interest, congress is effectively abandoning its oversight role on national security affairs. Issues like energy, trade, and immigration are typically treated as purely domestic issues by congress, while membership on foreign affairs committees appeal only to members positioning themselves for higher office or those dependent on ethnic or business special interests.
When Congress fails to perform, national security suffers thanks to ill-considered policies, delayed or inadequate resources, and insufficient personnel. Without congressional guidance, allies and adversaries alike devalue U.S. policies because they lack the support of the American peopel that is provided through their representatives in Congress.
King provides a number of ideas for reform which will hopefully be a bit more palatable to U.S. sensibilities than taking cues on good governance from Beijing.
Hungarian-American billionaire George Soros is sometimes caricatured by his opponents as a left-wing Bond villain, but cut through the hyperbole and there are good reasons why Soros truly is far more threatening than just another wealthy liberal.
Soros isn't merely content with spending money to work within the system to elect Democrats, promote liberal policies, and otherwise shape the public debate.
He has spent millions of dollars to change the very machinery of our democracy. In a center-right country, it's very hard to elect liberal leaders and enact left-wing policies. So Soros wants less democracy and in some cases wants to do away with elections altogether.
According to an American Justice Partnership report, Soros' Open Society Institute has "funneled at least $45.4 million into a highly coordinated campaign to reshape the judiciary and fundamentally change the way judges are chosen in many American states."
Soros' millions are funding Justice at Stake, whose explicit goal is to do away with the election of state judges. JAS wants a "merit system" that would empower "nonpartisan" panels selected by state officials to make judicial appointments.
These panels would likely be dominated by the state's bar association and legal interests. A similar system for appointing judges is already in place in Missouri, where the judicial selection panel consists of the state Supreme Court's chief justice, three lawyers chosen by the Missouri Bar and three gubernatorial appointees.
Soros' OSI argues such a system is necessary because "in recent years big money and special interest political pressure have become a staple of judicial campaigns, raising questions about the integrity of U.S. courts."
The newly funded Soros program "seeks to counter the influence of political and special interest groups."
Of course, if you're worried about special interests dominating judicial elections, the OSI/JAS alternative is even worse. That's because state bar associations and legal groups are dominated by trial lawyers. Lawyers and law firms are the seventh biggest political donors of "all time," according to Opensecrets.org, and dominate state politics in parts of the country.
The judicial system should maintain a necessary degree of impartiality, but America's founders certainly didn't intend for judges to be unmoored from democracy. About 95 percent of America's civil disputes end up in state courts. That's an enormous amount of power, which needs checks and balances. There's a reason why 87 percent of America's judges are elected.
There are many signs that Americans are increasingly wary of activist judges imposing liberal policies against the public will. On Nov. 2, voters in Iowa for the first time ever ousted three sitting state Supreme Court judges. All three had voted to legalize gay marriage. And Nevada voters rejected a statewide initiative to implement a judicial selection system like that sought by Soros' JAS.
It also turns out Missouri's vaunted "merit system," which was the template for the OSI's initiative, actually increases politicization. For 70 years, the Show Me State's judicial selection process was conducted behind closed doors.
The result? A 2009 Missouri Law Review article found 87 percent of judicial nominees in Missouri had donated money primarily to Democrats, in a state where the electorate is near evenly divided between the two parties.
After a grass-roots backlash, Missouri changed the rules in October. Residents can now observe the state panel's interviews of prospective judges, nominate potential candidates and determine the panel's votes.
Soros is lobbying to preserve the courts as an avenue for enacting liberal policies that won't be supported by popular will. If Soros really cared about corrupt judicial elections, he would lobby for more transparency and more democracy, not less.
Given all the asset classes he can choose from, and influence his opinion has on the global capital markets, George Soros is still active in investing in stocks. GuruFocus shows that he has a portfolio of $3.31 billion distributed among 823 stocks as of June 30, 2010, 239 of them are new positions. Diversified as he is, it is hard to imagine why he wants to take a significant position in any stock. Concentration investing is not his couple of tea.
But concentration is exactly what he is doing with a number of stocks (see the list here). Not only that, Soros has been accumulating shares of these stocks since the end of 2Q10.
GuruFocus tracks Soros’s stock portfolio and here are the transactions that Soros reported recently:
NPR’s defenders receiving money from the same Soros-backed organization
By Jeff Winkler - The Daily Caller 3:20 AM 11/09/2010
After NPR fired Juan Williams in late October for comments he made about Muslims on Fox News’ “O’Reilly Factor,” NPR saw supporters come out of the woodwork to decry right-leaning calls for the radio company to be stripped of government financial support. Interestingly, many of those who voiced their opinion that NPR should keep its government provided cash happen to receive funds from the same source: liberal financier George Soros and his Open Society Institute.
On Sunday, NPR CEO and President Vivian Schiller said she takes the threats to defund NPR “very seriously.” So too, it seems, does Soros, who gave NPR a $1.8 million donation in October and whose Open Society Institute has given money to many of the organizations that have offered a highly-publicized defense of the radio giant.
In a piece on the Huffington Post, Free Press Campaign Director Timothy Karr lambasted the right’s “shenanigans” and said their “gamble here is that their efforts to paint public broadcasting as the voice of encroaching socialism will fire up the passions of some Americans.”
The Free Press’ own passions are fired up by $350,000 over two years from the Open Society Institute.
The New America Foundation also came to NPR’s defense amid calls for the radio station’s defunding. According to the Open Society Institute’s website, the New American Foundation is receiving $200,000 from the Soros project over a two year period.
The New America Foundation founding chairman and the Atlantic magazine’s senior editor James Fallows offered an impassioned defense of NPR saying, “whatever its failings, [NPR is] one of the few current inheritors of the tradition of the ambitious, first-rate news organization.” Fallows also noted the number of bureaus NPR has around the world, a rarity in the journalism world today.
A nearly identical defense of “why we need NPR now more than ever” was offered by New American Foundation fellow and Daily Beast contributor Peter Beinart, who also managed to mock those objecting to NPR’s support from the government for their parochialism and their complaints that NPR doesn’t compete in the free market.
Who else came to NPR’s defense after critics called for radio company’s defunding for dropping Williams? New America Media had a spirited take on the issue, saying NPR should have canned the long-time contributor years ago. NAM also says — in its “about” section — that it wishes to thank the generous contributions of several groups, including the Open Society Institute.
In an e-mail response to The Daily Caller, Beinart said, “I know virtually nothing about which foundations fund New America and even less about which ones fund NPR. I’ve been listening to — and admiring– NPR’s foreign coverage since I was a kid so there’s not much mystery as to why I would defend them.”
On Thursday, NPR’s board of directors will hold its regular meeting, in which Williams’ termination will be finalized. Based on the overwhelming critiques of Schiller’s response to Williams — even from those taking money from the same pool as NPR — it’s not clear yet if she will meet a similar fate in the near future.
George Soros uses a vast network of special interest groups and
non-governmental organizations, in the United States and abroad, to
support his global objective — a one-world government.
Open borders are a stepping stone in his efforts to put into action his
open-society philosophy. What form will a one-world government take? Not
surprisingly it will be a billionaire oligarchy. What sort of
billionaire? To begin with, try one George Soros.
Soros provided the following definition of an open society in his
article, "The Capitalist Threat," in the February 1997 "Atlantic
Monthly": "Societies derive their cohesion from shared values . . .
religion, history, and tradition. When a society does not have
boundaries where are the shared values to be found? . . . the concept of
the open society itself."
In the intervening years, his more-than-generous financial support of a
society without boundaries has contributed to the current open-borders
immigration crisis being experienced by the United States, his adopted
homeland.
The Open Society Institute is the cornerstone for the Soros Foundations
Network, a group of Soros-funded organizations in more than 50
countries, which promote open-society concepts by influencing
governmental policies.
The various branches and paid instrumentalities of the network include
Democracy Alliance, MoveOn.org, America Coming Together, America Votes,
The Center for American Progress, and other leftist front organizations,
which advocate open borders for the United States — not for other
nations but for the United States. These Soros-funded groups finance his
camp followers, among them the Democratic Party, the National
Organization of Women, abortion advocacy groups, various environmental
groups, and last but not least, the increasingly powerful immigration
special interest groups.
Soros to Soar
Born in Hungary in 1930 as Gyorgy Schwartz, he provides most of his own
biographical data, which is thus open to verification. The family
changed its name in 1936 to Soros, which in Hungarian means "successor"
and in Esperanto means "to soar." His father was a devotee of Esperanto,
a concocted one-world language introduced in 1887 by Ludwik Zamenhof, a
Polish doctor. The Esperanto movement, based on Indo-European
languages, continues to have followers today. The Soros name change was
an effort to protect the Jewish family from the rise of fascist rulers.
Young George Soros, a second-generation Esperanto, survived the fascists
and then the communists and in 1946 defected to the West, while
attending an Esperanto youth congress abroad.
He emigrated to England, where he enrolled in the London School of
Economics. There, he came under the tutelage of Austrian-English
philosopher of science, Karl Popper. After graduating in 1952, George
Soros came to the United States in 1956 and went to work on Wall Street.
Today his fortune is estimated at $7-11 billion. One of his companies,
Quantum Fund, is based outside the United States, beyond U.S. government
supervision, as apparently is most of the Soros fortune — off-shore for
tax purposes.
Soros still quotes his mentor Karl Popper, who set forth a framework for
governments in his book, "The Open Society and Its Enemies." Soros
acknowledges that Popper's concept owes much to French philosopher Henri
Louis Bergson (1859-1941). Popper, expanding on Bergson, developed
"fallibilism," a theory that no entity possesses the ultimate truth, and
to claim otherwise leads to repression or a closed society.
Human knowledge, Popper wrote, may be mistaken. While Popper claimed
that "we may be wrong," his pupil Soros claims that "we are bound to be
wrong." Both agreed that "right" and "wrong" or "good" and "bad" are
rational concepts and evoke claims of certitude. In his later years,
Popper became more of a libertarian, fearful of the abuses of power by
socialists.
Today George Soros opines that the United States is the world's best
example of an open society, despite the failings of the founding fathers
and founding documents.
He holds that the Declaration of Independence, the Constitution, and the
Bill of Rights, based as they are on Enlightenment thinking, do not
allow for modern skepticism and the limitations of the human mind. Soros
holds that there is no certainty in life and no ultimate truth.
In his 1997 Atlantic Monthly article, he wrote, "The Declaration of
Independence may be taken as a pretty good approximation of the
principles of an open society, but instead of claiming those principles
are self-evident, we ought to say that they are consistent with our
fallibility."
He adds that the open society concept is highly sophisticated, and much
more difficult to work with than the more primitive beliefs, such as,
"my country (or my company or my family), right or wrong."
The Enlightenment refers to an 18th century European philosophy based on
rationality together with belief and piety as a means to a system of
aesthetics, ethics, and logic. The Age of Enlightenment, preceded by the
Age of Reason, is credited with leading Europe and the world out of the
Dark Ages by developing nation-states, sciences, social reforms, and
political reformations. The Enlightenment was the basis for the American
and French revolutions and ultimately for modern-day humanistic
secularism. Open-society believers, while rejecting the rationalism of
the Enlightenment, opt for its secularism to guide the restructuring of
nation-states through social and political engineering.
Open-society advocates would reinterpret the U.S. Constitution to better
suit the "age of fallibility," which no longer recognizes unalienable
rights or divine providence. The Soros open-society concept requires
that the United States be removed as a superpower and that the American
people be subjected to the will and wants of all the world's people.
To support his belief that the human mind cannot fathom ultimate truth
and reality, Soros apparently advocates the deconstruction of nations by
educating the masses in open-society jargon.
His open society comes off as a bastardization of socialism and
libertarianism. This mixed brew includes more taxes (but not on the
Soros fortune), increased government spending, open borders, immigration
entitlements for legal and illegal aliens, devaluing citizenship but
promoting feminism, free abortions, affirmative action, and sex and
gender rights. Incongruously he would lessen government intrusion while
eliminating "excessive individualism." Essential to an open society is
destruction of the nation-state authority, family structure, and
religious beliefs, thus rendering national culture, heritage, and ethos
meaningless.
Popper concluded that since science has no certain truths or secure
foundations, a state should have no fixed virtues or heritage. While
Soros molds Popper's concepts to his thinking, he notably refrains from
directing any revisionism toward Muslim countries or organizations.
Open Society, Open Borders
Open-society, open-borders advocates seek to vilify the United States as
a war-mongering, empire-building, brutish abuser of the world's
impoverished nations. The United States thus is worthy of internal and
external contempt and global defeats as part of the nation's
deconstruction.
Soros' latest book, The Age of Fallibility (Public Affairs 2006), is a
pamphlet-like espousal of his beliefs, political, economic,
philosophical, and nihilistic. In the book's prologue, he writes that
the United States is the main obstacle to a stable and just world.
Open-society billionaires like Soros are modern-day robber-barons who
seek world domination –for themselves– by supporting all comers who
attack the United States. The Democracy Alliance is a shadow group of
billionaires led by Soros that acts as a financial clearinghouse to
support radical left-wing groups. Under the guise of honest debate and
political criticism, Soros and his followers seek a change in U.S.
policies. In the United States, the Democrats are their party of choice,
and the Democratic Party and its minions are receptive.
A current tool of deconstruction is the immigration chaos caused by 20
million illegal aliens residing in the United States. Add to this the
proposed U.S. Senate immigration legislation supported by Soros-funded
special interest groups. Open-society advocates realize that open
borders can only mean a devaluation of citizenship, of voting, of
patriotism, and love of country. Open borders mean equal opportunity for
dismantling the United States.
Soros equates the Bush administration and conservatives to communists
and Nazis. From Popper's theory that communism and fascism were
philosophically linked, Soros goes a step further and declares that
America is an open society that does not understand the concept of an
open society and does not abide by its principles. According to him,
U.S. democracy does not recognize that the ultimate truth is beyond our
reach. In recent years, Soros has moved radically to the left both in
his philosophy and politics.
In The Age of Fallibility, Soros gives immigration short shrift, saying
that Europe, with an aging population, needs immigrants as an economic
necessity. Soros brags that while he is a U.S. citizen, he is also a
European. For open-society advocates, citizenship has little meaning.
President Theodore Roosevelt did not believe in hyphenated-Americans,
let alone "Americans" who claim they owe allegiance to another country.
In 2006, the Open Society Institute contributed to the U.S. Justice
Fund, which, in turn, awarded a grant to the Immigrant Legal Resource
Center, San Francisco office, to defend non-citizens in criminal and
immigration matters and to combat the federal government's
"inappropriate" use of local jails for detention of non-citizens.
Another grant went to an author to write articles on alleged immigration
enforcement excesses for magazines and newspapers, thus attempting to
sway public opinion in favor of illegal aliens and open borders.
Organizations that receive Soros funding, directly or indirectly,
include Human Rights Watch, the Center for American Progress, Citizens
for Responsibility and Ethics in Washington (CREW), and the New Democrat
Network (NDN). As an example of what these organizations do, the NDN
operates the Hispanic Strategy Center to assist immigrants, legal and
illegal. The goal is to extend the vote to all non-citizens and to
assure that they vote the Democratic ticket.
The old bromides–environmental degradation, abortion, anti-war, poverty,
human rights, justice for all, health care for all, and peace at any
price are being doled out to a new generation in the hope that enough
naïve, poorly educated U.S. citizens will support the open-society
agenda.
Rebuttal
Despite well-financed promotions of the open-society philosophy, the
United States remains a republic based on inalienable rights of the
individual and guidance by divine providence.
Enlightened self interest keeps the nation strong. Culture, ethos,
heritage, and language are the foundation of a nation's sovereignty, of
its very existence. The United States of America is blessed with one
constitution, one flag, one language, and one people owing allegiance to
one nation under God with liberty and justice for all.
The history of the United States is one of assimilation, with immigrants
embracing U.S. values. These values still stand in opposition to
nouveau open-society dogmatists led today by seekers of a one-world
government, perhaps speaking Esperanto.
George Soros wants to make a lasting contribution to economic
understanding.
Bill Cunningham/The New York Times
Robert Soros, right, never shared the enthusiasm of his father George,
for following the markets. Robert is one of five Soros children.
At the age of 77, Mr. Soros, one the world’s most successful
investors and richest men, leapt out of retirement last summer to
safeguard his fortune and legacy. Alarmed by the unfolding crisis in the
financial markets, he once again began trading for his giant hedge fund
— and won big while so many others lost.
Mr. Soros has always
been a controversial figure. But he is becoming more so with a new, dire
forecast for the world economy. Last week he rushed out a book, his
10th, warning that the financial pain has only just begun.
“I
consider this the biggest financial crisis of my lifetime,” Mr. Soros
said during an interview Monday in his office overlooking Central Park. A
“superbubble” that has been swelling for a quarter of a century is
finally bursting, he said.
Mr. Soros, whose daring, controversial
trades came to symbolize global capitalism in the 1990s, is now busy
promoting his book, “The New Paradigm for Financial Markets,” which goes
on sale mid-May. An electronic version is already available online.
And yet this is not the first time that Mr. Soros has prophesied doom.
In 1998, he published a book predicting a global economic collapse that
never came.
Mr. Soros thinks that this time he is right. Now in
his eighth decade, he yearns to be remembered not only as a great trader
but also as a great thinker. The market theory he has promoted for two
decades and espoused most of his life — something he calls “reflexivity”
— is still dismissed by many economists. The idea is that people’s
biases and actions can affect the direction of the underlying economy,
undermining the conventional theory that markets tend toward some sort
of equilibrium.
Mr. Soros said all aspects of his life — finance,
philanthropy, even politics — are driven by reflexivity, which has to
do with the feedback loop between people’s understanding of reality and
their own actions. Society as a whole could learn from his theory, he
said. “To make a contribution to our understanding of reality would be
my greatest accomplishment,” he said.
Mr. Soros has been worrying
about the fragile state of the markets for years. But last summer, at a
luncheon at his home in Southampton with 20 prominent financiers, he
struck an unusually bearish note.
“The mood of the group was
generally gloomy, but George said we were going into a serious
recession,” said Byron Wien, the chief investment strategist of Pequot
Capital, a hedge fund.
Mr. Soros was one of only two people there
who predicted the American economy was headed for a recession, he said.
Shortly after that luncheon Mr. Soros began meeting with hedge
fund managers like John Paulson, who was early to predict a crisis in
the housing market. He interrogated his portfolio managers and external
hedge funds that manage his fund’s money, and he took on new positions
to hedge where they might have gone wrong. His last-minute strategies
contributed to a 32 percent return — or roughly $4 billion for the
year.
The more Mr. Soros learned about the crisis, the more
certain he became that he should rebroadcast his theories. In the book,
Mr. Soros, a fierce critic of the Bush administration, faults regulators
for allowing the buildup of the housing and mortgage bubbles. He
envisions a time, not so distant, when the dollar is no longer the
world’s main currency and people will have a harder time borrowing
money.
Mr. Soros hopes his theories will finally win the respect
he craves. But, ever the trader, he hedges his bets. “I may well be
proven wrong,” he said. “I would say that I’m the boy who cried wolf
three times.”
Many of the people Mr. Soros wants to influence may
view him with skepticism, in part because of how he made his fortune. In
1992, his fund famously bet against the British pound and helped force
the British government to devalue the currency. Five years later, he bet
— correctly — that Thailand would be forced to devalue its
currency, the baht. The resulting bitterness toward him among Thais was
such that Mr. Soros canceled a trip to the country in 2001, fearing for
his safety.
Asked if it bothers him that people accuse him of
causing economic pain, his blue eyes dart around the room. “Yes, it
does, actually yes,” he said.
Asked if those people are right to
blame him, he says, “Well no, not entirely.”
No single investor
can move a currency, he said. “Markets move currencies, so what happened
with the British pound would have happened whether I was born or not,
so therefore I take no responsibility.”
Mr. Soros, came of age in
Nazi-occupied Hungary and has for decades longed to write a masterpiece
that might put him among thinkers like Hegel or Keynes, said Michael T.
Kaufman, who wrote a book about Mr. Soros. “He spent years writing
papers and letters to people, but everyone ignored him,” Mr. Kaufman
said.
But when Mr. Soros became rich, people began listening. He
also started giving large sums to charities, and in Eastern Europe, as
the Soviet Union crumbled, he distributed copy machines to encourage
free speech in his native Hungary. So generous was Mr. Soros with his
money that “Sorosovat” became a new verb in Russian, loosely meaning to
apply for a grant.
He continues to be one of the top givers to
charities around the world, and has given more than $5 billion away
through his foundations.
Yet even Mr. Soros acknowledges that many
economists still slight his theories.
“I am known as a hedge
fund manager and I am known as a philanthropist, and it’s very hard for,
say, academics to accept that a hedge fund manager may actually have
something to say about economics,” Mr. Soros said. “So that has been
difficult for me to overcome.”
But Joseph E. Stiglitz,
a professor at Columbia who won the Nobel for economics in 2001, said
Mr. Soros might still meet success. “With a slightly different
vocabulary these ideas, I think, are going to become more and more part
of the center,” said Mr. Stiglitz, a longtime friend of Mr. Soros.
Mr.
Soros’s firm, Soros Fund Management, has been through several turbulent
years. Stanley Druckenmiller, his longtime No. 2, left in 2000, in
part because he was tired of the constant media attention Mr. Soros
attracted. (Mr. Soros credits Mr. Druckenmiller for the winning gamble
on the British pound, saying he added the encouragement to bet more
money on the trade.)
Several outside investors also left, and Mr.
Soros overhauled the company as more of a wealth management tool for
his own family and related charities. Mr. Soros said in 2000 that he no
longer desired returns like the 30.5 percent his fund returned on
average, after management fees, from 1969 to 2000.
In 2004, Mr.
Soros tapped his oldest son, Robert, to become the chief investment
officer, despite Robert’s reluctance.
At that time, Mr. Soros,
was busy trying to turn public opinion against President Bush. He
donated $27 million to anti-Bush organizations and traveled the country
speaking out against the president. This time around, he is less
involved. He endorsed Senator Barack Obama but kept his
distance from the campaign trail.
Robert Soros, 44, who once
claimed his father based his trades not on grand theories like
reflexivity but rather on his back pain, never shared his father’s
enthusiasm for the markets. “When you’re a billionaire’s son, you’re
less hungry than when you’re a Hungarian immigrant,” one former Soros
Fund Management executive said.
Even so, the Soros fund performed
well under the younger Soros, and as recently as last June, it was up 10
percent for the year, according to a letter to investors. At the end of
July, Robert stepped down from his head investment role, just before
his father returned to trading. Robert and his brother Jonathan remain
deputy co-chairmen, under their father, the chairman of the fund.
This
week, Mr. Wien illustrated the knack of Mr. Soros for timing with an
old story. In 1995, Mr. Soros asked Mr. Wien why he bothered going to
work every day. Why not go to work only on days when there is something
to do?
“I said, ‘George, one of the differences between you and
me is you know when those days are, and I don’t,’” Mr. Wien said.
White House Subversion: Obama Hands Soros Bank,
Favoritism
Chicagoland gangsta style racketeering in the White House. We are
living in an age of lawlessness by the effete elite, while the
persecution of the common man becomes commonplace. It's ugly.
And Obama is handing over our national treasure to America-hater and self
professed nazi George Soros, who was mentored by and was a longtime
associate of Francois Genoud, Hitler and the Grand Mufti's banker:
Genoud
is notable for being the executor of last
will and testament
of Nazi propagandist Joseph Goebbels, and for reportedly making a fortune from
publishing Goebbels' diaries; later he would attain an equal measure of
notoriety for bankrolling the legal defenses of Adolf Eichmann and Klaus
Barbie.[1]
Nazi hunters such as Serge Klarsfeld and Simon Wiesenthal, journalist David Lee Preston and
others have asserted that his role as a benefactor for surviving
National Socialist interests goes much deeper, offering evidence that
Genoud was no less than the principal financial
manager of the hidden
Swiss assets of the Third Reich after WW II,[2]
and would use his banking contacts to set in motion networks that later
became known as ODESSA,
which sponsored evacuation of key Nazi
leaders into Morocco,
Spain and
Latin America.
In 1958 he founded the Arab Commercial Bank, which would be active in
lending money to Arab nationalist groups and as the chief repository
for the Algerian National Liberation Front,[3]
in Geneva in 1958, and in 1962 was named Director of the Arab People's
Bank in Algiers.[4]
He is also believed by Swiss authorities to have been the founder of
Lugano-based al
Taqwa Bank, which was shut down in 2002 for
reputed status as a funding conduit for al Qaeda and Hamas.
Preston, David Lee. "Hitler's Swiss connection". Philadelphia
Inquirer(January 5, 1997):
Note: One month after Swiss banking officials and Jewish
leaders announced an agreement to set up an independent commission,
chaired by former US Federal Reserve Chairman Paul Volker, to search for
the whereabouts of funds deposited in Switzerland by Holocaust victims,
a Swiss citizen named Francois Genoud committed suicide.
Author David Lee Preston suggests that Genoud's suicide may be linked to
the new commission as well as to Senator D'Amato's investigations for
the U.S. Senate Banking Committee and class action lawsuits against
Swiss banks filed by Holocaust survivors and victims' heirs. Genoud, a
Nazi enthusiast and friend of Hitler's, worked with Swiss and German
intelligence during WWII; he was then active in setting up the ODESSA
network for the transfer of money
from Germany and the evacuation of key Nazi leaders at the end of the
war. Postwar, Genoud used his wartime contacts to become an advisor to
Arab causes and anti-Israel activities.
Accusations of
favoritism swirl in deals for institutions seized by government
A company formed by an investor group that includes billionaire George
Soros
swooped in to purchase a failed California
bank in the latest acquisition by the
company, despite controversy surrounding some of its previous bank
takeovers.
OneWest Bank entered into a purchase and assumption
agreement with the
Federal Deposit Insurance
Corporation, or FDIC, for the acquisition of all of
the deposits and certain assets of La Jolla Bank.
The acquisition is the latest in a string of failed bank
purchases for the
California-based OneWest, a federal savings bank formed by an investor
group
that includes billionaire George Soros and Dell Inc. founder Michael
Dell.
According to a press release, under the terms of the
transaction OneWest
acquired $3.6 billion in assets, including $3.3 billion in loans, and
$2.8
billion in deposits of La Jolla, as of Dec. 31, 2009. The FDIC and
OneWest have
entered into a loss-sharing agreement covering a majority of the
acquired loans.
Last March OneWest completed the purchase for $13.9
billion of the failed
lender IndyMac Federal Bank, described as one of the largest casualties
of the
housing crisis. IndyMac had been seized by the government prior to
OneWest's
purchase.
OneWest also reportedly acquired and will continue to
operate Financial
Freedom, one of the nation's largest reverse
mortgage businesses, as part of
that deal.
Another bank which recently entered a deal with OneWest
is First Federal Bank
of California, which had been closed by the FDIC. All deposits were
transferred
to OneWest, with California locations reopening as branches of OneWest
Bank.
Investment News
quoted insiders as saying the true draw for the kinds of
purchases by OneWest are the properties and real estate debt the banks hold.
Posted on Tuesday, December 13, 2005 9:45:04 AM by oxcart
(CNSNews.com) - A conservative advocacy group is urging its supporters to cancel their policies with Progressive Insurance, after Peter Lewis, the company's chairman, reportedly gave $8.5 million to the American Civil Liberties Union. The multi-million dollar donation will help the ACLU advance its liberal agenda, including its "war on Christmas," the American Family Association warned. In an email message, AFA Founder and Chairman Don Wildmon urged his supporters to "sign a letter to Chairman Lewis, letting him know" that his donation to the ACLU is prompting conservatives to cancel their insurance policies. The AFA recently announced that it was ending its boycott of Target stores, after the retailer promised to use the word "Christmas" in its advertising and in-store promotions.
George Soros Backs Obama (But Hedges His Bets)
January 27, 2007, 11:19 am
George Soros, the billionaire former hedge fund manager, met with a group of reporters over lunch on Saturday — he paid the check — and offered views on everything from markets to American politics to Bill Gates as a philanthropist.
His own spending on what he calls “civil society” projects is on the rise. “It peaked at $600 million in the mid-90’s,” he said. “I meant to cut back to 300, but I never quite got there.” After stabilizing at about $400 million a year, it will be between $450 million and $500 million this year, Mr. Soros said.
He said he is introducing new projects to promote a common European foreign policy and study the integration of Muslims in 11 European cities.
Mr. Soros commended the Bill and Melinda Gates Foundation for doing good work while avoiding the hostility he had encountered with his efforts to hold governments accountable for spending. “They have chosen public health, which is like apple pie,” he said.
The United States is now recognizing the errors it had made in Iraq, he said, adding, “To what extent it recognizes the mistake will determine its future.” Mr. Soros said Turkey and Japan were still hurt by a reluctance to admit to dark parts of their history, and contrasted that reluctance to Germany’s rejection of its Nazi-era past.
“America needs to follow the policies it has introduced in Germany,” he said. “We have to go through a certain de-Nazification process.”
As for the U.S. 2008 presidential race, Mr. Soros, who gave $18 million to Democratic advocacy groups seeking to defeat President Bush in 2004, said he supported Barack Obama. But he also said he would support Hillary Clinton if she won the Democratic nomination. John McCain, he said, had “compromised far too much with the Bush administration” and was unlikely to win the Republican nomination. And who will win? Mr. Soros said he thinks the leading possibilities are former Massachusetts Governor Mitt Romney and former New York Mayor Rudolph Giuliani.
On investing, which made him rich, Mr. Soros said that “hedge funds are the market now,” which makes it much harder to beat the market than when he was a prominent hedge fund manager. He cautioned that the heavy use of debt to leverage up financial transactions — both in hedge funds and in companies bought by private equity funds — could prove damaging when and if the economy stumbles. — Floyd Norris
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