A Tale of Two Vastly Divergent
Lives
In June of 1946, a child was born in Queens, New York. His
parents were second-and first-generation immigrants to the Unites States, his
dad’s roots German and his mother a native Scot who emigrated to the US in 1930.
His father was
an entrepreneur who, seeing opportunity in the post-World War II housing shortage,
used Government backed loans to become a leading developer of apartment complexes
and other real estate investments. Although his empire was built with the leveraged
assistance of taxpayer dollars, he soon built a profitable and self-sufficient
real estate empire, almost all of it in Brooklyn, New York. Along the way, his
devotion to the business far exceeded the attention he parceled out to his
growing family of five.
Our “hero” was
the fourth of five children, but when the eldest declined to remain in the “family”
business, he was derided by his father for choosing to become a pilot instead of buying ,selling and collecting rents. This would eventually lead to ever greater
separation from the family and the scorn of our “hero” as well as his two sisters
and younger brother.
The second son
was schooled privately and, when he proved incapable of self-control, was shuffled
off to military school. On graduation, he enrolled at Fordham University. Two
years later he transferred to the Wharton School of the University of
Pennsylvania, graduating in May 1968 with a B.S. in economics. While he claimed
in interviews that he graduated first in his class at Wharton he, in fact, never
even made the school's honor roll.
He had a flair
for self-promotion, however and that resonated with his father. Donald Trump (you
knew it already, didn’t you?) has often said he began his career with "a
small loan of one million dollars" from his father, and that he had to pay
it back with interest. However, based in part on information provided by his niece
and buttressed by forensic accounting, the New York Times revealed that he "was a millionaire by
age 8", borrowed at least $60 million from his father, largely failed to
reimburse him, and had received $413 million (adjusted for inflation) from his
father's business empire over his father’s lifetime. This includes money “laundered”
by dad Fred Sr., who sent minions to buy, and then discard, hundreds of thousands
of dollars-worth of chips at his son’s failing Atlantic City casino which
eventually went into receivership anyway.
Today his net worth
is less than if he had simply invested his father’s untaxed gifts at 6% interest. Trump's investments have
consistently underperformed the stock market and the New York property market. He has personally guaranteed $421 million in
debt, most of which is due to be repaid by 2024. Tax records also show that Trump
has unsuccessfully pursued business deals in China, including by developing a
partnership with a major government-controlled company.
But this is
really about what wealthy people do (or don’t do) with the wealth derived from
doing business in America. Trump has made varying claims of giving via the Donald
J. Trump Foundation. In fact, Trump hasn’t given any of his own money to the
Trump Foundation since 2008—almost all of its funding came from other people,
including some of his business associates. Not only that, but the Foundation
has violated federal laws regarding charitable organizations, the most blatant
of which may be (there are many to choose from) a $25,000 political donation to
Pam Bondi, then attorney general of Florida. At the time the donation was made,
Bondi had been considering whether to launch an investigation of the
scandal-plagued, now defunct by judicial decree, Trump University. Once brought
to light it was blown off as a “clerical error”.
The list is long and varied and is notable in no
small part because of the continued pattern of soliciting charitable contributions
and then using the money for decidedly non-charitable causes. As just one
example, The Trump Foundation has spent over a quarter of a million dollars to
settle lawsuits filed against Trump businesses. Public records indicate that,
over the past quarter of a century, he has given away less than $5 million of
his own money. According to his own estimate, he is worth in
excess of $10 billion. If we take him at his word, that means his charitable
contributions come to about 0.05 per cent of his fortune, or five cents for
every $100.
On the brighter
side, nine years after Donald Trump was born wealthy, another young man was born to an upper middle class couple across the nation in Seattle, Washington. Privately
schooled like Trump, but differently motivated, the young man became fascinated
with computers and applied himself to learning about them, especially how
programming was done. Eventually, he and a friend were paid to automate the
school's class-scheduling system, providing them computer time and royalties in
return. These weren’t gifts of family money, but compensation for providing a
valuable service. He was 16 at the time. When his friend and co-programmer was
killed while mountain climbing the following summer, he turned to another school friend and fellow computer jock as partner. They would remain so for their
working lives. Thus, Bill Gates and Paul Allen began their ascent to the top of
then American pyramid by virtue of their own efforts.
Bill Gates was
a National Merit Scholar when he graduated from Lakeside School in 1973. He
scored 1590 out of 1600 on the SAT (!!) and enrolled at Harvard in 1973. He was
a pre-law major but took mathematics and graduate level computer science
courses. After two years and increasing interest in programming, and with his parent’s
understanding that he was anxious to start his own business, Bill Gates left Harvard,
never to go back (or need to). He and Paul Allen named their partnership
"Micro-Soft", a combination of "microcomputer" and
"software", and their first office was in Albuquerque. They dropped
the hyphen within a year and officially registered the trade name
"Microsoft" with the Secretary of the State of New Mexico on November
26, 1976. Every dollar of “seed money” was obtained through hard work and use
of their natural abilities. The sales of MS-DOS (the version of DOS operating
system sold to customers other than IBM) made Microsoft a major player in the
industry. We all know the rest of the story; I’m typing this on a Windows 10 machine
with Microsoft Office 365.
Gates oversaw
Microsoft's company restructuring on June 25, 1981, which re-incorporated the
company in Washington State and made Gates the president and chairman of the
board, with Paul Allen as vice president and vice chairman. In early 1983,
Allen left the company after receiving a Hodgkin's lymphoma diagnosis, effectively
ending the formal business partnership between Gates and Allen. They remained
friends until Allen's death in October 2018. Together the two donated millions
to their childhood school, Lakeside. Allen also endowed several museums in
Seattle.
According to
the Bloomberg Billionaires Index, Bill Gates was the world's highest-earning billionaire
in 2013, as his net worth increased by US$15.8 billion to US$78.5 billion. This
largely a result of increased price of the Microsoft shares held by Gates and
his wife Melinda.
In 2000, Bill
and Melinda combined three family foundations and donated stock valued at $5
billion to create the charitable Bill & Melinda Gates Foundation, which made
it the world's wealthiest charitable
foundation, with assets reportedly valued at more than $34.6 billion. The foundation allows benefactors to access
information that shows how its money is being spent, unlike many other major
charitable organizations. (like the Trump Foundation?) Gates, through his
foundation, also donated $20 million to Carnegie Mellon University for a new
building to be named Gates Center for Computer Science (which opened in 2009)
As of 2007,
Bill and Melinda Gates were the second-most generous philanthropists in
America, having given over $28 billion to charity; the couple plan to
eventually donate 95% of their wealth to charity. on December 9, 2010, Bill and
Melinda Gates and investor Warren Buffett each signed a commitment they called
the "Giving Pledge", which is a commitment by all three to donate at
least half of their wealth, over the course of time, to charity.
Why have I
written this? It started with the notice in today’s paper of Bill Gates’ 65th
birthday. I reflected on the continuing stream of negative comments made by Trump and others, including
conspiracy theorists, about Gates, Buffet and others while lauding Donald Trump
as benefactor and genius.
The facts are strikingly contradictory. The Gates
foundation has given billions domestically and abroad with little or no public
notice desired. Bill Gates, individually and separately from the Foundation,
has donated over six times as much, just to US Universities as Trump’s
verifiable lifetime charitable contribution. As an aside, the often-maligned
and also entirely self-made, Jeff Bezos, pours a billion annually just into space
research which benefits us all. That
works out to over 100 times as much every year, as Trump has
donated from his personal wealth in his lifetime. Of course, Trump rarely
misses an opportunity to denigrate either Gates or Bezos.
Vote!
No comments:
Post a Comment