George Soros

Currently, Soros is chairman of Soros Fund Management and the Open Society Institute and is also a former member of the Board of Directors of the Council on Foreign Relations. According to his own website, Soros claims his support for the Solidarity labor movement in Poland, as well as the Czechoslovak human rights organization Charter 77, contributed to ending Soviet Union political dominance in those countries.^[4] His funding and organization of Georgia's Rose Revolution was considered by Russian and Western observers to have been crucial to its success, although Soros said his role has been "greatly exaggerated." In the United States, he is known for having donated large sums of money in a failed effort to defeat President George W. Bush's bid for re-election in 2004. On BookTV, November 12, 2007, he said that he supports Barack Obama for the Democratic candidate in the 2008 election, but says that John Edwards, Hillary Clinton, or Joe Biden are all fine candidates, as well.

Former Federal Reserve Chairman Paul Volcker wrote in 2003 in the foreword of Soros' book The Alchemy of Finance:

Biography

Family

The family changed its name in 1936 from Schwartz to Soros, in response to growing anti-semitism with the rise of Fascism. Tivadar liked the new name because it is a palindrome and because it has a meaning. Although the specific meaning is left unstated in Kaufmann's biography, in Hungarian, "soros" means "next in line, or designated successor", and in Esperanto, it means "will soar".^[6] His son George was taught to speak Esperanto from birth and thus is one of the rare native Esperanto speakers. George Soros later said that he "grew up in a Jewish home", and that his parents were "cautious with their religious roots".^[7] However, Soros's father was proud of his Jewish roots (which can be seen in his memoir on his experiences during the holocaust, Masquerade).

George Soros has been married and divorced twice, to Annaliese Witschak, and to Susan Weber Soros. He has five children: Robert, Andrea, Jonathan (with his first wife, Annaliese); Alexander, Gregory (with his second wife, Susan). His elder brother Paul Soros, an engineer, is a well-known philanthropist, investor, and New York socialite.

Native Hungary, and move to England

Soros was thirteen years old in March 1944 when Nazi Germany took military control over Hungary^[8]. Soros worked for the Jewish Council for two days^[5], which had been established during the Nazi occupation of Hungary to forcibly carry out Nazi and Hungarian government anti-Jewish measures. Soros later described this time to writer Michael Lewis:

To avoid his son's being apprehended by the Nazis, Soros's father paid a Ministry of Agriculture employee to have Soros spend the summer of 1944 living with him and posing as the godson. Young Soros had to hide his Jewishness even as the official was overseeing the confiscation of Jewish property.^[10]

In the following year, Soros survived the battle of Budapest in which Soviet and Nazi forces fought house-to-house through the city. Soros first traded currencies during the Hungarian hyperinflation of 1945–1946.

Soros emigrated to England in 1947 and graduated from the London School of Economics in 1952. While a student of the philosopher Karl Popper, Soros funded himself by taking jobs as a railway porter and a waiter at Quaglino's restaurant where he was told that with hard work he might one day become head waiter. He also worked in a mannequin factory, but was fired for being too slow at putting on the heads. He eventually secured an entry-level position with London merchant bank Singer & Friedlander.

Move to the United States

In 1956 he moved to New York City, where he worked as an arbitrage trader with F. M. Mayer from 1956 to 1959 and as an analyst with Wertheim and Company from 1959 to 1963. Throughout this time, Soros developed a philosophy of "reflexivity" based on the ideas of Karl Popper. Reflexivity, as used by Soros, is the belief that the action of beholding the valuation of any market by its participants affects said valuation of the market in a procyclical 'virtuous or vicious' circle.^[11]

Soros realized, however, that he would not make any money from the concept of reflexivity until he went into investing on his own. He began to investigate how to deal in investments. From 1963 to 1973 he worked at Arnhold and S. Bleichroeder, where he attained the position of vice-president. Soros finally concluded that he was a better investor than he was a philosopher or an executive. In 1967 he persuaded the company to set up an offshore investment fund, First Eagle, for him to run; in 1969 the company founded a second fund for Soros, the Double Eagle hedge fund.^[11]

When investment regulations restricted his ability to run the funds as he wished, he quit his position in 1973 and established a private investment company that eventually evolved into the Quantum Fund. He has stated that his intent was to earn enough money on Wall Street to support himself as an author and philosopher - he calculated that $500,000 after five years would be possible and adequate. Five years later, his net worth reached an estimated $11 billion.^[11]

Business

Soros is the founder of Soros Fund Management. In 1970 he co-founded the Quantum Fund with Jim Rogers. It returned 42.6% per year for the next ten years and created the bulk of the Soros fortune. Rogers retired from the fund in 1980. Other partners have included Victor Niederhoffer and Stanley Druckenmiller.

Currency speculation

On Black Wednesday (September 16, 1992), Soros became immediately famous when he sold short more than $10 billion worth of pounds, profiting from the Bank of England's reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.

Finally, the Bank of England was forced to withdraw the currency out of the European Exchange Rate Mechanism and to devalue the pound sterling, and Soros earned an estimated US$ 1.1 billion in the process. He was dubbed "the man who broke the Bank of England."

The Times of Monday, October 26, 1992, quoted Soros as saying: "Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell."

According to Steven Drobny,^[14] Stanley Druckenmiller, who traded under Soros, originally saw the weakness in the pound. "Soros' contribution was pushing him to take a gigantic position," in accord with Druckenmiller's own research and instincts.

In 1997, during the Asian financial crisis, then Malaysian Prime Minister Mahathir bin Mohamad accused Soros of using the wealth under his control to punish ASEAN for welcoming Myanmar as a member. Later, he called Soros a moron.^[15] Thai nationals have called Soros "an economic war criminal^[16]" who "sucks the blood from the people".^[17]

Public predictions

Soros' 2008 book, The New Paradigm for Financial Markets, describes a "superbubble" that has built up over the past 25 years and is now ready to collapse. This is the third in a series of books he's written that have predicted disaster. As he states:

He ascribes his own success to being able to recognize when his predictions are wrong.

Insider trading charges

In 1988, he was asked to join a takeover attempt of the French bank Société Générale. He declined to participate in the bid but did later buy a number of shares in the company. French authorities began an investigation in 1989, and in 2002 a French court ruled that it was insider trading as defined under French securities laws and fined him $2 million, which was the amount that he made using the insider information.

Punitive damages were not sought because of the delay in bringing the case to trial. Soros denied any wrongdoing and said news of the takeover was public knowledge.^[19]

His insider trading conviction was upheld by the highest court in France on June 14, 2006.^[20] In December, 2006 he appealed to the European Court of Human Rights, claiming that the 14 year delay in bringing the case to trial precluded a fair hearing.^[21]

Sports

In 2005, Soros joined a group of investors seeking to buy the Washington Nationals of Major League Baseball's National League. Although he was only a minority partner, some Republican lawmakers suggested that they might tamper with baseball's antitrust exemption if Soros had any interest at all in any baseball team, including the Nationals.^[22] Ultimately, real estate magnate Ted Lerner was selected as the new owner, though baseball stressed that political pressure was not a factor. In 2008, Soros' name was associated with AS Roma, the Italian soccer team. Some speculated that he had bought the club from the Sensi's, the actual owners of AS Roma. However, despite offers by the American businessman, the society wasn't sold.

Philanthropy

Time magazine in 2007 cited two specific projects - $100 million toward Internet infrastructure for regional Russian universities; and $50 million for the Millennium Promise to eradicate extreme poverty in Africa - while noting that Soros has given $742 million to projects in the U.S., and given away a total of more than $6 billion.^[23]

According to National Review^[24] the Open Society Institute gave $20,000 in September 2002 to the Defense Committee of Lynne Stewart, the lawyer who has defended alleged terrorists in court and was sentenced to 2⅓ years in prison for "providing material support for a terrorist conspiracy" via a press conference for a client. An OSI spokeswoman said "it appeared to us at that time that there was a right-to-counsel issue worthy of our support."

In September 2006, Soros departed from his characteristic sponsorship of democracy building programs, pledging $50 million to the Jeffrey Sachs-led Millennium Promise to help eradicate extreme poverty in Africa. Noting the connection between bad governance and poverty, he remarked on the humanitarian value of the project.^[25]

Political donations

In an interview with The Washington Post on November 11, 2003,^[26] Soros said that removing President George W. Bush from office was the "central focus of my life" and "a matter of life and death." He said he would sacrifice his entire fortune to defeat President Bush, "if someone guaranteed it", and many continue to state this as Soros's position even after Soros clarified the statement in a Q&A session at the end of his March 3, 2004 address to California's Commonwealth Club.

Soros gave $3 million to the Center for American Progress, committed $5 million to MoveOn, while he and his friend Peter Lewis each gave America Coming Together $10 million. (All were groups that worked to support Democrats in the 2004 election.) On September 28, 2004 he dedicated more money to the campaign and kicked off his own multi-state tour with a speech: Why We Must Not Re-elect President Bush^[27] delivered at the National Press Club in Washington, DC. The online transcript to this speech received many hits after Dick Cheney accidentally referred to FactCheck.org as "factcheck.com" in the Vice Presidential debate, causing the owner of that domain to redirect all traffic to Soros's site.^[28]

Soros was not a large donor to US political causes until the U.S. presidential election, 2004, but according to the Center for Responsive Politics, during the 2003-2004 election cycle, Soros donated $23,581,000 to various 527 Groups dedicated to defeating President Bush. Despite Soros' efforts, Bush was reelected to a second term as president in U.S. presidential election, 2004.

After Bush's reelection in 2004, Soros and other wealthy liberal political donors backed a new political fundraising group called Democracy Alliance which aims to support the goals of the U.S. Democratic Party.^[29]^[30]

Soros has been criticized for his large donations, as he also pushed for the Bipartisan Campaign Reform Act of 2002 which was intended to ban "soft money" contributions to federal election campaigns. Soros has responded that his donations to unaffiliated organizations do not raise the same corruption issues as donations directly to the candidates or political parties.

Harken Energy, a firm partly owned by Soros, did business with George W. Bush in 1986 by buying his oil company, Spectrum 7.

His book, The Age of Fallibility: Consequences of The War on Terror, was published in June 2006.^[31]

Activities in Eastern Europe

Since the fall of the Soviet Union, Soros' funding has continued to play an important role in the former Soviet sphere. His funding and organization of Georgia's Rose Revolution was considered crucial to its success by Russian and Western observers, although Soros has said that his role has been "greatly exaggerated."^[32] Alexander Lomaia, Secretary of the Georgian Security Council and former Minister of Education and Science, is a former Executive Director of the Open Society Georgia Foundation (Soros Foundation,) overseeing a staff of 50 and a budget of $2,500,000.^[33]

Some Soros-backed initiatives have been banned in Turkmenistan and Russia. Ercis Kurtulus, head of the Social Transparency Movement Association (TSHD) in Turkey, said in an interview that "Soros carried out his will in Ukraine and Georgia by using these NGOs...Last year Russia passed a special law prohibiting NGOs from taking money from foreigners. I think this should be banned in Turkey as well."^[34] In 1997, Soros closed his foundation in Belarus after it was fined $3 million by the government for tax and currency violations. Soros called the fines part of a campaign to "destroy independent society." ^[35]

Activities in Africa

Drug liberalization

Soros has funded worldwide efforts to promote Drug liberalization. In 2008, Soros funded a ballot measure in the state of Massachusetts to decriminalize marijuana possession known as the Massachusetts Sensible Marijuana Policy Initiative. Of the $429,000 raised to promote the measure in 2007, Soros donated $400,000. Soros has also funded similar measures in California, Alaska, Oregon, Washington, Colorado, Nevada and Maine. ^[36] Among the drug decriminalization groups that have received funding from Soros are the Lindesmith Center and Drug Policy Foundation.^[37]

Death and dying

The Project on Death in America, active from 2001-2003, was one of the Open Society Institute's projects, which sought to "understand and transform the culture and experience of dying and bereavement."^[38] Soros has promoted physician assisted suicide. In 1994, Soros delivered a speech in which he reported that he offered to help his mother, a member of the Hemlock Society, commit suicide.^[39] In the same speech, he also endorsed the Oregon Death with Dignity Act,^[40] the campaign for which he helped fund.^[41]

Gun control

Directly and through his organization Open Society Institute (OSI), he has funded various gun control organizations, such as the Tides Foundation, the HELP Network and SAFE Colorado. He and seven friends founded their own political committee — Campaign for a Progressive Future — and spent $2 million on political activities in 2000, including providing the prime financial backing for the Million Mom March. OSI has supported UN efforts to create international gun control regulations and has singled out the United States for failing to go along with other countries on international gun control measures.^{citation needed}

Philosophy

Education and beliefs

Soros has a keen interest in philosophy, and his philosophical outlook is largely influenced by Karl Popper, under whom he studied at the London School of Economics. His Open Society Institute is named after Popper's two volume work, The Open Society and Its Enemies, and Soros's ongoing philosophical commitment to the principle of fallibilism (that anything he believes may in fact be wrong, and is therefore to be questioned and improved) stems from Popper's philosophy. Some critics^who? argue that Soros' static political beliefs appear to conflict with the critical rationalism espoused by Popper, though Soros argues that these beliefs were arrived at through such rationalism. Soros does not consider himself religious, and has stated that he does not believe in God.^[42]

Reflexivity, financial markets, and economic theory

Soros' writings focus heavily on the concept of reflexivity, where the biases of individuals enter into market transactions, potentially changing the fundamentals of the economy. Soros argues that such transitions in the fundamentals of the economy are typically marked by disequilibrium rather than equilibrium, and that the conventional economic theory of the market (the 'efficient market hypothesis') does not apply in these situations. Soros has popularized the concepts of dynamic disequilibrium, static disequilibrium, and near-equilibrium conditions.^[11]

A current example of reflexivity in modern financial markets is that of the debt and equity of housing markets. Lenders began to make more money available to more people in the 1990s to buy houses. More people bought houses with this larger amount of money, thus increasing the prices of these houses. Lenders looked at their balance sheets which not only showed that they had made more loans, but that their equity backing the loans--the value of the houses, had gone up (because more money was chasing the same amount of housing, relatively). Thus they lent out more money because their balance sheets looked good, and prices went up more, and they lent more, etc. Prices increased rapidly, and lending standards were relaxed. The salient issue regarding reflexivity is that it explains why markets gyrate over time, and do not just stick to equilibrium--they tend to overshoot or undershoot.^[11]

View of potential problems in the free market system

Despite working as an investor and currency speculator, he argues that the current system of financial speculation undermines healthy economic development in many underdeveloped countries. Soros blames many of the world's problems on the failures inherent in what he characterizes as market fundamentalism. His opposition to many aspects of globalization has made him a controversial figure.

Victor Niederhoffer said of Soros: "Most of all, George believed even then in a mixed economy, one with a strong central international government to correct for the excesses of self-interest."

Soros claims to draw a distinction between being a participant in the market and working to change the rules that market participants must follow.

Views on antisemitism

At a Jewish forum in New York City, Soros partially attributed a recent resurgence of antisemitism to the policies of Israel and the United States, and to successful Jews such as himself:

Books

Authored or co-authored

Biographies

Journalism

Authored

About

Scholarly perspectives

Speeches

Commentaries

Interviews

References

^ ^a ^b The World's Billionaires -#97 George Soros, Forbes, March 5, 2008
^ Authors@Google: George Soros
^ William Shawcross, "Turning Dollars into Change," Time Magazine, September 1, 1997
^ George Soros, A Biographical Note, dated May 2006.
^ ^a ^b Kaufman, Michael T., Soros: The Life and Times of a Messianic Billionaire, Alfred A. Knopf: 2002
^ Kaufman, Michael T., Soros: The Life and Times of a Messianic Billionaire, Alfred A. Knopf: 2002, p. 24
^ Slater, R.: "Soros: The Unauthorized Biography", page 30
^ Holocaust Encyclopedia
^ Michael Lewis, "The Speculator: What on earth is multibillionaire George Soros doing throwing wads of money around in Eastern Europe?", The New Republic, 10 January 1994. See also Kaufman, Michael T., Soros: The Life and Times of a Messianic Billionaire, Alfred A. Knopf: 2002, p. 32-33
^ O'Brien, Timothy L (1998-12-06). "He's Seen The Enemy. It Looks Like Him.", New York Times. Retrieved on 2008-07-28.
^ ^a ^b ^c ^d ^e ^f ^g Soros, George (2008). The New Paradigm for Financial Markets. Public Affairs, New York. ISBN 978-1-58648-683-9.
^ http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=54532
^ Anderson, Jenny (2008-04-16). "Wall Street Winners Get Billion-Dollar Paydays", New York Times. Retrieved on 2008-07-28.
^ Steven Drobny, "Inside the House of Money", John Wiley & Sons: Hoboken, NJ, 2006.
^ A question of openness (asiaweek.com)
^ "Financier George Soros urges Mahathir's ouster", Time Magazine (2008-12-04).
^ Opportunity Lost (asiaweek.com)
^ ^a ^b "Soros, the Man Who Cries Wolf, Now Is Warning of a 'Superbubble'" by Greg Ip, B1, June 21-22, 2008 The Wall Street Journal.
^ ^a ^b David Brancaccio interviews George Soros, Now, PBS, September 12, 2003, accessed Feb. 8, 2007.
^ Insider trading conviction of Soros is upheld (International Herald Tribune)
^ Soros appeals conviction for insider trading, Billionaire takes French conviction to European court (International Herald Tribune)December 14, 2006
^ Soros's Nats Bid Irks Republicans
^ TIME 100, The Power Givers, George Soros, TIME Magazine, May 14, 2007 accessed May 21, 2007
^ York, Byron, Soros Funded Stewart Defense, National Review Online, accessed February 7, 2007
^ Philanthropist Gives $50 Million to Help Aid the Poor in Africa
^ Laura Blumenfeld, Deep Pockets vs. Bush, Financier Contributes $5 Million More in Effort to Oust President, Washington Post, November 11, 2003; Page A03
^ Why We Must Not Re-elect President Bush
^ Cheney Drops the Ball
^ http://www.capitalresearch.org/pubs/pdf/FW1206.pdf
^ "New Alliance Of Democrats Spreads Funding". Retrieved on 2006-07-17.
^ Book review at Forbes.com
^ [1]
^ [2]
^ [3]
^ [4]
^ LeBlanc, Steve, Soros behind Mass. effort to decriminalize pot, Associated Press, August 27, 2008
^ http://norml.org/index.cfm?Group_ID=4416, National Organization for the Reform of Marijuana Laws
^ Project on Death in America
^ [5]
^ [6]
^ [7]
^ Steve Kroft: Are you a religious man? Soros: No. Kroft: Do you believe in God? Soros: No. 60 Minutes, broadcast December 20, 1998.
^ jta.org
^ Soros, George. "On Israel, America and AIPAC." New York Review of Books, April 12, 2007.

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