Monday, November 1, 2010
I am sitting on a bar stool. On the other side of a round metal table, the world’s second richest man is sipping a Diet Coke, eating french fries with his fingers and explaining the history of the polio vaccine. Bill Gates would still be the richest man in the world, if he didn’t keep giving his money away. Now, after donating $28bn to the Bill & Melinda Gates Foundation – which funds health, development and educational causes – he is down to his last $54bn. For a man who has made such an incredible fortune, Gates seems to have modest tastes. We meet at his office in Kirkland, a suburb of Seattle, and walk across the road to the Beach Café in the Woodmark, a smart local hotel. It is a pleasant enough spot, overlooking Lake Washington, but I am guessing it has been chosen for convenience rather than cuisine. We are seated in the bar area, away from the other diners. Gates is wearing a brilliant white, zip-up sweatshirt over a pale green shirt and khaki trousers. Now in his mid-fifties, he still looks youthful, with just a hint of grey in his sandy hair. A waitress comes into view and Gates orders clam chowder and a cheeseburger. I also go for a cheeseburger, with a crab dip, and we get talking about life in Seattle. He tells me that he still drives himself around the city. Intrigued by his lack of ostentation, I ask whether he has expensive hobbies? Not really, his game is bridge and “all you need for that is a deck of cards”. So is he an ascetic? Gates demurs – “No . . . I have a nice office. I have a nice house . . . So I’m not denying myself some great things. I just don’t happen to have expensive hobbies.”
Just a couple of miles away, however, lies the hi-tech Gates mansion, said to be worth $125m, complete with a library with a quotation from The Great Gatsby on the ceiling. Gates’s account of the origins of Micro-soft also has little to do with money. He founded the firm in 1975, after dropping out from Harvard to indulge his passion for computing. “When I decided to go and start Microsoft, it wasn’t because it was some lucrative career. Paul Allen [his childhood friend and co-founder of Microsoft] and I were just excited about the personal computer and it was something we were surprised nobody else was working on . . . We got to work on the most interesting problems and hired incredible people . . . We were in on the ground floor.” As Gates tells it, the money was almost an accidental by-product: “Really, if you develop good software, the business isn’t that complicated . . . The business side is pretty simple; you try and take in more than you spend.” I know that many of Gates’s competitors would roll their eyes at that rather artless description of how the Microsoft empire was built. Gates was a famously driven businessman and in the mid-1990s his firm was accused of anti-competitive practices and eventually fined billions of dollars in the US and Europe. I ask about the popular narrative that in the 1990s the ruthlessly efficient Microsoft had “crushed” its rival, Apple, even though Apple fans insisted that its products were better designed. “I don’t remember them being crushed,” snorts Gates. “I don’t remember them ever being crushed. We were writing software for them and in their lowest day, who [was it that] invested in Apple to help them out? Well, that was Microsoft. I see,” he laughs scornfully.
In the late 1990s Gates, then in his mid-forties, began to change direction and his tough image changed with it, as he channelled his money into philanthropy. “I think there was one year that I gave, like, over $16bn.” He pauses and says with uncharacteristic vagueness, “I think it was the year 2000: maybe even $20bn.” Since then he has kept giving and has also devoted himself to persuading fellow billionaires – such as Larry Ellison of Oracle, Ted Turner of CNN and Michael Bloomberg, the mayor of New York – to give large parts of their fortunes to charity. Gates muses that the decision to turn to philanthropy at an early age can be uncomfortable for some people. “There’s all sorts of reasons to put off doing it, because however you made your money, you were super-good at it, you know what you are doing . . . So getting into something new is very difficult and also it kind of forces you to think about your death.”…..In 2008, Gates became non-executive chairman of Microsoft and he now devotes most of his time to the foundation. But, he says, “I’m working as many hours now as I did in the decade before I made the transition.” He pauses. “I don’t work the hours that I did in my twenties and early thirties, when I took no vacations and didn’t go home most nights. That was true fanaticism.” In those years, when Warren Buffett, the billionaire investor who is now a close friend, bridge partner and a major donor to the Gates Foundation, wanted to meet the man from Microsoft, Gates initially couldn’t find time in his diary. “I was too busy; I didn’t do things like that.” So, I suggest, you had no social life? Gates puts me right: “No, I socialised with my parents on a Sunday night, but I just didn’t go and meet new people who were involved in investments.”
Gates may no longer be working like a fanatic, but he is clearly utterly gripped by the medical challenges that his foundation is taking on – in particular the effort to develop new vaccines for malaria and HIV and to eradicate polio through vaccination. The moments when he appears to be most enjoying himself are when he gets into the science, and as he talks, he folds his arms across his chest and rocks gently backwards and forwards. But his conversation is also punctuated by sudden bursts of laughter. He chuckles as he describes the British army officer in India, who first discovered that malaria was carried by mosquitoes – “You know, good old Major Ross was sitting out there in India, not really doing much, but he was part of the British military and he . . . figured out, hey, this thing is not about the smell from the swamp, this is the mosquito biting them.” The passion for science and technology that drove Microsoft forward is now being channelled into the search for medical advances. I ask Gates whether he sees any parallels between the development of software and the development of vaccines. “Oh sure,” he replies, taking a sip of Coke. “It’s backing smart people to solve a problem you think is important.” The main difference, he says, is the patience required. “With software you know whether something is right or not in three or four years . . . but a lot of the things we’re doing now are more in the five- to ten-year time frame, like this malaria vaccine work.” Gates talks at length and with great enthusiasm about all the various lines of research being pursued in the search for vaccines for HIV and malaria, but he has no medical training. I ask him whether he ever feels out of his depth, discussing the latest developments. He shoots me a slightly incredulous look and says, “No, because I read whatever it takes and I get to learn whatever I want to learn. And I get to spend time with people who work in the field and they’re very nice about educating me. So I’ve got to learn a lot about immunology, which is a super-interesting field,” he says, grinning with pleasure and taking a bite out of his cheeseburger. One striking feature of the foundation is the extent to which its work is focused outside the United States, particularly in Africa and India. There is a programme devoted to educational reform in America but the largest share of the money goes to health and development in the poorest parts of the world. Gates casts the decision almost as a matter of business efficiency. “You want to improve human life as much as you can sort of per-dollar, and the ability to do that in poor countries is over a hundred times greater than if you are working in an area where the basic situation is much better.”
But what about the lobby of people who insist that foreign aid is ineffective – and that Gates is, in effect, wasting his money? His response is firm, although delivered in mild tones: “Well, if the critics were serious, what they would do is take aid and start to categorise it . . . Nobody gave money to Mobutu in Zaire [thinking] he was spending it well, but that was a cold war calculation.” On the other hand, there are also “success stories in aid that are really quite unbelievable”. He ticks them off: “green revolution, reducing mass starvation, preventing famine . . . The whole miracle of vaccination . . . The primary reason we’ve gotten down from 20m children dying a year to close to eight million is vaccines.” Anticipating the objection that this will just cause a population explosion and therefore heighten poverty, Gates says that the research shows that healthier families with lower infant mortality have fewer children. So his vaccination and development programmes are actually helping to prevent a population explosion, rather than causing one. Inevitably, Gates is making decisions and funding projects that have all sorts of political implications. But, unlike George Soros, he has carefully avoided becoming a politically controversial figure. I get just a hint of his politics, however, when we discuss the speed and energy with which China is developing and I suggest that some might find it all a bit scary. The word sets Gates off: “If all you care about is the US or the UK’s relative strength in the world, then it’s particularly scary,” he says laughing sarcastically. “In the US case, 1945 was our relative peak.” Since then, as he points out, other countries from Europe to Asia have rebuilt and become more prosperous, but, says Gates, “I guess I’m just not enough of a nationalist to see it all in negative terms.” On the contrary, Gates is excited by the things that a richer China could bring to the world. “I think it’s good that Chinese scientists are working on cancer drugs, because if my kid got cancer, I wouldn’t look at the label that says ‘made in China’. And, hopefully, we’ll get them working on some of these vaccines and also on energy.”
But Gates is also worried about the environment, so I ask him if the rapid industrialisation of China is a recipe for environmental disaster. Again, his impulse is to look to technology for a solution: “Short of going to war over this issue, the best way would be to find innovative forms of energy generation”. He is excited by solar and nuclear energy, and mocks those who complain about rising Chinese energy use – “I mean, these Chinese are actually using as much energy per capita as the average in the world today, how dare they! How did that happen? The US uses four times the average and the Brits double. But now these Chinese are trying to use the average.” He shakes his head in mock outrage, and for the first time I feel I am seeing Bill Gates in full flow – a mixture of energy, aggression, humour and intellect. But, just as he is warming to his theme, our waitress arrives with the coffee. Gates has declined, but I have ordered a single espresso (we are in Seattle, after all). When the waitress departs and Gates returns to the sensitive theme of American-Chinese relations, he is speaking more slowly and cautiously. I drink up my coffee and ask for the bill. As I produce my credit card, Gates looks slightly amused. “You sure you want to pay for this?” he says. “I got money.” I don’t doubt it. But the rules are that the FT pays for lunch. We will not be asking for Bill Gates’s charity. There are plenty of other willing takers for that.
Reference : The Financial Times, Oct 30th 2010
Wednesday, June 2, 2010
…..With as much as 34 million gallons of oil inking the Gulf of Mexico, “Yes we can” has been downgraded to “Will we ever ?” It’s impossible not to feel sorry for President Obama, pummeled by the cascading disasters, at home and abroad, unleashed by two war-mongering oil men — plus scary escalations by Israel, Iran and North Korea. (Dick Cheney’s dark influence is still belching like the well. BP just brought on a new public relations executive: Anne Womack-Kolton, who served as Cheney’s campaign press secretary in 2004 and worked in W.’s White House and at the Energy Department.)…..The oil won’t stop flowing, but the magic has. Barack Obama is a guy who is accustomed to having stuff go right for him. He’s gotten a lot of breaks: two opponents in his U.S. Senate race in Illinois felled by personal scandals; a mismanaged presidential campaign by Hillary Clinton; an economic collapse that set the stage for a historic win, memorably described by the satiric Onion newspaper as “Black Man Given Nation’s Worst Job.”
Reporters grilled Robert Gibbs at his White House briefing on Tuesday about the president’s strange inability to convey passion over a historical environmental disaster. This was underscored by Obama’s perfunctory drop-by to a sanitized beach in Grand Isle, La. Despite his recent ode about growing up near an ocean, he didn’t bother to meet with the regular folks who have lost their seafaring livelihoods. After Gibbs asserted that his boss was “enraged” at BP, CBS News’s Chip Reid skeptically pressed: “Have we really seen rage from the president on this? I think most people would say no.” “I’ve seen rage from him, Chip,” Gibbs insisted. “I have.” Reid asked for an exact definition of what constitutes emotion for Obama: “Can you describe it? Does he yell and scream? What does he do?” Gibbs mentioned the words “clenched jaw” and the president’s admonition to “plug the damn hole.”…..This president has made it clear that he’s not comfortable outside whatever domain he’s defined. But unless he wants his story to be marred by a pattern of passivity, detachment, acquiescence and compromise, he’d better seize control of the story line of his White House years. Woe-is-me is not an attractive narrative.
Monday, May 31, 2010
President Spock’s behavior is illogical. Once more, he has willfully and inexplicably resisted fulfilling a signal part of his job: being a prism in moments of fear and pride, reflecting what Americans feel so they know he gets it. “This president needs to tell BP, ’I’m your daddy,’ “ scolded James Carville, a New Orleans resident, as he called Barack Obama’s response to Louisiana’s new watery heartbreak “lackadaisical.”…..Obama invented himself against all odds and repeated parental abandonment, and he worked hard to regiment his emotions. But now that can come across as imperviousness and inflexibility. He wants to run the agenda; he doesn’t want the agenda to run him. Once you become president, though, there’s no way to predict what your crises will be. F.D.R. achieved greatness not by means of imposing his temperament and intellect on the world but by reacting to what the world threw at him.
For five weeks, it looked as though Obama considered the gushing that became the worst oil spill in U.S. history a distraction, like a fire alarm going off in the middle of a law seminar he was teaching. He’ll deal with it, but he’s annoyed because it’s not on his syllabus. Even if Obama doesn’t watch “Treme” on HBO, it’s strange that he would not have a more spontaneous emotional response to another horrendous hit for Louisiana, with residents and lawmakers crying on the news and dead pelicans washing up on shore. But then, he didn’t make his first-ever visit to New Orleans until nearly a year after Katrina hit. “I never had occasion to be here,” he told The Times’s Jeff Zeleny, then at The Chicago Tribune.
Just as President Clinton once protested to reporters that he was still “relevant,” President Obama had to protest to reporters last week that he has feelings. He seemed to tune out a bit after the exhausting battle over health care, with the air of someone who says to himself: “Oh, man, that was a heavy lift. I’m taking a break.” He’s spending the holiday weekend in Chicago when he should be commemorating Memorial Day here with the families of troops killed in battle and with veterans at Arlington Cemetery. Republican senators who had a contentious lunch with the president last week described him as whiny, thin-skinned and in over his head, and there was extreme Democratic angst at the White House’s dilatory and deferential attitude on the spill. Even more than with the greedy financiers and arrogant carmakers, it was important to offend and slap back the deceptive malefactors at BP. Obama and top aides who believe in his divinity make a mistake to dismiss complaints of his aloofness as Washington white noise. He treats the press as a nuisance rather than examining his own inability to encapsulate Americans’ feelings. “The media may get tired of the story, but we will not,” he told Gulf Coast residents when he visited on Friday. Actually, if it weren’t for the media, the president would probably never have woken up from his torpor and flown down there. Instead of getting Bill Clinton to offer Joe Sestak a job, Obama should be offering Clinton one. Bill would certainly know how to gush at a gusher gone haywire. Let him resume a cameo role as Feeler in Chief. The post is open.
Wednesday, May 12, 2010
Everybody here lies. But with the arrival of Hamid Karzai, the mendacity blossomed into absurdity. The question for the Obama White House is not whether it can grow to appreciate the caped capo who runs Afghanistan. (President Obama can’t stand him.) The question is whether Karzai will fall for all the guff they’re throwing at him. Ambassador Karl Eikenberry and Gen. Stanley McChrystal were paraded into the White House press room to pretend as though their dispute about the efficacy of the surge, given Karzai’s serious flaws as a partner, has been put to rest. (It hasn’t.) The administration crooned a reassuring lullaby to the colicky Karzai: that it has a long-term commitment in Afghanistan (it doesn’t) and an endgame there (it doesn’t) and that it knows that the upcoming Kandahar offensive will work (it doesn’t). Asked by a reporter about the change from sticks to carrots, Richard Holbrooke, the special envoy to Afghanistan and Pakistan who has had contentious sessions with Karzai, replied: “No, I certainly don’t think it’s changed.” (It has.) For their part, the Afghans promise to work on stemming corruption and stopping the poppy trade. (They won’t.)
The administration is trying to delay the inconvenient truth that Karzai wants reconciliation with Taliban leaders; this makes the U.S. cringe, thinking of Mullah Omar and other 9/11 killers…..On Tuesday evening, Karzai was honored at a starry State Department reception along with his ministers — or at least the ones he could get into the country. He didn’t bring his brother, the C.I.A. pal and drug lord, or other especially sleazy government officials…..On Thursday, Karzai is slated to get a special treat — a long, intimate walk in a Georgetown garden with Hillary Clinton — the one person in the administration who prides herself on getting along with him. Romantic strolls through gardens, the administration has decided, are the best way to move the corrupt coxcomb to its point of view…..
The Taliban in Pakistan is training jihadis to attack New York, belying again W.’s chuckleheaded contention that we have to wage war against terrorists abroad so we don’t have to face them at home. Our battles meant to diminish enemies replenish them. The inept Times Square bomber was infuriated by U.S. drone attacks in Pakistan. The Pentagon, the public and administration allies are all expressing frustration with Afghanistan. A majority in a new ABC News/Washington Post poll says Afghanistan is not worth the cost…..The Pentagon said there had been “some success in clearing insurgents from their strongholds” but “progress in introducing governance and development to these areas to move toward hold and build operations has been slow. “The insurgents’ tactic of re-infiltrating the cleared areas to perform executions has played a role in dissuading locals from siding with the Afghan government, which has complicated efforts to introduce effective governance.” A walk in the garden, it’s not.
Thursday, April 29, 2010
…..The wood-paneled Senate committee room had an old-school look. The combed-over committee chairman, Carl Levin, had an old-school look. And the Congressional hearing trying to illuminate surreptitious and avaricious behavior by an amoral, macho gang was the 2010 equivalent of the 1950s Mafia hearing depicted in “Godfather II.” “Government Sachs,” as the well-connected Goldman Sachs is known, was called to account by the actual government on Tuesday. And the traders and executives who dreamed up the idea of packaging smoke were every bit as slick, evasive and dismissively unapologetic as Michael Corleone. He only claimed to trade in olive oil; they actually delivered the snake oil. You know you’re ethically compromised when Senator John Ensign scolds you about ethics. The Nevada Republican is under investigation by the Senate Ethics Committee and the F.B.I. for chicanery surrounding an affair with a staffer. His wealthy parents paid off the mistress and her husband, who was also on Ensign’s payroll. “I think most people in Las Vegas would take offense at having Wall Street compared to Las Vegas. Because in Las Vegas, actually people know that the odds are against them. They play anyway,” said the righteous Ensign. “On Wall Street, they manipulate the odds while you’re playing the game. And I would say that it’s actually much more dishonest.” There was a bipartisan jackpot in casino metaphors. “How does that differ from going out to Caesar’s Palace, the sports book, and making a wager on the outcome of an athletic contest?” Senator John McCain of Arizona asked C.E.O. Lloyd Blankfein…..As Americans lost homes and lined up for jobs, Goldman made $13 billion in 2009, and Blankfein got a bonus of, as he haltingly admitted to McCain, “um, um, nine million.” “The idea that Wall Street came out of this thing just fine, thank you, is something that just grates on people,” Delaware Senator Ted Kaufman told Blankfein. “They think that you didn’t just come out fine because it was luck. They think that you guys just really gamed this thing real, real well.”
…..The Goldman crowd was certainly cosmopolitan. Blankfein dropped a Latin phrase (Goldman had a “de minimis” business in direct home loan mortgages) and French peppered Senate Exhibit No. 62, from the petite, handsome Fabrice Tourre, the S.E.C. target who called himself “the fabulous Fab” in a 2007 e-mail…..In an e-mail to his girlfriend, he called his “Frankenstein” creation “a product of pure intellectual masturbation, the type of thing which you invent telling yourself: ‘Well, what if we created a “thing,” which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?’ ” In another e-mail to her, he blithely joked that he was selling toxic bonds “to widows and orphans that I ran into at the airport.” At least the Fabulous Fab had the good manners to cloak his feelings of fabulousness in front of the committee and put on an earnest mask. Luckily for Goldman, greed may trump ethics. The firm’s stock closed higher Tuesday. Wholesale olive oil closed higher as well.
Friday, March 19, 2010
I think the most important word this decade will be reinvention. Be it companies, careers, institutions, public services – you name it, wholesale renewal is required. The dislocation from such a transformation will be uncomfortable for many, but the outcome will prove invigorating. And the alternative of just carrying on as normal will ultimately prove far more painful. In fields as diverse as state education, book publishing, retailing and financial services, brand new ways of doing things must be found. The old models are mostly failing. Gentle evolution is always nicer than a radical overhaul, but when systems are obviously broken, small steps do not work. So bad schools should be shut and new ones opened; book publishing must embrace electronic media; traditional retailers must dump most of their physical shops and go online; and financial service companies must slash their bloated costs, reduce their fees and rebuild the reputation of their profession. The causes of all this upheaval are multifarious: the economic downturn, an ageing population, the digital revolution, the rise of Asia and environmental issues – among others. Some reasons, like the recession, are shorter term and temporary; others, like the ascent of China, are longer term and permanent. Either way, the challenges must be addressed, and realism rather than spin should be adopted by business and political leaders – starting immediately.
In recent times, America and much of Europe have floated upwards on a sea of debt – personal, corporate and governmental. The tide has now ebbed, and is unlikely to return for the foreseeable future. This liquidity encouraged an illusion of almost limitless prosperity, which led to all manner of foolishness – property mania, early retirement, lavish public spending, a culture of entitlement, banking excesses, corporate over-ambition and so on. That era is dead. As a society we must now be more ingenious and industrious. Job creation must be stimulated, practical learning encouraged, productivity increased, resources preserved and borrowings repaid. All these initiatives should be undertaken simultaneously: not an easy task. When organising a turnround, almost the only golden rule is to remove the management who were in charge when the company collapsed. In similar vein, most of the current establishment should be cleared out, and new champions appointed – because the old guard can never admit that their policies were misguided. Japan failed to recruit fresh blood to positions of power, and so stagnated after its “lost decade” of the 1990s. Shareholders, the electorate and individuals in the west should rise up and demand reform. We need to become economically fitter if we are to compete in the 21st century, and we should learn to do more with less. This is not simply about cost-cutting, but about working smarter, managing more efficiently – and delivering rather than posturing. Bureaucracy should be eliminated and technology embraced to accelerate the development of everything from better transport to new energy sources.
A spirit of enterprise and modern technology can achieve remarkable things if accompanied with sufficient discipline. After all, we are not starting from scratch – there are tremendous tangible and intangible assets to revive: plant, infrastructure, intellectual property, brands and networks. But to succeed, such efforts need a willingness to experiment, to adopt revolutionary policies occasionally, and a self-confidence that is scarce. Whenever I feel in need of encouragement over current circumstances, I turn to Franklin Delano Roosevelt’s inaugural speech, delivered in 1933, during the darkest days of the Great Depression. He talked about how national recovery was dependent on the “permanently important manifestation of the American spirit of the pioneer” and the “stern performance of duty”; how “happiness lies not in the mere possession of money, it lies in the joy of achievement, in the thrill of creative effort”. I endorse his sentiments. He understood the need for firm leadership and bold moves, and the importance of dramatic steps to reorganise industry and national life.
Wednesday, March 17, 2010
So, Barack Obama can lose his temper without a teleprompter. And we have the supremely aggravating Bibi Netanyahu to thank for that…..Obama is so unpopular in Israel that he has nothing to lose by smacking our ally for its egregious treatment of the vice president. Joe Biden, the great champion of Israel, was humiliated when Israel used the occasion of his visit to defy America and announce a plan for 1,600 more homes in the disputed East Jerusalem area. Israeli conservatives figured the American Eagle was toothless given that Obama had already backed down once on settlements. But the president has a lot to gain with Arabs disillusioned by the failure of the pre-emptive Nobel Prize winner to make good on his vaunted Cairo promise to resolve the Palestinian issue. Besides, there is no love lost between the Israeli prime minister and Obama’s aides, Rahm Emanuel and David Axelrod — ever since Bibi obnoxiously labeled them “self-hating Jews” last summer. The president and his inner circle are appalled at Israel’s self-absorption and its failure to notice that America is not only protecting Israel from Iran, fighting wars in Iraq and Afghanistan, but also dealing with a miasma of horrible problems at home. And Israel insults the Obama administration over a domestic zoning issue that has nothing to do with its security? “That’s not how you treat your best friend,” said one Obama official.
During the campaign, Obama told The Atlantic’s Jeffrey Goldberg that “being a friend to Israel is partly to hold up a mirror and tell the truth,” to save them from themselves when they mindlessly let settlement gluttony scuttle any chance of peace…..For the fundamentalist rabbis who run Israel’s working-class, ultra-Orthodox Sephardic Shas Party, the new houses represent earmarks…..“It’s not entirely clear to me that the Shas Party knows who Joe Biden is or cares,” Jeffrey Goldberg told me. “They have very narrow theological interests that don’t conform to the theological interests of American Jews,” he continued. “The high-tech entrepreneurs of Tel Aviv relate to the Shas Party about as well as the Jews of the Upper West Side relate to the Tea Party. The Shas Party is not overly attuned to the American-Israel relationship or the peace process.” Goldberg also points out that “what most right-wing Israelis don’t understand is that even American Jews — especially the nearly 80 percent who voted for Obama — disaggregate what is in the best interest of Israel from what is in the best interest of the settlers.” Obama knows that Jews no longer speak with one voice. That gives him enough room to keep the heat on Netanyahu. But the president’s smackdown also obscures the fact that the administration has no real strategy for peace and no impressive team below Hillary and Biden pushing for peace…..The Iranian mullahs must be laughing at the Americans and Israelis arguing about who insulted whom, while they are busy screwing their nuclear bombs together.