Microsoft Is Fined $100 Billion James Davidson May 1, 2000 "While Joel Klein and his Justice Department were publicly and distastefully celebrating Judge Jackson's decision, the market capitalization of Microsoft was dropping by more than $100 billion. That's not some theoretical figure. It is a loss in real wealth – in many cases, in retirement savings – of more than two million direct shareholders of Microsoft and of tens of millions more who have substantial holdings of Microsoft in their mutual funds and annuities. ... The NASDAQ carnage has been wide-ranging. And why not? The Internet intervention of government, often in league with trial lawyers, threatens every high-tech firm in America." – James R. Glassman, Wall Street Journal, April 6, 2000. Microsoft is fined $100 billion For many years, Silicon Valley was Death Valley as far as politicians were concerned. Candidates trolling for dollars and lobbyists seeking to squeeze rents from successful companies usually came away empty-handed in dealings with New Economy companies. High tech entrepreneurs were getting rich without help from government. Even worse, as far as the politicians were concerned, the new entrepreneurs were insufficiently motivated to pay the kind of protection money that has flowed in torrents from Old Economy companies and corporate executives accustomed to the normal perils and blandishments of government intervention. Many of the big boys of the New Economy, most prominently Bill Gates, the world's richest man, paid less tribute to politicians than a junior vice president at General Motors. It did not go unnoted. Under prodding from some of Microsoft's politically active competitors, like Scott McNealy, CEO of Sun Microsystems, and America Online, owner of Netscape, the Clinton [In]Justice Department brought an antitrust action against Microsoft. As everyone knows, the judge in the case, Thomas Penfield Jackson, appears to have totally swallowed the competitors' view of Microsoft, including the strange notion that Microsoft abused consumers by giving them free Internet software. I am not a Microsoft shareholder, but like most owners of PCs, I am a Microsoft customer. While not without fault, the company has indisputably helped make personal computing much cheaper and more practical than it would have been otherwise. Indeed, it is the very usefulness of Microsoft and its products that make its example informative. Judge Jackson's unfavorable ruling on Monday, April 3, touched off a steeper high tech sell-off than even five Fed interest rate hikes could engineer. In theory, the government clobbered Microsoft for violating some almost metaphysical points of antitrust law. But don't waste your time reading law books. The $100 billion loss to Microsoft shareholders, as well as the one trillion dollars lost from the value of other high tech companies, disappeared for an altogether different reason. Microsoft paid the price because the company and its executives failed to contribute enough money to the Democratic Party. You can bet your last nickel that if Bill Gates had been paying gaudy sums to sleep in the Lincoln Bedroom or sponsoring illegal fund raisers in Buddhist temples, he would never have been targeted by Janet Reno's brigade. Had Gates contributed as avidly to the Clinton re-election as the People's Liberation Army, Microsoft would not only have its near-term future intact, it would probably be running the Panama Canal to boot. If Gates had contributed to politicians instead of to education, the Antitrust division of the Justice Department would have spent the last two years filling crates with useless documents about the courtship between Exxon and Mobil. Why did the Clinton administration go after Gates but leave Exxon alone? Because there was no need for the politicians to pound the oil industry over the head. Oil executives have known that their industry was in thrall to politicians since even before an antitrust ruling broke John D. Rockefeller's Standard Oil into 30 pieces at the beginning of the 20th century. By its end, the Clinton administration was perfectly content to let two of the bigger of those pieces merge back together. Make no mistake. The government attack on Microsoft is not a genuine, if misbegotten, attempt to make markets work better, as some infatuated A-Level students of antitrust theory suppose. It is something less exalted and far more primitive: a power play. Politicians act like jealous dogs. They want to establish their dominion over any new sphere of wealth that technology and economic development bring to the fore. Once upon a time, they fretted that John D. Rockefeller was becoming too powerful. So they sliced and diced his company. The politicians want to be the big dogs in the road. To that end, they are content to impose ruinous costs on anyone who threatens to escape from their thrall. If chopping $25 billion out of Gates' net worth knocks $20,000 off the value of your portfolio or undermines the retirement savings of millions, clipping the value of 969 mutual funds that own Microsoft, so much the better as far as the politicians are concerned. That will make you all the more grateful to them when they "save Social Security" or fetch up some prescription drug benefit for Medicare recipients. The interests of politicians are not best served when you achieve financial independence and success for your family. They would prefer to see an interlude of prosperity which creates wealth that can be taxed and otherwise redistributed away. The system requires that only a few persons in a thousand become rich enough to bear the costs of all the promises that politicians extend to the underachievers. If you doubt it, just calculate the lifetime tax rate for top earners in the United States. Depending on personal circumstances, it ranges from 73 percent to above 90 percent. The whole force of the United States government is directed to seeing that in two generations your descendants will never see more than pennies of the dollars you earn. That is the blunt arithmetic of the income and estate tax laws. As I indicated in a recent analysis, the "subversive lure of wealth" is one of the engines driving and accelerating "creative destruction." As government is one of the main incarnations of the old ways of doing things, and thus one of the fattest targets for destruction by revolutionary new technology, no one should be stunned that one of the most powerful officials in Washington, Alan Greenspan, openly frets that too much wealth is being created too quickly, and that incomes are rising too fast. This recent sell-off in high tech stocks was wanton wealth destruction, engineered directly and indirectly by the U.S. government. In addition to the Microsoft ruling, James Glassman lists half a dozen contributing factors to the widespread decline in New Economy stocks during the week of April 3. (See "Is Government Strangling the New Economy?") His argument underscores a point I have been warning about for years, namely that investors have naively overestimated the degree to which the United States protects them with a genuinely free and open legal system. In fact, anyone with wealth is well-advised to put as much as possible beyond the reach of the corrupt U.S. legal system. Ironically, in the early days of the Strategic Investment Web site someone impersonating Bill Gates wrote a post ridiculing the themes of the Sovereign Individual and pointing to Gates' success as evidence that nobody in the United States needed to protect his wealth from government. That wasn't Gates really writing, but, in any event, recent experience has disproven the point. Contrary to pretenses, the U.S. government is not a true friend of property rights. As I have painstakingly detailed on many occasions, the U.S. legal system has been perverted to conjure up novel liabilities, which never before existed in the history of the world. Threats of confiscation and destruction through regulation that are not posed directly by the government itself are eagerly taken up by the predatory pack of trial lawyers that politicians have encouraged to form on every corner in the United States. http://www.newsmax.com/articles/?a=2000/5/1/112523 Bard Pro Libertate - For Freedom BUCHANAN-Reform http://gopatgo2000.com/default.htm Save a Tree, Plant Algore instead; Besides Spotted Owl's like to Crap on Still Liberals !!! <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! These are sordid matters and 'conspiracy theory'—with its many half-truths, misdirections and outright frauds—is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at: http://home.ease.lsoft.com/archives/CTRL.html <A HREF="http://home.ease.lsoft.com/archives/ctrl.html">Archives of [EMAIL PROTECTED]</A> http:[EMAIL PROTECTED]/ <A HREF="http:[EMAIL PROTECTED]/">ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om
