Tuesday, March 13, 2007

Mexico City: Carlos Slim; good guy or bad guy?

The world's third richest man, whose fortune grew by 19 billion dollars just last year alone, is in the news. First, I found this article where he supposedly pokes fun at (criticizes) Bill Gates and Warren Buffett for donating such a big chunk of their fortunes to charity. In Buffett's case it will supposedly be 100% of his billions before he's through. Slim is quoted as saying,
"Our concept is more to accomplish and solve things, rather than giving; that is, not going around like Santa Claus," said Slim, as he cracked jokes, smoked a cigar and outlined business plans at a rare news conferences. "Poverty isn't solved with donations.
OK, we all know that. At least the Republicans all know that. And the historians and economists all know that. The vote panderers like Pelosi, Reid, Sharpton and AMLO also know that but ignore it in their never ending quest for popular popularity -- and votes -- and money.

As to Sr. Slim's comment I would ripost with the fact that Gates and Buffett have done more in the past five years to foster job creation and economic growth than has Slim throughout his entire career. Having said that, I did a bit more snooping around in search of Sr. Slim's other comments and actions regarding both philanthropy and real time, honest to goodness contributions to the Mexican economy. What I found seems to fly in the face of the first two paragraphs of this post.

Sr. Slim is reported to have anounced, just yesterday, that he will donate 10 billion dollars over the next four years to form three foundations, one each promoting health care, education and sports development, all for the poor. That ain't exactly cab fare.

He had already announced a 2.5 billion dollar additional donation to his charitable foundation, Fundación Carso, bringing its current funding level up to 2.8 billion dollars. That ain't exactly bus change.

In addition to Mexico, Slim's business interests in other Latin American countries have netted him so much cash that he'll also be setting up or adding to existing charitable foundations there.

And to bolster his position that charity can't end poverty, Slim has come forward to declare that he approves of the Secretary of Communications' rejection of Telmex's bid to buy or establish cable television networks. He said he did not necessarily agree with the government's position that Telmex end its stakes in Televisa and Cablevision but, regardless of the government's position, Telmex was selling off its shares in both companies over time. Slim also said that the land-line telephone business in Mexico should be open to 100% foreign-owned firms as opposed to current law which permits only 49% foreign ownership. Slim said that foreigners were "skirting the law with ownership schemes" anyway, so why not just make it legal?

Slim also jumped on the "Save PEMEX" bandwagon by warning that if the state owned oil company didn't receive at least 18 billion dollars in immediate investment, "in four years we'll be importing oil." One might choose to read between the lines here just a bit and conclude that what Slim is really saying is that PEMEX must be opened up to private investment since the Mexican government doesn't have anywhere close to 18 billion dollars and the oil company will die without that infusion.

There are no more details on Slim's statements that I can find, but one would have to wonder exactly how Slim proposes that Mexico go about opening PEMEX to direct private investment. Mexico would have to rewrite its Constitution (it's done that many times already, so where's the beef?), rewrite and/or dump a huge number of existing laws and statutes as well as rewrite its tax revenue collection procedures. And all of this the government would have to do in the face of violent street warfare led by or urged on by AMLO and others of his ilk.

Not a pretty picture to contemplate but then neither is the bankruptcy of PEMEX. I have a feeling that I know how Sr. Slim would handle it and I also have a sneaking feeling that I would probably approve, but I'll leave all that to your imaginations.

In a very rare news conference that spanned over four hours, Slim fielded reporters' questions on a whole host of topics. And he saved the best for last. He was asked for his response to charges that he bought Telmex for far less than market value. He challenged reporters to check their facts and their numbers. he claims that he bought Telmex for "16% over market value" at the time.

And then he elaborated just a bit.
"It would be absurd to say that (ex-president) Carlos Salinas and I were in cahoots. If I had been in cahoots with Salinas, I would have only paid 1 billion dollars instead of 8 billion."
WHACK! The old high, hard beanball right to Carlos Salinas' temple.

So, is Carlos Slim Helú a good guy or a bad guy? Neither, or both, depending on your politics. He's a rich businessman who intends to use his skills, influence, money and the law to get richer. Just like every other rich businessman. And just like every other businessman who wishes or dreams he was rich.

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