This guy certainly seems to know what he's talking about. He's spent
his life in finance.

Soros calls for trade reform
Biggest Dem donor speaks on tax cuts, jobs, globalization

David Armstrong, Chronicle Staff Writer
Tuesday, March 2, 2004



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Global financier George Soros stressed Monday that globalization is
headed in the right direction but suggested badly needed reforms in
international trade agreements, currency exchange rates and security
pacts are necessary to correct inequities.

Soros, 73 and the possessor of a $7 billion fortune, said in an
interview with The Chronicle that quick action is needed, especially
because the Bush administration seems to be marching off in the wrong
direction.

Among other things, the Hungarian-born financier said President Bush
has failed to take action to stem job losses, initiate steps to
strengthen the dollar and revise trade agreements to assist poor
countries.

Soros is in the Bay Area to participate in a conversation Wednesday
evening with Orville Schell, dean of the UC Berkeley Graduate School
of Journalism, at Zellerbach Auditorium on the campus.

Job losses have become a hot-button issue in this year's presidential
campaign. Some candidates and activists blame job losses on free
trade, but Soros took issue with that position.

"Since I am not running for office, I can say that the World Trade
Organization and international trade increase the size of the pie;
there is more gain than loss,'' he said.

"However, the losses are real, and it is the job of the government to
create more jobs than are lost. The Bush administration is failing to
do this. ''

Soros, who has emerged as the largest donor to the Democratic Party,
questioned whether Bush's tax cuts will stimulate job growth. "The
purpose of Bush's tax cuts was to reduce taxes on the rich, people
like me,'' he said. "The linking of job cuts to taxes is deceptive.
They weren't targeted at the middle class, and some don't kick in for
five years. How does that create jobs in the short term?''

Noting that paying taxes normally carries a negative connotation,
Soros said there is a beneficial side to taxes: "They produce
services. What is wrong about paying taxes?''

Soros, who made millions on currency trading, also criticized the Bush
administration for allowing the dollar to sink against other major
currencies, such as the yen, the euro and the pound. A weak dollar
makes traveling and investing abroad more expensive for U.S. business,
though it can help U.S. exporters, whose goods become more affordable
in foreign markets.

Soros agreed, however, with those in the Bush administration who say
that the yuan, the currency in fast-growing China, should be revalued
so it rises to a more realistic value against the dollar. Many U.S.
economists say the yuan is overvalued by as much as 40 percent, making
U.S. goods more costly in China than they should be.

Soros also favors revising trade agreements to create greater
opportunity for poor countries.

"In the case of agriculture, there are $300 billion in government
subsidies in the developed countries,'' he said. "So, at the WTO
meeting in Cancun, the Group of 20 (developing countries) got together
and pressed for reducing the size of the subsidies.''

Soros supports such efforts to reform the WTO but says that
broad-stroke attacks on free trade generally are misplaced.

Soros also favors multilateralism in international security, noting
that he supported NATO's intervention in Kosovo several years ago but
believes the U.S.-led invasion of Iraq last year went forward on false
grounds.

Force should be used as a last resort, he said, and should be as
multilateral as possible when it is used. The multilateral
peacekeeping force now being assembled to protect lives and property
in the civil war in Haiti is a good example of cooperation among
nations during a crisis, he said.

At home, Soros makes no secret of his desire to unseat Bush. He has
contributed $15 million to liberal political groups and said he is
prepared to donate more, perhaps to a yet-to-be-created "presidential
media fund.''

"The Bush campaign will unleash a media offensive, I think, on
Wednesday, backed by $150 million,'' he said. "The gap is very
large.''

Soros said Sen. John Edwards would be "acceptable'' if he is the
Democratic nominee but seemed more excited by front-runner Sen. John
Kerry.

"I'm delighted that Kerry has emerged as the leading candidate -- a
war hero whose formative experience was the Vietnam War, who wants to
use military force as a last resort. He could do well against a
president, a warmonger, who has not experienced war personally.''



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Name: George Soros
Born: Budapest, Hungary, on Aug. 12, 1930

Profession: Fund manager, currency trader, philanthropist, campaign
donor, author.

Latest book: "The Bubble of American Supremacy: Correcting the Misuse
of American Power'' (December 2003)