George Soros CBS "60 minutes" Interview 1998 Transcript

Of all the financial titans and philanthropists of the 20th century, none are more complex or mysterious than George Soros. Like Carnegie, J.P. Morgan and the Rockefellers, he amassed billions through ruthless business decisions, only to turn around and give away most of his fortune to advance his own personal philosophy. He can move world financial markets simply by voicing an opinion, or destabilize a government by buying and selling its currency. He also pledged more aid last year to help people in Russia than the U.S. government did. But now George Soros is worried. He thinks the global economy is coming apart at the seams, and that the world needs to be protected from people like George Soros.

George Soros:	We may now think that everything is fine, but the fact is that the system is broke, and it needs fixing.

Steve Krost: What you’re doing is asking some form of regulation to protect the world against you.

Soros:	Well, I am a player, and I think all players should be regulated. There have to be rules of the game.

Right now his Quantum Group hedge fund moves 14 billion dollars of rich investors’ money around the world every day, looking for profits, and answering to no one. Soros makes huge bets on whole countries and economies. Last year when he saw cracks in the Asia boom, he began selling currency in Thailand. Traders in Hong Kong followed suit, triggering a financial crisis that plunged much of Asia into a depression.

Krost:	In the last 2 years you’ve been blamed for financial collapse of Thailand, Malaysia, Indonesia, Japan and Russia-

Soros:	Yep, all of the above-

Krost:	All of the above. Are you that powerful?

Soros:	No, I think there’s a great misunderstanding.

Krost:	The prime minister of Malaysia said that the region spent 40 years trying to build up its 	economy and along comes a moron like Soros with a lot of money and it’s all over. He called you a criminal.

Soros:	It’s easier for him to blame an outside force than to admit that they were mismanaging their economy and their currency. The French finance minister talked about hanging speculators from lampposts.

Soros says the Asian currencies would’ve collapsed even if he hadn’t been in the market; they were overvalued. He says people tend to follow his lead because he’s been so successful.

Soros:	I think I’ve been blamed for everything. I am basically there to make money. I cannot and do not look at the social consequences of what I do.

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Jim Grant: This man is a carnivore of the first order.

Jim Grant is the editor of Grant’s Interest Rate Observer, and one of Wall Street’s most respected analysts. He never tires of watching Soros in part because of the huge bets he’s willing to place on his hunches.

Grant:	He has always amazed the people he’s worked with at his audacity and his willingness to back up his commitments with enormous sums of money. It causes the blood to drain from ordinary mortals’ faces.

Like risking 2 billion dollars in Russia. When the Russian market began falling apart in August, Soros was the country’s single largest investor. He called the U.S. Treasury and asked Uncle Sam for 47 billion dollars to prop up the ruble. When U.S. officials failed to intervene, Soros wrote a letter to The Financial Times of London saying he thought the Russian currency should be devalued by as much as 25%. A few words from Soros were enough to cause panic selling that fueled the crash.

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Krost:	What’s it like to have a statement that you make have such serious, grievous consequences? 	I mean you can… It looks to me like in a number of situations you can take a position 	against a currency or make a statement, and the whole country falls apart.

Soros:	Right, it’s a tremendous sense of responsibility actually, and it is also a humbling experience because I am actually trying to do the right thing, and sometimes what I do has an unintended negative consequence as it in Russia.

For both the Russian middle and for Soros, who lost his 2 billion dollars. Whatever his motivations, no one can accuse him of greed. He’s backed away from the day-to-day operation of his businesses, and is giving away his billions now with the same determination that he made them, in places like Haiti, a country that has less money in the bank than he does. Last month, he brought the first lady with him for a look at some of the projects his foundation is funding.

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Hillary Clinton: This is Mr. George Soros, and he’s gonna be helping your hospital.

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This year Soros plans to give away almost 500 million dollars around the world. In Bosnia, when the water supply to Sarajevo was cut off at the height of the siege it was Soros who wrote a check to jury-rig a pipeline through an abandoned highway tunnel.

Richard Holbrooke: 5 million dollars upfront can be more valuable than 50 million dollars a year or two later.

Ambassador Richard Holbrooke brokered the peace in Bosnia.

Holbrooke: At one point, after the Dayton Peace Agreements in Bosnia 1995, for a considerable period of time George had given more money to implement the peace agreements than the U.S. government had. He just could move that fast.

In Russia he pledged 100 million dollars to help scientists who might otherwise have sold their expertise to bidders like Iran or Iraq. In Eastern Europe he’s educated a new generation, and in Ukraine he spent millions retraining the old Soviet miltary.

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Krost:	At the center of George Soros there’s an inherent contradiction.

Soros:	Which is?

Krost:	Which is on one hand you’re the capitalist who does not care about the social consequences 	of his act, and on the other hand you are a philanthropist who cares only about social 	consequences. How do you resolve the two?

Soros:	Recognizing that as a competitor I’ve got to compete to win. As a human being, I am 	concerned about the society in which I live.

Krost:	Which George Soros am I talking to now? The amoral George Soros or the moral George
	Soros?

Soros:	It’s one person. It’s one person, who at one time, engages in amoral activities, and at the rest 	of the time, tries to be moral.

To understand the complexities and contradictions in his personality, you have to go back to the very beginning, to Budapest, where George Soros was born 68 years ago to parents who were wealthy, well educated, and Jewish.

When the Nazis occupied Budapest in 1944, George Soros’ father was a successful lawyer. He lived on an island in the Danube and liked to commute to work in a rowboat. But knowing there were problems ahead for the Jews he decided to split his family up. He bought them forged papers and he bribed a government official to take 14 year old George Soros in and swear that he was his Christian godson. But survival carried a heavy price tag. While hundreds of thousands of Hungarian Jews were being shipped off to the death camps, George Soros accompanied his phony godfather on his appointed rounds, confiscating property from the Jews.

These are pictures from 1944 of what happened to George Soros’ friends and neighbors.

Krost:	You’re a Hungarian Jew who escaped the Holocaust by posing as a Christian, and you 	watched lots of people shipped of to the death camps.

Soros:	Right, I was 14 years old, and I would say that’s when my character was made.

Krost:	In what way?

Soros:	That one should think ahead, one should understand and anticipate events, and one is threatened. It was a tremendous threat of evil, I mean, it was a very personal experience of evil.

Krost:	My understanding is that you went out with this protector of yours, who swore that you were his adopted godson. Went out in fact and helped in the confiscation of property from the Jews.

Soros:	That’s right, yes.

Krost:	I mean, that sounds like an experience that would send lots of people to the psychiatric couch for many, many years. Was it difficult?

Soros:	Not at all, not at all. Maybe as a child you don’t see the connection but it created no problem at all.

Krost:	No feeling of guilt?

Soros:	No.

Krost:	For example that I’m Jewish and here I am, watching these people go. I could just as easily be there. I should be there. None of that?

Soros:	Well, of course I could be on the other side, I could be the one from whom the thing is being 	taken away, but there was no sense that I shouldn’t be there because that was… Well actually, funny way, it’s just like in markets that if I weren’t there – of course I wasn’t doing 	it – but somebody else would be taking it away anyhow, and it was the- Whether I was there 	or not, I was only a spectator. The property was being taken away so I had no role in taking away that property, so I had no sense of guilt.

Krost:	Are you religious?

Soros:	No.

Krost:	Do you believe in God?

Soros:	No.

Soros told us he believes God was created by man, not the other way around, which may be why he thinks he can smooth out the world’s imperfections.

When we went to him to Ukraine he was treated like a visiting head of state and was received by the president. Then he was received by the prime minister and finally the central bank. They even allowed him to look at the books and asked him for advice. Lots of people want George Soros’ advice, most recently South African president Nelson Mandela

Soros:	Actually President Mandela asked me, “How could South Africa protect itself against speculators like you?” and I told him, I wrote him a memo, trying to give him the best advice I could, how to reduce the exposure of South Africa to speculative attack.

Krost:	That’s the old “stop me before I kill again” approach, right? You’re telling, “This is what you can do to stop me.”

Soros: Whether I or somebody else does whatever is happening in the markets really doesn’t make any difference to the outcome. I don’t feel guilty because I’m engaged in an amoral activity 	which is not meant to have anything to do with guilt.



Part of the reason he is so rich is that the Soros hedge funds operate offshore in the Netherlands Antilles, to avoid scrutiny by the Securities and Exchange Commission. So even while Soros tells Congress and the Treasury that hedge funds must be regulated to stop the global crisis, he’s avoiding the rules.

Krost:	Why is it that Americans can invest in the Quantum Fund? It’s an offshore fund. Why is that?

Soros: Because a fund is not registered with the Securities and Exchange Commission, so we are not-

Krost:	Licensed to do business in the United States.

Soros:	That’s right.

Krost:	Because?

Soros:	Because we are not registered with the Securities and Exchange Commission. Because we find it more convenient to operate without it.

Krost:	So in some ways it’s to escape regulation.

Soros:	That’s right.

Krost:	You’ve been sitting here talking about the need for regulation.

Soros:	Yes, and whatever regulations are imposed, we will… We already conform to everything.

If the beneficiaries of Soros’ billions do not understand the intricacies of SEC rules and offshore hedge funds, they do understand what he’s done for them. The president of Haiti is reading his new book “The Crisis of Global Capitalism”, and so is President Clinton. Will all the attention spoil George Soros?

Grant:	George Soros in a way is Donald Trump without the humility.

Krost:	One of your money manager told us that George really does think he’s God.

Soros:	I mean if you think that you’re God and you go into financial markets you’re bound to come out broke, so the fact that I’m not broke shows that I don’t believe that I am God.