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John Bogle
John Bogle by Robin Holland
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September 28, 2007

"There are some things that must be entrusted to government and some things that must be entrusted to private enterprise."

John Bogle, 77, created The Vanguard Group, Inc., in 1974, which today is one of the two largest mutual fund organizations in the world, and was was the first index mutual fund. He retired as Chairman and Chief Executive Officer of the fund in 1996, yet remained Senior Chairman until 2000.

In 2000, Mr. Bogle established the Bogle Financial Markets Research Center with Vanguard, which supports his continuing work on behalf of mutual fund investors.

"My estimate is that the financial sector takes $560 billion a year out of society," Bogle explains to Bill Moyers. "Banks, money managers, insurance companies, certainly annuity providers. They're all subtracting value from the economy."

FORTUNE magazine in 1999 designated Mr. Bogle as one of the investment industry's four "Giants of the 20th Century," and in 2004, TIME magazine named him as one of the world's 100 most powerful and influential people.

For two decades, Bogle has been involved with the National Constitution Center, a nonpartisan organization dedicated to increasing awareness of the Constitution, and in 1999 he was unanimously elected NCC Board Chairman.

Bogle has written six books including the best seller THE BATTLE FOR THE SOUL OF CAPITALISM (read an excerpt) and most recently THE LITTLE BOOK OF COMMON SENSE INVESTING.

Photo by Robin Holland

Published on September 28, 2007

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References and Reading:
More on private equity

On September 6, 2006, the House Ways and Means Committee held a hearing entitled, "Fair and Equitable Tax Policy for America's Working Families," in which one of the debate topics was the "taxation of carried interest for investment partnerships," which would specifically force private equity companies to pay the same tax percentage on investment income as normal income tax. Here are two opposing viewpoints, both from private equity managers:
  • Leo Hindery, Jr., Managing Director, InterMedia Partners
    "A tax loophole the size of a Mack truck is right now generating unwarranted and unfair windfalls to a privileged group of money managers, and, to no one's surprise, these individuals are driving right through this $12 billion-a-year hole. Congress, starting with this Committee, needs to tax money management income, what we call carried interest, as what it is, which is plain old ordinary income."

  • Bruce Rosenblum, Managing Director, The Carlyle Group
    "The transition to public ownership may be important in succession planning and allowing a mature PE firm to survive beyond its founders. By discouraging and possibly precluding such steps, the bill imposes unfair limits on the ability of these firms to fully realize their potential."
At Many Homes, More Profit and Less Nursing
by Charles Duhigg, September 23, 2007
"Regulators say residents at these homes have suffered. At facilities owned by private investment firms, residents on average have fared more poorly than occupants of other homes in common problems like depression, loss of mobility and loss of ability to dress and bathe themselves, according to data collected by the Centers for Medicare and Medicaid Services."

Chrysler Group to Be Sold for $7.4 Billion
By Mark Landler and Micheline Maynard, May 15, 2007
"DaimlerChrysler announced today that it will sell a controlling interest in its struggling Chrysler Group to Cerberus Capital Management, a private equity firm that specializes in restructuring troubled companies, for $7.4 billion, mostly in the form of capital that Cerberus will put into Chrysler."

NPR: Chrysler to Go Private
Explore various stories from NPR regarding the purchase of DaimlerChrysler by Cerberus.

Are private buyouts good for the economy?
by Mark Trumbull, CHRISTIAN SCIENCE MONITOR, November 13, 2006
"Hardly a week goes by without more major deals being announced. Meanwhile, the very success of these buyout funds is attracting billions more dollars from investors - raising the prospect of many more buyouts in coming months. In essence, the wealthy are deciding that if you want to make money in stocks, the stock market isn't the place to do it."

Let the bidder beware
THE ECONOMIST, Feb 6th 2007
"The backlash against the private-equity boom is becoming a tad hysterical."

Behind the Buyouts
The site contains a primer on the private equity business, reports on the largest private equity firms and information on recent deals.

More from John Bogle

TIME: 10 Questions for John Bogle
by Barbara Kiviat, September 04, 2005
"He is a hero to investors and a royal pain to money managers. Thirty years ago, John Bogle founded the Vanguard Group and invented the index fund--a low-cost option that revolutionized investing. At 76, he's still an iconoclast, most recently in THE BATTLE FOR THE SOUL OF CAPITALISM, which is coming out this fall (Yale University Press)."

"Enough" by John Bogle (pdf)
Read Bogle's Commencement Speech at Georgetown University MBA Graduates of the McDonough School of Business, upon receiving the Honorary Degree of Doctor of Humane Letters, May 18, 2007

FRONTLINE: Can You Afford to Retire?
PBS FRONTLINE interviews John Bogle about the state of retirement in the nation. You can watch the entire Frontline program online here.

Watch John Bogle on WealthTrack, March 21, 2007

Read an Excerpt from Bogle's THE BATTLE FOR THE SOUL OF CAPITALISM

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