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In economics, stagflation is a situation in which the inflation rate is high and the economic growth rate slows down and unemployment remains steadily high. It raises a dilemma for economic policy since actions designed to lower inflation or reduce unemployment may actually worsen economic growth. The portmanteau stagflation is generally attributed to British politician Iain Macleod, who coined the phrase in his speech to Parliament in 1965.^{[1][2][3] [4]}

The concept is notable because, in the version of Keynesian macroeconomic theory which was dominant between the end of WWII and the late-1970s, inflation and recession were regarded as mutually exclusive, the relationship between the two being described by the Phillips curve. Stagflation is also notable because it has generally proven to be difficult and, in human terms as well as budget deficits, very costly to eradicate once it starts.

In the political arena, one measure of stagflation, termed the Misery Index (derived by the simple addition of the inflation rate to the unemployment rate), was used to swing presidential elections in the United States in 1976 and 1980.

Causes[link]

Economists offer two principal explanations for why stagflation occurs. First, stagflation can result when the productive capacity of an economy is reduced by an unfavorable supply shock, such as an increase in the price of oil for an oil importing country. Such an unfavorable supply shock tends to raise prices at the same time that it slows the economy by making production more costly and less profitable.^[5][6][7]

Second, both stagnation and inflation can result from inappropriate macroeconomic policies. For example, central banks can cause inflation by permitting excessive growth of the money supply,^[8] and the government can cause stagnation by excessive regulation of goods markets and labor markets.^[9] Either of these factors can cause stagflation. Excessive growth of the money supply taken to such an extreme that it must be reversed abruptly can clearly be a cause. Both types of explanations are offered in analyses of the global stagflation of the 1970s: it began with a huge rise in oil prices, but then continued as central banks used excessively stimulative monetary policy to counteract the resulting recession, causing a runaway wage-price spiral.^[10]

Postwar Keynesian and monetarist views[link]

Early Keynesianism and monetarism[link]

Up to the 1960s many Keynesian economists ignored the possibility of stagflation, because historical experience suggested that high unemployment was typically associated with low inflation, and vice versa (this relationship is called the Phillips curve). The idea was that high demand for goods drives up prices, and also encourages firms to hire more; and likewise high employment raises demand. However, in the 1970s and 1980s, when stagflation occurred, it became obvious that the relationship between inflation and employment levels was not necessarily stable: that is, the Phillips relationship could shift. Macroeconomists became more skeptical of Keynesian theories, and the Keynesians themselves reconsidered their ideas in search of an explanation of stagflation.^[11]

The explanation for the shift of the Phillips curve was initially provided by the monetarist economist Milton Friedman, and also by Edmund Phelps. Both argued that when workers and firms begin to expect more inflation, the Phillips curve shifts up (meaning that more inflation occurs at any given level of unemployment). In particular, they suggested that if inflation lasted for several years, workers and firms would start to take it into account during wage negotiations, causing workers' wages and firms' costs to rise more quickly, thus further increasing inflation. While this idea was a severe criticism of early Keynesian theories, it was gradually accepted by most Keynesians, and has been incorporated into New Keynesian economic models.

Neo-Keynesianism[link]

Contemporary Keynesian analyses argue that stagflation can be understood by distinguishing factors that affect aggregate demand from those that affect aggregate supply. While monetary and fiscal policy can be used to stabilize the economy in the face of aggregate demand fluctuations, they are not very useful in confronting aggregate supply fluctuations. In particular, an adverse shock to aggregate supply, such as an increase in oil prices, can give rise to stagflation.^[12]

Neo-Keynesian theory distinguished two distinct kinds of inflation: demand-pull (caused by shifts of the aggregate demand curve) and cost-push (caused by shifts of the aggregate supply curve). Stagflation, in this view, is caused by cost-push inflation. Cost-push inflation occurs when some force or condition increases the costs of production. This could be caused by government policies (such as taxes), or from purely external factors such as a shortage of natural resources or an act of war.

Supply theory[link]

Fundamentals[link]

Supply theories^[13] are based on the neo-Keynesian cost-push model and attribute stagflation to significant disruptions to the supply side of the supply-demand market equation, for example, when there is a sudden real or relative scarcity of key commodities, natural resources, or natural capital needed to produce goods and services. Other factors may also cause supply problems, for example, social and political conditions such as policy changes, acts of war, extremely restrictive government control of production (For example monopolizing Dictatorships).^{[citation needed]} In this view, stagflation is thought to occur when there is an adverse supply shock (for example, a sudden increase in the price of oil or a new tax) that causes a subsequent jump in the "cost" of goods and services (often at the wholesale level). In technical terms, this results in contraction or negative shift in an economy's aggregate supply curve.^{[citation needed]}

In the resource scarcity scenario (Zinam 1982), stagflation results when economic growth is inhibited by a restricted supply of raw materials.^[14][15] That is, when the actual or relative supply of basic materials (fossil fuels (energy), minerals, agricultural land in production, timber, etc.) decreases and/or cannot be increased fast enough in response to rising or continuing demand. The resource shortage may be a real physical shortage or a relative scarcity due to factors such as taxes or bad monetary policy which have affected the "cost" or availability of raw materials. This is consistent with the cost-push inflation factors in neo-Keynesian theory (above). The way this plays out is that after supply shock occurs, the economy will first try to maintain momentum — that is, consumers and businesses will begin paying higher prices in order to maintain their level of demand. The central bank may exacerbate this by increasing the money supply, by lowering interest rates for example, in an effort to combat a recession. The increased money supply props up the demand for goods and services, though demand would normally drop during a recession.^{[citation needed]}

In the Keynesian model, higher prices will prompt increases in the supply of goods and services. However, during a supply shock (i.e. scarcity, "bottleneck" in resources, etc.), supplies don't respond as they normally would to these price pressures. So, inflation jumps and output drops, producing stagflation.^{[citation needed]}

Explaining the 1970s stagflation[link]

Following Richard Nixon's imposition of wage and price controls on August 15, 1971, an initial wave of cost-push shocks in commodities was blamed for causing spiraling prices. Perhaps the most notorious factor cited at that time was the failure of the Peruvian anchovy fishery in 1972, a major source of livestock feed.^[16] The second major shock was the 1973 oil crisis, when the Organization of Petroleum Exporting Countries (OPEC) constrained the worldwide supply of oil.^[17] Both events, combined with the overall energy shortage that characterized the 1970s, resulted in actual or relative scarcity of raw materials. The price controls resulted in shortages at the point of purchase, causing, for example, queues of consumers at fueling stations and increased production costs for industry.^[18]

Theoretical responses[link]

Under this set of theories, the solution to stagflation is to restore the supply of materials. In the case of a physical scarcity, stagflation is mitigated either by finding a replacement for the missing resources or by developing ways to increase economic productivity and energy efficiency so that more output is produced with less input. For example, in the late 1970s and early 1980s, the scarcity of oil was relieved by increases in both energy efficiency and global oil production. This factor, along with adjustments in monetary policies, helped end stagflation.^{[citation needed]}

Recent views[link]

Until recently no macroeconomic policy had been able predict the occurrence of Stagflation.

After the fact, and several years of research, a convincing explanation was provided based on the effects of adverse supply shocks on both prices and output.^[19] According to Blanchard (2009), these adverse events were one of two components of stagflation; the other was "ideas", which Robert Lucas (famous for the Lucas Supply Curve), Thomas Sargent, and Robert Barro were cited as expressing as "wildly incorrect" and "fundamentally flawed" predictions [of Keynesian economics] which, they said, left stagflation to be explained by "contemporary students of the business cycle".^[19] In this discussion, Blanchard hypothesizes that the recent oil price increases could trigger another period of stagflation, although this has not yet happened (pg. 152).

Neoclassical views[link]

A purely neoclassical view^[20] of the macroeconomy rejects the idea that monetary policy can have real effects. Neoclassical macroeconomists argue that real economic quantities, like real output, employment, and unemployment, are determined by real factors only. Nominal factors like changes in the money supply only affect nominal variables like inflation. The neoclassical idea that nominal factors cannot have real effects is often called "monetary neutrality"^[21] or also the "classical dichotomy".

Since the neoclassical viewpoint says that real phenomena like unemployment are essentially unrelated to nominal phenomena like inflation, a neoclassical economist would offer two separate explanations for 'stagnation' and 'inflation'. Neoclassical explanations of stagnation (low growth and high unemployment) include inefficient government regulations or high benefits for the unemployed that give people less incentive to look for jobs. Another neoclassical explanation of stagnation is given by real business cycle theory, in which any decrease in labor productivity makes it efficient to work less. The main neoclassical explanation of inflation is very simple: it happens when the monetary authorities increase the money supply too much.^[22]

In the neoclassical viewpoint, the real factors that determine output and unemployment affect the aggregate supply curve only. The nominal factors that determine inflation affect the aggregate demand curve only.^[23] When some adverse changes in real factors are shifting the aggregate supply curve left at the same time that unwise monetary policies are shifting the aggregate demand curve right, the result is stagflation.

Thus the main explanation for stagflation under a classical view of the economy is simply policy errors that affect both inflation and the labor market. Ironically, a very clear argument in favor of the classical explanation of stagflation was provided by Keynes himself. In 1919, John Maynard Keynes described the inflation and economic stagnation gripping Europe in his book The Economic Consequences of the Peace. Keynes wrote:

"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some." [...]

"Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

Keynes explicitly pointed out the relationship between governments printing money and inflation.

"The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance."

Keynes also pointed out how government price controls discourage production.

"The presumption of a spurious value for the currency, by the force of law expressed in the regulation of prices, contains in itself, however, the seeds of final economic decay, and soon dries up the sources of ultimate supply. If a man is compelled to exchange the fruits of his labors for paper which, as experience soon teaches him, he cannot use to purchase what he requires at a price comparable to that which he has received for his own products, he will keep his produce for himself, dispose of it to his friends and neighbors as a favor, or relax his efforts in producing it. A system of compelling the exchange of commodities at what is not their real relative value not only relaxes production, but leads finally to the waste and inefficiency of barter."

Keynes detailed the relationship between German government deficits and inflation.

"In Germany the total expenditure of the Empire, the Federal States, and the Communes in 1919-20 is estimated at 25 milliards of marks, of which not above 10 milliards are covered by previously existing taxation. This is without allowing anything for the payment of the indemnity. In Russia, Poland, Hungary, or Austria such a thing as a budget cannot be seriously considered to exist at all."

"Thus the menace of inflationism described above is not merely a product of the war, of which peace begins the cure. It is a continuing phenomenon of which the end is not yet in sight."

Keynesian in the short run, classical in the long run[link]

While most economists believe that changes in money supply can have some real effects in the short run, neoclassical and neo-Keynesian economists tend to agree that there are no long-run effects from changing the money supply. Therefore, even economists who consider themselves neo-Keynesians usually believe that in the long run, money is neutral. In other words, while neoclassical and neo-Keynesian models are often seen as competing points of view, they can also be seen as two descriptions appropriate for different time horizons. Many mainstream textbooks today treat the neo-Keynesian model as a more appropriate description of the economy in the short run, when prices are 'sticky', and treat the neoclassical model as a more appropriate description of the economy in the long run, when prices have sufficient time to adjust fully.^{[citation needed]}

Therefore, while mainstream economists today might often attribute short periods of stagflation (not more than a few years) to adverse changes in supply, they would not accept this as an explanation of very prolonged stagflation. More prolonged stagflation would be explained as the effect of inappropriate government policies: excessive regulation of product markets and labor markets leading to long-run stagnation, and excessive growth of the money supply leading to long-run inflation.^{[citation needed]}

Alternative views[link]

As differential accumulation[link]

Political economists Jonathan Nitzan and Shimshon Bichler have proposed an explanation of stagflation as part of a theory they call differential accumulation, which says firms seek to beat the average profit and capitalization rather than maximize. According to this theory, periods of mergers and acquisitions oscillate with periods of stagflation. When mergers and acquisitions are no longer politically feasible (governments clamp down with anti-monopoly rules), stagflation is used as an alternative to have higher relative profit than the competition. With increasing mergers and acquisitions, the power to implement stagflation increases.

Stagflation appears as a societal crisis, such as during the period of the oil crisis in the 70s and in 2006 to 2008. Inflation in stagflation, however, doesn't affect all firms equally. Dominant firms are able to increase their own prices at a faster rate than competitors. While in the aggregate no one appears to be profiting, differentially dominant firms improve their positions with higher relative profits and higher relative capitalization. Stagflation is not due to any actual supply shock, but because of the societal crisis that hints at a supply crisis. It is mostly a 20th and 21st century phenomenon that has been mainly used by the "weapondollar-petrodollar coalition" creating or using Middle East crises for the benefit of pecuniary interests.^[24]

Demand-pull stagflation theory[link]

Demand-pull stagflation theory explores the idea that stagflation can result exclusively from monetary shocks without any concurrent supply shocks or negative shifts in economic output potential. Demand-pull theory describes a scenario where stagflation can occur following a period of monetary policy implementations that cause inflation. This theory was first proposed in 1999 by Eduardo Loyo of Harvard University's John F. Kennedy School of Government.^[25]

Supply-side theory[link]

Supply-side economics emerged as a response to US stagflation in the 1970s. It largely attributed inflation to the ending of the Bretton Woods system in 1971 and the lack of a specific price reference in the subsequent monetary policies (Keynesian and Monetarism). Supply-side economists asserted that the contraction component of stagflation resulted from an inflation-induced rise in real tax rates (see bracket creep)^{[citation needed]}

Austrian School of economics[link]

Adherents to the Austrian School maintain that creation of new money ex nihilo benefits the creators and early recipients of the new money relative to late recipients. Money creation is not wealth creation; it merely allows early money recipients to outbid late recipients for resources, goods, and services. Since the actual producers of wealth are typically late recipients, increases in the money supply weakens wealth formation and undermines the rate of economic growth. Says Austrian economist Frank Shostak:

"The increase in the money supply rate of growth coupled with the slowdown in the rate of growth of goods produced is what the increase in the rate of price inflation is all about. (Note that a price is the amount of money paid for a unit of a good.) What we have here is a faster increase in price inflation and a decline in the rate of growth in the production of goods. But this is exactly what stagflation is all about, i.e., an increase in price inflation and a fall in real economic growth. Popular opinion is that stagflation is totally made up. It seems therefore that the phenomenon of stagflation is the normal outcome of loose monetary policy. This is in agreement with [Phelps and Friedman (PF)]. Contrary to PF, however, we maintain that stagflation is not caused by the fact that in the short run people are fooled by the central bank. Stagflation is the natural result of monetary pumping which weakens the pace of economic growth and at the same time raises the rate of increase of the prices of goods and services."^[26]

Responses[link]

Stagflation undermined support for Keynesian consensus. The rise of conservative theories of economics, including monetarism, can be traced to the perceived failure of Keynesian policies to combat stagflation or explain it to the satisfaction of economists and policy-makers.^{[citation needed]}

Federal Reserve chairman Paul Volcker very sharply increased interest rates from 1979-1983 in what was called a "disinflationary scenario." After U.S. prime interest rates had soared into the double-digits, inflation did come down; these interest rates were the highest long-term prime interest rates that had ever existed in modern capital markets.^[27] Volcker is often credited with having stopped at least the inflationary side of stagflation, although the American economy also dipped into recession. Starting in approximately 1983, growth began a recovery. Both fiscal stimulus and money supply growth were policy at this time. A five- to six-year jump in unemployment during the Volcker disinflation suggests Volcker may have trusted unemployment to self-correct and return to its natural rate within a reasonable period.^{[citation needed]}

See also[link]

• Agflation
• Biflation
• Deflation
• Economic stagnation
• Inflation
• Hyperinflation
• Inflationism
• Stagflation in the United States
• ZIRP

Notes[link]

References[link]

Sir Richard Branson
Branson at the Time 100 Gala, 4 May 2010
Born	Richard Charles Nicholas Branson (1950-07-18) 18 July 1950 (age 61) Blackheath, London, England, UK
Residence	London, England
Occupation	Chairman of Virgin Group
Years active	1966–present
Net worth	US$4.2 billion (2011)[1]
Title	Sir
Spouse	Kristen Tomassi (m. 1972–1979) «start: (1972-07-22)–end+1: (1980)»"Marriage: Kristen Tomassi to Richard Branson" Location: (linkback:http://en-wiki.pop.wn.com/index.php/Richard_Branson) (divorced) Joan Templeman (m. 1989) «start: (1989-12-20)»"Marriage: Joan Templeman to Richard Branson" Location: (linkback:http://en-wiki.pop.wn.com/index.php/Richard_Branson)
Children	2 daughters (1 deceased), 1 son

Sir Richard Charles Nicholas Branson (born 18 July 1950) is an English business magnate, best known for his Virgin Group of more than 400 companies.^[2]

His first business venture was a magazine called Student at the age of 16.^[3] In 1970, he set up an audio record mail-order business. In 1972, he opened a chain of record stores, Virgin Records, later known as Virgin Megastores. Branson's Virgin brand grew rapidly during the 1980s, as he set up Virgin Atlantic Airways and expanded the Virgin Records music label.

Branson is the 4th richest citizen of the United Kingdom, according to the Forbes 2011 list of billionaires, with an estimated net worth of US$4.2 billion.^[1]

Early life[link]

Branson was born in Blackheath, London, the son and eldest child of barrister Edward James Branson (10 March 1918 – 19 March 2011)^[4] and Eve Huntley Branson (née Flindt).^[4][5] His grandfather, the Right Honourable Sir George Arthur Harwin Branson, was a judge of the High Court of Justice and a Privy Councillor.^[6] Branson was educated at Scaitcliffe School (now Bishopsgate School)^[7] until the age of thirteen. He then attended Stowe School until the age of sixteen. Branson has dyslexia and had poor academic performance as a student, but later discovered his ability to connect with others.^[8]

Career[link]

Record business[link]

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Branson started his record business from the crypt of a church where he ran The Student. Branson advertised popular records in The Student Magazine and it was an over night success. Trading under the name "Virgin", he sold records for considerably less than the "High Street" outlets, especially the chain W. H. Smith. The name "Virgin" was suggested by one of Branson's early employees because they were all new at business.^[9] At the time, many products were sold under restrictive marketing agreements that limited discounting, despite efforts in the 1950s and 1960s to limit so-called resale price maintenance.^[10] In effect, Branson began the series of changes that led to large-scale discounting of recorded music.

Branson eventually started a record shop in Oxford Street in London. In 1971, Branson was questioned in connection with the selling of records in Virgin stores that had been declared export stock. The matter was never brought before a court and Branson agreed to repay any unpaid tax and a fine. Branson's mother Eve re-mortgaged the family home to help pay the settlement.^[9]

Earning enough money from his record store, Branson in 1972 launched the record label Virgin Records with Nik Powell and bought a country estate, in which he installed a recording studio. He leased out studio time to fledgling artists, including multi-instrumentalist Mike Oldfield, whose debut album Tubular Bells (1973) was Virgin Records' first release and a chart-topping best-seller.

Virgin signed such controversial bands as the Sex Pistols, which other companies were reluctant to sign. It also won praise for exposing the public to such obscure avant-garde music as Faust and Can. Virgin Records also introduced Culture Club to the music world. In the early 1980s, Virgin purchased the gay nightclub Heaven. In 1991, in a consortium with David Frost, Richard Branson had made the unsuccessful bid for three ITV franchisees under the CPV-TV name. The early 1980s also saw his only attempt as a producer—on the novelty record "Baa, Baa, Black Sheep", by Singing Sheep in association with Doug McLean and Grace McDonald. The recording was a series of sheep baaing along to a drum machine produced track and even made the charts at number 42 in 1982.

In 1992, to keep his airline company afloat, Branson sold the Virgin label to EMI for £500 million.^[11] Branson says that he wept when the sale was completed since the record business had been the birth of the Virgin Empire. He later formed V2 Records to re-enter the music business.^[12]

Business ventures[link]

Branson formed Virgin Atlantic Airways in 1984, launched Virgin Mobile in 1999, Virgin Blue in Australia (now named Virgin Australia) in 2000. He was 9th in the Sunday Times Rich List 2006, worth just over £3 billion. Branson wrote in his autobiography of the decision to start an airline:

My interest in life comes from setting myself huge, apparently unachievable challenges and trying to rise above them...from the perspective of wanting to live life to the full, I felt that I had to attempt it.

In 1993, Branson took what many saw as being one of his riskier business exploits by entering into the railway business. Virgin Trains won the franchises for the former Intercity West Coast and Cross-Country sectors of British Rail.

Virgin acquired European short-haul airline Euro Belgian Airlines in 1996 and renamed it Virgin Express. In 2006, the airline was merged with SN Brussels Airlines forming Brussels Airlines. It also started a national airline based in Nigeria, called Virgin Nigeria. Another airline, Virgin America, began flying out of San Francisco International Airport in August 2007. Branson has also developed a Virgin Cola brand and even a Virgin Vodka brand, which has not been a very successful enterprise. As a consequence of these lacklustre performers, the satirical British fortnightly magazine Private Eye has been critical of Branson and his companies (see Private Eye image caption).^[13]

After the so-called campaign of "dirty tricks", British Airways settled the case, giving £500,000 to Branson and a further £110,000 to his airline and had to pay legal fees of up to £3 million. Branson divided his compensation (the so-called "BA bonus") among his staff.^[14]

On 25 September 2004, Branson announced the signing of a deal under which a new space tourism company, Virgin Galactic, will license the technology behind Spaceship One—funded by Microsoft co-Founder Paul Allen and designed by legendary American aeronautical engineer and visionary Burt Rutan—to take paying passengers into suborbital space. Virgin Galactic (wholly owned by Virgin Group) plans to make flights available to the public with tickets priced at US$200,000 using Scaled Composites White Knight Two.

Branson's next venture with the Virgin group is Virgin Fuels, which is set to respond to global warming and exploit the recent spike in fuel costs by offering a revolutionary, cheaper fuel for automobiles and, in the near future, aircraft. Branson has stated that he was formerly a global warming sceptic and was influenced in his decision by a breakfast meeting with Al Gore.^[15]

Branson has been tagged as a "transformational leader" in the management lexicon, with his maverick strategies and his stress on the Virgin Group as an organisation driven on informality and information, one that is bottom-heavy rather than strangled by top-level management.

On 21 September 2006, Branson pledged to invest the profits of Virgin Atlantic and Virgin Trains in research for environmentally friendly fuels. The investment is estimated to be worth $3 billion.^[16][17]

On 4 July 2006, Branson sold his Virgin Mobile company to UK cable TV, broadband, and telephone company NTL/NTL:Telewest for almost £1 billion. The new company was launched with much fanfare and publicity on 8 February 2007, under the name Virgin Media. The decision to merge his Virgin Media Company with NTL was in order to integrate both of the companies' compatible parts of commerce. Branson used to own three quarters of Virgin Mobile, whereas now he owns 15 percent of the new Virgin Media company.^[18]

In 2006, Branson formed Virgin Comics and Virgin Animation, an entertainment company focussed on creating new stories and characters for a global audience. The company was founded with author Deepak Chopra, filmmaker Shekhar Kapur, and entrepreneurs Sharad Devarajan and Gotham Chopra.

Branson also launched the Virgin Health Bank on 1 February 2007, offering parents-to-be the opportunity to store their baby's umbilical cord blood stem cells in private and public stem cell banks.

In June 2006, a tip-off from Virgin Atlantic led US and UK competition authorities to investigate price-fixing attempts between Virgin Atlantic and British Airways. In August 2007, British Airways was fined £271 million over the allegations. Virgin Atlantic was given immunity for tipping off the authorities and received no fine—a controversial decision the Office of Fair Trading defended as being in the public interest.^[19]

On 9 February 2007, Branson announced the setting up of a new Global science and technology prize—The Virgin Earth Challenge—in the belief that history has shown that prizes of this nature encourage technological advancements for the good of mankind. The Virgin Earth Challenge will award $25 million to the individual or group who are able to demonstrate a commercially viable design which will result in the net removal of anthropogenic, atmospheric greenhouse gases each year for at least ten years without countervailing harmful effects. This removal must have long-term effects and contribute materially to the stability of the Earth's climate.

Branson also announced that he would be joined in the adjudication of the Prize by a panel of five judges, all world authorities in their respective fields: Al Gore, Sir Crispin Tickell, Tim Flannery, James E. Hansen, and James Lovelock. The panel of judges will be assisted in their deliberations by The Climate Group and Special Advisor to The Virgin Earth Prize Judges, Steve Howard.

In August 2007, Branson announced that he bought a 20 percent stake in Malaysia's AirAsia X.^[20]

Branson in April 2009 at the launch of Virgin America in Orange County, California

On 13 October 2007, Branson's Virgin Group sought to add Northern Rock to its empire after submitting an offer that would result in Branson personally owning 30% of the company, changing the company's name from Northern Rock to Virgin Money.^[21] The Daily Mail ran a campaign against his bid and Liberal Democrats' financial spokesperson Vince Cable suggested in the House of Commons that Branson's criminal conviction for tax evasion might be felt by some as a good enough reason not to trust him with public money .^[22]

On 10 January 2008, Branson's Virgin Healthcare announced that it would open a chain of health care clinics that would offer conventional medical care alongside homoeopathic and complementary therapies.^[23] The Financial Times reported that Ben Bradshaw, UK's health minister, welcomed the launch. "I am pleased that Virgin Healthcare is proposing to work with GPs to help develop more integrated services for patients."

Plans where GPs could be paid for referring National Health Service (NHS) patients to private Virgin services were abandoned in June 2008. The BMA warned the plan would "damage clinical objectivity", there would be a financial incentive for GPs to push patients towards the Virgin services at the centre.^[24] Plans to take over an NHS Practice in Swindon were subsequently abandoned in late September 2008.^[25]

In February 2009, Branson's Virgin organisation were reported as bidding to buy the former Honda Formula One team. Branson later stated an interest in Formula One but claimed that, before the Virgin brand became involved with Honda or any other team, Formula One would have to develop a more economically efficient and environmentally responsible image. At the start of the 2009 formula one season on 28 March, it was announced that Virgin would be sponsoring the new Brawn GP team.,^[26] with discussions also under way about introducing a less "dirty" fuel in the medium term.^[27] After the end of the season and the subsequent purchase of Brawn GP by Mercedes, Branson invested in an 80% buyout of Manor Grand Prix^[28][29] with the team being renamed to Virgin Racing.

Branson and Tony Fernandes, owner of Air Asia and Lotus F1 Racing, had a bet for the 2010 F1 season where the team's boss should work on the winner's airline for a day dressed as a stewardess. Fernandes escaped as the winner of the bet, as Lotus Racing ended 10th in the championship, while Virgin Racing ended 12th and last.

Branson and Somerset County's Natirar Resort development in New Jersey, on the Natirar Estate, opened in late 2009 with the Ninety Acres Culinary Center. It includes a restaurant run by chef David Felton, cooking school, wine school, working farm, luxury resort and spa. The development, spearheaded by Branson and Bob Wojtowicz, sits on 500 acres which was the former estate of the King of Morocco.^[30]

In 2010 Richard Branson became patron of the UK's Gordon Bennett 2010 gas balloon race, which has 16 hydrogen balloons flying across Europe.^[31]

In April 2010 Branson described the closure of large parts of European airspace owing to volcanic ash as "beyond a joke". Scientists later concluded that serious structural damage to aircraft could have occurred if passenger planes had continued to fly.^[32]

World record attempts[link]

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A 1998 attempt at an around-the-world balloon flight by Branson, Fossett, and Lindstrand ends in the Pacific Ocean on 25 December 1998.

Richard Branson made several world record-breaking attempts after 1985, when in the spirit of the Blue Riband he attempted the fastest Atlantic Ocean crossing. His first attempt in the "Virgin Atlantic Challenger" led to the boat capsizing in British waters and a rescue by RAF helicopter, which received wide media coverage. Some newspapers called for Branson to reimburse the government for the rescue cost. In 1986, in his "Virgin Atlantic Challenger II", with sailing expert Daniel McCarthy, he beat the record by two hours. A year later his hot air balloon "Virgin Atlantic Flyer" crossed the Atlantic.

In January 1991, Branson crossed the Pacific from Japan to Arctic Canada, 6,700 miles (10,800 km), in a balloon of 2,600,000 cubic feet (74,000 m³). This broke the record, with a speed of 245 miles per hour (394 km/h).

Between 1995 and 1998 Branson, Per Lindstrand and Steve Fossett made attempts to circumnavigate the globe by balloon. In late 1998 they made a record-breaking flight from Morocco to Hawaii but were unable to complete a global flight before Bertrand Piccard and Brian Jones in Breitling Orbiter 3 in March 1999.

In March 2004, Branson set a record by travelling from Dover to Calais in a Gibbs Aquada in 1 hour, 40 minutes and 6 seconds, the fastest crossing of the English Channel in an amphibious vehicle. The previous record of six hours was set by two Frenchmen.^[33] The cast of Top Gear, Jeremy Clarkson, James May and Richard Hammond, attempted to break this record in an amphibious vehicle which they had constructed and, while successfully crossing the channel, did not break Branson's record.

In September 2008 Branson and his children made an unsuccessful attempt at an Eastbound record crossing of the Atlantic ocean under sail in the 99 feet (30 m) sloop Virgin Money.^[34] The boat, also known as Speedboat, is owned by NYYC member Alex Jackson, who was a co-skipper on this passage, with Branson and Mike Sanderson. After 2 days, 4 hours, winds of force 7 to 9 (strong gale), and seas of 40 feet (12 m), a 'monster wave' destroyed the spinnaker, washed a ten-man life raft overboard and severely ripped the mainsail. She eventually continued to St. George's, Bermuda.^[35] In March 2010 Richard tried for the world record of putting a round of golf in the dark at the Black Light Mini Golf in The Docklands, Melbourne, Australia. He succeeded in getting 41 on the par 45 course.

Television, film, and print[link]

Branson at the 2008 Toronto International Film Festival.

Branson has guest starred, usually playing himself, on several television shows, including Friends, Baywatch, Birds of a Feather, Only Fools and Horses, The Day Today, a special episode of the comedy Goodness Gracious Me and Tripping Over. Branson made several appearances during the nineties on the BBC Saturday morning show Live & Kicking, where he was referred to as 'the pickle man' by comedy act Trev and Simon (in reference to Branston Pickle).^[36] Branson also appears in a cameo early in XTC's "Generals and Majors" video.

He was also the star of a reality television show on Fox called The Rebel Billionaire: Branson's Quest for the Best (2004), in which sixteen contestants were tested for their entrepreneurship and sense of adventure. It did not succeed as a rival show to Donald Trump's The Apprentice and only lasted one season.

His high public profile often leaves him open as a figure of satire—the 2000 AD series Zenith features a parody of Branson as a super villain, as the comic's publisher and favoured distributor and the Virgin group were in competition at the time. He is also caricatured in The Simpsons episode "Monty Can't Buy Me Love" as the tycoon Arthur Fortune, and as the ballooning megalomaniac Richard Chutney (a pun on Branson, as in Branston Pickle) in Believe Nothing. The character Grandson Richard 39 in Terry Pratchett's Wings is modelled on Branson.

He has a cameo appearance in several films: Around the World in 80 Days (2004), where he played a hot-air balloon operator; Superman Returns, where he was credited as a 'Shuttle Engineer' and appeared alongside his son, Sam, with a Virgin Galactic-style commercial suborbital shuttle at the centre of his storyline. He also has a cameo in the James Bond film Casino Royale. Here, he is seen as a passenger going through Miami Airport security check-in and being frisked – several Virgin Atlantic planes appear soon after. British Airways edited out Branson's cameo in their in-flight screening of the movie.^[37]

He makes a number of brief and disjointed appearances in the cult classic documentary Derek and Clive Get the Horn which follows the exploits of Peter Cook and Dudley Moore recording their last comedy album. Branson and his mother were also featured in the documentary film, Lemonade Stories. In early 2006 on Rove Live, Rove McManus and Sir Richard pushed each other into a swimming pool fully clothed live on TV during a "Live at your house" episode.

Branson is a Star Trek fan and named his new spaceship VSS Enterprise in honour of the famous Star Trek ships, and in 2006, reportedly offered actor William Shatner a ride on the inaugural space launch of Virgin Galactic. In an interview in Time magazine, 10 August 2009, Shatner claimed that Branson approached him asking how much he would pay for a ride on the spaceship. In response, Shatner asked "how much would you pay me to do it?"

In August 2007, Branson announced on The Colbert Report that he had named a new aircraft Air Colbert. He later doused political satirist and talk show host Stephen Colbert with water from his mug. Branson subsequently took a retaliatory splash from Colbert. The interview quickly ended, with both laughing^[38] as shown on the episode aired on Comedy Central on 22 August 2007. The interview was promoted on The Report as the Colbert-Branson Interview Trainwreck. Branson then made a cameo appearance on The Soup playing an intern working under Joel McHale who had been warned against getting into water fights with Stephen Colbert, and being subsequently fired.

In March 2008 he launched Virgin Mobile in India and during that period, he even played a cameo performance in Bollywood film, London Dreams.^[39]

In July 2010, Branson narrated Australian sailor Jessica Watson's documentary about her solo sailing trip around the world. It premiered on ONEHD on 16 August 2010.

In April 2011 Branson appeared on CNN's Mainsail^[40] with Kate Winslet. Together they reenacted a famous scene^[41] from the 1997 film Titanic for the cameras. On 17 August 2011, he was featured in the premier episode of Hulu's first long-form original production entitled, A Day in the Life.^[42]

Activism[link]

Humanitarian initiatives[link]

In the late 1990s, Branson and musician Peter Gabriel discussed with Nelson Mandela their idea of a small, dedicated group of leaders, working objectively and without any vested personal interest to solve difficult global conflicts.^[43]

On 18 July 2007, in Johannesburg, South Africa, Nelson Mandela announced the formation of a new group, The Elders, in a speech he delivered on the occasion of his 89th birthday. The founding members of this group are Desmond Tutu, Graça Machel, Kofi Annan, Ela Bhatt, Gro Harlem Brundtland, Jimmy Carter, Li Zhaoxing, Mary Robinson, and Muhammad Yunus.^[43] The Elders is independently funded by a group of "Founders", including Branson and Gabriel.

Desmond Tutu serves as the chair of The Elders—who will use their collective skills to catalyse peaceful resolutions to long-standing conflicts, articulate new approaches to global issues that are causing or may cause immense human suffering, and share wisdom by helping to connect voices all over the world. They will work together over the next several months to carefully consider which specific issues they will approach.

Branson's other work in South Africa includes the Branson School of Entrepreneurship, set up in 2005 as a partnership between Virgin Unite, the non-profit foundation of Virgin, and entrepreneur Taddy Bletcher, the founder of CIDA City Campus, a university in Johannesburg. The school aims to improve economic growth in South Africa by supporting start-ups and micro-enterprises with skills, mentors, services, networks and finance arrangements.^[44] Fundraising activity to support the school is notably achieved by the Sunday Times Fast Track 100, sponsored by Virgin Group, at its yearly event, where places to join Richard Branson on trips to South Africa to provide coaching and mentoring to students are auctioned to attendees. In 2009, Jason Luckhurst and Boyd Kershaw of Practicus, Martin Ainscough of the Ainscough Group and Matthew Riley of Daisy Communications helped raise £150,000 through the auction.^[45]

In September 2007, Richard Branson chaired the jury of the first Picnic Green Challenge, a €500,000 award for best new green initiative, set up by the Dutch "Postcode Loterij" (postcode lottery) and the PICNIC Network of creative professionals. The first Green Challenge was won by Qurrent with the Qbox.

Branson was the first celebrity guest for the popular charity fund raisers, Reserve Dinners, raising over $75,000 in one evening towards his Virgin Unite charity.^[46]

In March 2008, Richard Branson hosted an environmental gathering at his private island, Necker Island, in the Caribbean with several prominent entrepreneurs, celebrities, and world leaders. They discussed global warming-related problems facing the world, hoping that this meeting will be a precursor to many more future discussions regarding similar problems. Former British Prime Minister Tony Blair, Wikipedia co-founder Jimmy Wales, and Larry Page of Google were in attendance.^[47]

Branson has been very supportive of Kenya during its troubles, and in May 2008 had gone to Masai Mara to open a new school (Sekenani Primary School) which has also been partly funded by Virgin Atlantic frequent flyers who volunteered their time to help with the construction. A documentary of the experience was directed by Carolyn Scott-Hamilton and filmed by David Collupy.

On 8 May 2009, Branson took over Mia Farrow's hunger strike in protest of the Sudanese government expulsion of aid groups from the Darfur region.^[48] He concluded his scheduled 3-day fast on 11 May. Later that year, he joined the project Soldiers of Peace, a movie against all wars and for a global peace.^[49][50]

Richard Branson is a signatory of Global Zero (campaign), a non-profit international initiative for the elimination of all nuclear weapons worldwide.^[51] Since its launch in Paris in December 2008,^[52] Global Zero (campaign) has grown to 300 leaders, including current and former heads of state, national security officials and military commanders, and 400,000 citizens worldwide; developed a practical step-by-step plan to eliminate nuclear weapons; launched an international student campaign with 75 campus chapters in eight countries; and produced an acclaimed documentary film, Countdown to Zero, in partnership with Lawrence Bender and Participant Media.^[53]

Since 2010, Branson has served as a Commissioner on the Broadband Commission for Digital Development, a UN initiative which promotes universal access to broadband services.^[54]

In 2011, Branson served on the Global Commission on Drug Policy with former political and cultural leaders of Latin America and elsewhere, "in a bid to boost the effort to achieve more humane and rational drug laws."^[55]

Politics[link]

In the 1980s, he was briefly given the post of "litter Tsar" by Margaret Thatcher—charged with "keeping Britain tidy".^[56][57] In 2005 he declared that there were only negligible differences between the two main parties on economic matters.^[58] He has frequently been mentioned as a candidate for Mayor of London, and polls have suggested he would be a viable candidate, though he has yet to express interest.^[59][60][61]

Business practices[link]

Branson's business empire is owned by a complicated series of offshore trusts and companies. The Sunday Times stated that his wealth is calculated at £3.065 billion; if he were to retire to his Caribbean island and liquidate all of this, he would pay relatively little in tax.^[62]

Honours and awards[link]

In 1993, Branson was awarded an honorary degree of Doctor of Technology from Loughborough University.

In the New Years Honours list dated 30 December 1999, HM The Queen signified her intention to confer the honour of Knight Bachelor on him for his "services to entrepreneurship".^[63][64] He was knighted by HRH The Prince of Wales on 30 March 2000 at an investiture in Buckingham Palace.^[65]

Also in 2000, Branson received the 'Tony Jannus Award' for his accomplishments in commercial air transportation.

Branson is the patron of several charities, including the International Rescue Corps and Prisoners Abroad, a registered charity which supports Britons who are detained outside of the UK.

Branson appears at No. 85 on the 2002 list of "100 Greatest Britons" (sponsored by the BBC and voted for by the public). Branson was also ranked in 2007's Time Magazine "Top 100 Most Influential People in the World". In 2009, Branson was voted the UK's "Celebrity Dream Boss" in an opinion poll by Cancer Research UK.^[66]

On 7 December 2007, United Nations Secretary General Ban Ki-Moon presented Branson with the United Nations Correspondents Association Citizen of the World Award for his support for environmental and humanitarian causes.^[67]

On 24 January 2011, Branson was awarded the German Media Prize (organised by "Media Control Charts" ), previously handed to former U.S. president Bill Clinton and the Dalai Lama.

On 14 November 2011, Branson was awarded the ISTA Prize by the International Space Transport Association in The Hague for his pioneering achievements in the development of suborbital transport systems with "Virgin Galactic".^[68]

On February 11, 2012, Branson was honoured with the National Academy of Recording Arts and Sciences' President's Merit Award for his contributions to the music industry. The event took place the night before the 54th Grammy Awards. ^[69]

Personal life[link]

He stated in an interview with Piers Morgan that he and wife Joan had a daughter named Clare Sarah who died when she was just four days old in 1979.^[70] The couple wed—at their daughter Holly's suggestion when she was eight years old—in 1989 at Necker Island, a 74-acre (30 ha) island in the British Virgin Islands that Branson owns.^[71] He also owns land on the Caribbean Islands of Antigua and Barbuda. Holly Branson is now a doctor and is a keen supporter of the football team Oxford United.^{[72][dead link]}

In 1998, Branson released his autobiography, titled Losing My Virginity, an international bestseller.^[73]

Branson was deeply saddened by the disappearance of fellow adventurer Steve Fossett in September 2007; and, the following month, he wrote an article for Time magazine, titled "My Friend, Steve Fossett".^[74]

Influences[link]

Branson has stated in a number of interviews that he derives much influence from non-fiction books. He most commonly names Nelson Mandela's autobiography, Long Walk to Freedom, explaining that Mandela is "one of the most inspiring men I have ever met and had the honour to call my friend." Owing to his interest in humanitarian and ecological issues, Branson also lists Al Gore's best-selling book, An Inconvenient Truth and The Revenge of Gaia by James Lovelock amongst his favourites. According to Branson's own book, Screw It, Let's do It. Lessons in Life, he is also a huge fan of works by Jung Chang.^[75]

See also[link]

• Virgin Group
• Virgin Earth Challenge
• List of Richard Branson's business ventures

Notes[link]

References[link]

• Branson, Richard. Losing My Virginity: How I've Survived, Had Fun, And Made a Fortune Doing Business My Way, 1999, Three Rivers Press. ISBN 0-8129-3229-3
• Branson, Richard. Losing My Virginity, Revised Edition First Published in Great Britain by Virgin Books Limited, London, 2002
• Branson, Sir Richard and Prescott, Colin. To the Edge of Space: The Adventures of a Balloonist, 2000, Box tree. ISBN 0-7522-1865-4
• Branson, Sir Richard. Sir Richard Branson, the Autobiography, 2002, Longman. ISBN 0-582-51224-7
• Branson, Sir Richard. Losing my virginity: The autobiography, 2005, ISBN 0-7535-1020-0
• Bower, Tom. Branson, 2001, ISBN 1-84115-400-8
• Branson, Sir Richard. Screw It, Let's Do It: Lessons in Life, 2006, ISBN 0-7535-1099-5
• Branson, Sir Richard. Screw It, Let's Do It Expanded: Lessons in Life and Business, 2007, ISBN 0-7535-1149-7
• Specter, Michael. "Profiles: Branson's Luck". The New Yorker, 14 May 2007, pp. 114–25.

Bibliography[link]

• Branson, Richard (8 December 2011). Screw Business As Usual. Penguin Group. ISBN 978-1-59184-434-1. 

• Branson, Richard (3 June 2010). Reach for the Skies: Ballooning, Birdmen and Blasting Into Space. Virgin Books. ISBN 978-1-905264-91-9. 

• Branson, Richard (2 July 2009). Business Stripped Bare. Virgin Books. ISBN 978-0-7535-1503-7. 

• Branson, Richard (29 March 2007). Screw It, Let's Do It. Virgin Books. ISBN 978-0-7535-1149-7. 

External links[link]

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More spoken articles

• Branson's autobiography on virgin.com
• Richard Branson at TED Conferences
• Richard Branson on Charlie Rose
• Richard Branson collected news and commentary at The New York Times
• Works by or about Richard Branson in libraries (WorldCat catalog)
• Branson's interview on India Infoline
• Gonzo Way of Branding Fast Company magazine article on Branson
• Lemonade Stories, a documentary film featuring Branson and his mother, Eve Branson.
• Profile on BBC News dated 27 September 2004
• Interview on BBC World Service 24 November 2006
• Video of Branson speaking at the 2007 Aspen Ideas Festival, 5 July 2007
• Entrepreneur Spotlight: Richard Branson
• Branson at Global Zero

Warren Buffett
Buffett speaking to students from the University of Kansas School of Business, May 6, 2005
Born	Warren Edward Buffett (1930-08-30) August 30, 1930 (age 81) Omaha, Nebraska, U.S.
Nationality	American
Alma mater	University of Pennsylvania University of Nebraska–Lincoln Columbia University
Occupation	Chairman & CEO of Berkshire Hathaway
Years active	1951–present
Salary	US$100,000[1]
Net worth	US$ 44 billion (2012)[2]
Religion	None (Agnostic [3])
Spouse	Susan Thompson Buffett (1952–2004) Astrid Menks (2006–present)[4]
Children	Susan Alice Buffett Howard Graham Buffett Peter Andrew Buffett
Signature

Warren Edward Buffett (/ˈbʌfɨt/; born August 30, 1930) is an American business magnate, investor, and philanthropist. He is widely considered the most successful investor of the 20th century. He is the primary shareholder, chairman and CEO of Berkshire Hathaway.^[5] He is consistently ranked among the world's wealthiest people. He was ranked as the world's wealthiest person in 2008^[6] and is the third wealthiest person in the world as of 2011.^[7] In 2012, American magazine Time named Buffett one of the most influential people in the world.^[8]

Buffett is called the "Wizard of Omaha", "Oracle of Omaha"^[9], or the "Sage of Omaha"^[10] and is noted for his adherence to the value investing philosophy and for his personal frugality despite his immense wealth.^[11] Buffett is also a notable philanthropist, having pledged to give away 99 percent^[12] of his fortune to philanthropic causes, primarily via the Gates Foundation. On April 11, 2012, he was diagnosed with prostate cancer.^[13]

Early life[link]

Buffett was born in 1930 in Omaha, Nebraska, the second of three children and only son of U.S. Representative Howard Buffett,^[14] a fierce critic of the interventionist New Deal domestic and foreign policy, and his wife Leila (née Stahl). Buffett began his education at Rose Hill Elementary School in Omaha. In 1942, his father was elected to the first of four terms in the United States Congress, and after moving with his family to Washington, D.C., Warren finished elementary school, attended Alice Deal Junior High School, and graduated from Woodrow Wilson High School in 1947, where his senior yearbook picture reads: "likes math; a future stock broker."^[15]

Even as a child, Buffett displayed an interest in making and saving money. He went door to door selling chewing gum, Coca-Cola, or weekly magazines. For a while, he worked in his grandfather's grocery store. While still in high school he was successful in making money by delivering newspapers, selling golfballs and stamps, and detailing cars, among other means. Filing his first income tax return in 1944, Buffett took a $35 deduction for the use of his bicycle and watch on his paper route.^[16] In 1945, in his sophomore year of high school, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in the local barber shop. Within months, they owned several machines in different barber shops.

Buffett's interest in the stock market and investing also dated to his childhood, to the days he spent in the customers' lounge of a regional stock brokerage near the office of his father's own brokerage company. On a trip to New York City at the age of ten, he made a point to visit the New York Stock Exchange. At the age of 11, he bought three shares of Cities Service Preferred for himself, and three for his sister.^[17][18] While in high school he invested in a business owned by his father and bought a farm worked by a tenant farmer. By the time he finished college, Buffett had accumulated more than $90,000 in savings measured in 2009 dollars.

Buffett entered college as a freshman in 1947 at the Wharton Business School of the University of Pennsylvania and studied there for two years from 1947 to 1949. In the year 1950, when he entered his junior year, he transferred to the University of Nebraska–Lincoln where at the age of nineteen, he graduated with a Bachelor of Science in business administration. After the completion of his undergraduate studies, Buffett enrolled at Columbia Business School after learning that Benjamin Graham (author of "The Intelligent Investor" – one of his favorite books on investing) and David Dodd, two well-known securities analysts, taught there. He earned a Master of Science in economics from Columbia in 1951. Buffett also attended the New York Institute of Finance. In Buffett's own words:

Business career[link]

Warren Buffett was employed from 1951–54 at Buffett-Falk & Co., Omaha as an investment salesman, from 1954–1956 at Graham-Newman Corp., New York as a securities analyst, from 1956–1969 at Buffett Partnership, Ltd., Omaha as a general partner and from 1970 – Present at Berkshire Hathaway Inc, Omaha as its Chairman, CEO.

In 1950, at the age of 20, Buffett had made and saved $9,800 (over $120,000 inflation-adjusted). In April 1952, Buffett discovered Graham was on the board of GEICO insurance. Taking a train to Washington, D.C. on a Saturday, he knocked on the door of GEICO's headquarters until a janitor allowed him in. There he met Lorimer Davidson, Geico's Vice President, and the two discussed the insurance business for hours. Davidson would eventually become Buffett's life-long friend and a lasting influence^[21] and later recall that he found Buffett to be an "extraordinary man" after only fifteen minutes. Buffett graduated from Columbia and wanted to work on Wall Street, however, both his father and Ben Graham urged him not to. He offered to work for Graham for free, but Graham refused.^[22]

Buffett returned to Omaha and worked as a stockbroker while taking a Dale Carnegie public speaking course.^[23] Using what he learned, he felt confident enough to teach an "Investment Principles" night class at the University of Nebraska-Omaha. The average age of his students was more than twice his own. During this time he also purchased a Sinclair Texaco gas station as a side investment. However, this did not turn out to be a successful business venture.

In 1952^[24] Buffett married Susan Thompson at Dundee Presbyterian Church and the next year they had their first child, Susan Alice Buffett. In 1954, Buffett accepted a job at Benjamin Graham's partnership. His starting salary was $12,000 a year (approximately $105,000 adjusted to 2012 dollars). There he worked closely with Walter Schloss. Graham was a tough man to work for. He was adamant that stocks provide a wide margin of safety after weighting the trade-off between their price and their intrinsic value. The argument made sense to Buffett but he questioned whether the criteria were too stringent and caused the company to miss out on big winners that had more qualitative values.^{[citation needed]} That same year the Buffetts had their second child, Howard Graham Buffett. In 1956, Benjamin Graham retired and closed his partnership. At this time Buffett's personal savings were over $174,000 ($1.2 million inflation adjusted to 2009 dollars) and he started Buffett Partnership Ltd., an investment partnership in Omaha.