Friday, November 14, 2008

Tell Congress to "Kiss My Ass" Mr. Hedge Fund Manager

I ask your forgiveness for linking to a Dana Milbank piece, but it offers a teachable moment. Yesterday, an officious House Committee hauled a few hedge fund managers up before them to put them on the griddle about many things, mostly how much money they make and the horror of the fact that their compensation comes at a rate substantially below some in the middle class (the benefit of taking one's compensation largely in capital gains rather than regular income--or what we know here as the "Warren Buffet Plan").

Just once...just once I tell ya, I'd like to see one of these guys say to the self-important preeners attempting to belittle them, the following:

"Yes, I make a lot of money. No--to say it is a lot of money is probably an understatement. I make a whole lot of money. I make a lot of money because the decisions I make in the open market create wealth for those who trust me with their investments. When they win, I win. I don't do this for free, so yes, I even win a little when they lose. I do so, however, within the laws of this nation as properly understood, laws that are created and modified within this room and others like it in this city. I do so under the watchful eye of regulators that this body chooses to create--or not create. I pay taxes under a system of rates that is controlled by this body. Everything I do is legal and above board. If you wish to tax me at a higher rate, it is your job to do so. If you wish to tax capital at the rate of regular income, this is your decision. I would tend to disagree, as I believe that such a scheme has shown in the past its negative impact on investment and growth. But my disagreement is not relevant here. This is your place, where your opinions hold sway, where your decisions ultimately find purchase. But if it is your desire to haul me up here for some kind of public humiliation ceremony fueled by class warfare and envy, you will do so next time only under the pain of a subpoena. Quite frankly, I am tired of being a part of this elaborate show in which you strike a moral pose by questioning publicly my success in entirely legal conduct. The irony of this body striking a moral pose on ANYTHING is not lost on me, and I hope some of your more insightful observers. Moral conduct for me is to go to work every single day and make as much money as I possibly can; this means that those who trust me with their money are going to make as much money as they can. It is really a simple arrangement, a moral one."

Yep. That's what I'd like to see. Maybe some hedge fund will hire me.....

5 comments:

Anonymous said...

I don't know the managers that appeared before Congress yesterday and i am not an expert in their financial field. AND i full agree that the body and some of the individuals that grilled them have some major flaws of its own.
With that said..... in your meritocracy you are probably spot on. However, to suggest that we all gain when they gain is simplistic and not true. Somebody loses.... there are haves and have nots. Our liberal government is responsible for ensuring rights - if not a level playing field to some degree for all. Have these individuals unfairly played the syste? I hope that is what is being determined during these hearings.
They may not be guilty of breaking laws – However, I pray those laws are being drafted now and will take time to perfect and implement. During that same period they and their ilk will develop work arounds to game the system in other way. You are correct --their judgment will not happen on this earth, but it will happen. Joe

Anonymous said...

Be interesting to analyze their treatment of George Soros as compared to the other 4 fund managers they hauled into thier star chamber.

H. Reardon said...

Joe. Please elaborate more on how exactly the have nots lose because of this arrangement. I have some ideas about how this is explained, but would like to hear your explanation as you made the assertion.

I would like to point out that a subset of those haves and have nots are the dids and did nots.

Dan said...

A wise man once said, "I don't make the rules, I only exploit them."

Anonymous said...

H Reardon, not sure if you will ever read this entry; if you do, please respond and i will elaborate. Specifically how the actions of hedge fund managers hurt the have nots the most? JOBS - companies that are over leveraged collapse; unemployment increases and the impact on the have nots is significantly more damaging, proportionality -- folks without as much are losing a larger share of their net worth. Will write more when/if you respond... Joe

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