Obama lambastes the "system and the culture" of the un-helping industry. But he is so much a part of -- not apart from -- the very climate he condemns. "Speculators" fill many of the top positions in the Obama White House. Hedge fund manager Larry Summers heads the National Economic Council. White House Chief of Staff Rahm Emanuel made millions as an investment banker at Wasserstein Perella. Vice President Joe Biden's son, Hunter, made a comfy living in the hedge fund business until he got entangled in an ongoing mess with the shady Paradigm Capital Management involving fraud and giant Ponzi schemes.
Yes, there are rotten hedge fund managers who have squandered billions of dollars without accountability -- not unlike the government bailout and stimulus fund managers in Washington, who continue to throw good money after bad. Obama demagogues the unpopular industry because it fits the popular narrative: Wall Street bad, Washington good. Like battered wives, most hedge fund managers who supported Obama have tolerated the abuse, futilely hoping it will stop.
Until this week, that is. In an extraordinarily candid open letter to Obama, hedge fund manager Cliff Asness defended his industry from the president's "backwards and libelous" charges. "Managers have a fiduciary obligation to look after their clients' money as best they can, not to support the president, nor to oppose him, nor otherwise advance their political views," Asness wrote. He has oversight of some $20 billion at AQR Capital Management, LLC, which is not involved in the Chrysler case.
Asness minced no words: "The president's attempted diktat takes money from bondholders and gives it to a labor union that delivers money and votes for him. … Shaking down lenders for the benefit of political donors is recycled corruption and abuse of power."
Business as usual in the Era of Hope and Change. Perhaps demonized entrepreneurs will finally learn that when the dog you feed bites your hand, you don't roll up your sleeve and give him your arm. You get a new dog.
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