The Money Culture*
In Slate,
Daniel Gross writes about the influx of former Washingtonians into the world of hedge funds....
Now there's a new business for the over-the-hill Washington player: hedge funds.Richard Breeden, former SEC chair, and Madeleine Albright are both starting hedge funds. And, of course, former Treasury secretaries John Snow and Lawrence Summers joined hedge funds on the same day. Why would Albright and Summers want to get in on hedge funds? Well, greed, obviously.
K Street can make you comfortable. Hedge funds can make you filthy rich.
After all, they're not going to be involved in intellectual work of the funds. They're going to be knocking on doors, soliciting investors. Selling their access.
Madeleine Albright and Larry Summers have no record of generating above-market returns. Why would a hedge fund want them?Because, Gross writes, they open doors, especially overseas. (He misses an obvious point with Summers, which is that his Treasury and political connections could come in very handy if the Treasury department is considering new regulations of the largely unregulated hedge fund world.)
Who better to take along on forays into new markets than former treasury secretary, Harvard University president, and current Financial Times columnist Larry Summers?
Gross misses another point, which I think is important: In the past, such brazen flogging of political connections in the world of international business was largely—not entirely, but largely—the domain of Republicans such as James Baker and Henry Kissinger. In making the Democratic party friendly for business, Bill Clinton also made it possible for himself and his former underlings to cash in...even if it means selling out.
Meanwhile, what Democrats are left who can speak for the poor and middle class?
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Since my occasional observations on the world of finance have prompted terrific responses—and frequently vociferous disagreement—I'm going to keep writing them under the rubric, "The Money Culture...."
