A Center reporter recently spent some time with a friend from high school who had gone to Columbia University and from there to Wall Street and, ultimately, to management of a hedge fund. The hedge fund manager had retired “early” as a multi-millionaire “master of the universe.”
Strangely, after a couple of days of somewhat intense political/business discussions, it was apparent to our reporter that his Wall Street friend had no more idea as to what stock or company would do well than the reporter or anyone else. What our “master of the universe” did know, however, was the phone numbers of his Ivy League friends and classmates who were high officers in government and business and who had access to inside information the rest of us lack.
And so we see a hedge fund financial wizard who engineered billions in profits from the issuance of collateralized debt obligations (CDO’s) testify in federal court that he is “not sure” what the industry-wide acronym CDO stands for.
And the Fed continues to pump $85 billion a month into this sewer.
From the Center:
You can learn a lot by reading the papers two days in a row. On Sunday, June 9, the NY Post reported that “Homeless-housing” nonprofit businesses are “booming.” These so-called “nonprofits” deliver huge profits to their politically connected crony capitalist operators.
Yet on Monday, June 10, the Post reported that the NYC Housing Authority is “cash-strapped” due to the dreaded federal sequestration “cuts.”
Governor Cuomo’s latest crony capitalism scheme, called the “Tax-free Communities” bill, adheres to the progressives long-time political strategy.
According to Cuomo’s Bill Memo, it would allow favored entities, primarily public universities under state control, to “bring [business] ventures to these communities by offering new businesses and expanding businesses that create net new jobs the opportunity to operate completely tax-free – including no income tax for employees, no sales, property or business tax while partnering with higher education institutions.”
If tax-free zones are beneficial to communities then why not apply such policies state-wide? It’s really very simple. Legislation and tax policies which provide benefits to all citizens yield fewer votes, political contributions and favors to Democrats than “targeted” proposals. The Democrat guiding principle is to divide us into groups, and then to threaten punishment to certain groups while offering rewards to others.
Despite the Democrats incessant bleating about “fairness,” unequal treatment of both groups and individuals is essential to Democrat electoral success. Envy and anger are the keys to Democrat hope and change.
Detroit Free Press:
Washington — The U.S. Treasury said Wednesday it plans to sell 30 million additional shares of General Motors stock in a new public offering in conjunction with GM’s return to the S&P 500 index on Thursday . . . The Treasury, which initially held 60.8 percent of GM as part of the U.S. $49.5 billion bailout, now owns just 16.4 percent, or 241.7 million shares. In December, the Treasury sold GM 200 million shares of its stake for $5.5 billion to reduce its stake to 300 million shares.
In total, Treasury has recouped $30.6 billion. At current trading prices, Treasury would lose around $10 billion on its GM bailout.
Representative Paul Ryan:
“Free enterprise doesn’t reward greed,” said Ryan. “It rewards value — because competition checks greed. And there’s no greater opportunity for greed than government cronyism. Greed knows how to exploit the books of regulations and the whims of bureaucrats. It knows how to navigate the halls of power. So if we’re concerned about greed, we shouldn’t give it more opportunities to grow.”