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Hedge honchos & bonus babies should just shut the fund up

Date: Monday, September 27, 2010
Author: Terry Keenan, New York Post

When the history of the Great Recession is written, one of the standout points of this era will be that the New York City economy, the epicenter of the toxic concoctions, escaped relatively unscathed.

Walk around the city this balmy September and it feels exactly the same as it did in September 2006 or 2007. Restaurants are teeming with diners. Taxis are hard to come by for the first time since the financial crisis began.

The trickle-down effect has helped the city's economy and kept real-estate prices aloft.

But not far from the renewed hum of Wall Street is the very real notion that trillions in taxpayer bailouts made this all possible.


That's why the pillars of the hedge-fund and private-equity industries, should just shut up and count their blessings, especially as the overall economy has stalled.

An example of what not to do was on full display this week when Anthony Scaramucci, a hedge-fund honcho, challenged President Obama during his town hall meeting. Trying to piggyback on the ire within Corporate America about the administration's overtly anti-business bias, Scaramucci asked why "Wall Street" was being hit like a piñata. "Maybe you don't feel like you're whacking us with a stick, but we certainly feel like we've been whacked with a stick."

Obama was correct when he scolded Scaramucci with this response. "After a huge crisis, the top 25 hedge-fund managers took home a billion dollars [each] in income that year. A billion! That's the average for the top 25. The secretary of a hedge fund is probably being taxed at 25 percent, 28 percent, right? And [the hedge-fund managers] are being taxed at 15 percent."

The translation of what Obama was saying: "Maybe you should be taxed more like your secretary when you're pulling home a billion dollars or $100 million dollars a year, I don't think I'm being extremist or anti-business."

Yes, the bull market in Wall Street arrogance has returned and is on its way to new highs. Let's hope it doesn't take another crisis to bring these egos down to earth.