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US Hedge Fund Managers Can Buy Anything, Except Respect

Alec MacGillis, a senior editor at The New Republic, has a fantastic piece in the latest edition about how hedge fund managers’ love for President Obama has turned into blind, spitting hatred. His main argument is that it’s all about feeling disrespected: “[I]t wasn’t just anyone knocking them — it was the president of the … Continued

Alec MacGillis, a senior editor at The New Republic, has a fantastic piece in the latest edition about how hedge fund managers’ love for President Obama has turned into blind, spitting hatred.

His main argument is that it’s all about feeling disrespected:

“[I]t wasn’t just anyone knocking them — it was the president of the United States, notes Eugene Fama, a legendary finance professor at the University of Chicago … ‘Lots of [hedge fund managers] started out poor, and made a huge amount of money, and created thousands and thousands of jobs in the process. They’re used to being the American Dream, and now you have the president who looks at them and sneers at them like they’re bad guys. For all the brashness and bravado that goes with their world, it seems the managers are oddly insecure about their purpose.”

He continued:

“For years, ‘most people in the financial service sector were viewed with enormous, out-of-the-box respect and adulation,’ says [Mr. Obama’s former chief of staff Bill] Daley. … Former House Financial Services Committee Chairman Barney Frank was more scathing:

‘They don’t just want us to represent their interest, they want to be told that what they do is very good. They want to be honored for what they do for society. And Obama has hurt their feelings. Raising their taxes is not simply a blow to their income. It is a blow to their psychic income, a failure to recognize the enormous good they do for the world.’ “

This seems completely right to me. When you make a billion dollars a year, you can buy anything you want — which means that goods and services yield almost no marginal utility. What you crave, then, is what money can’t buy: respect.

Actually, I’ve seen this in action at meetings where financial big wheels and professors mingle. You’d think that the people with the big bucks would be confident; on the contrary, they’re insecure, because they want respect for their minds. And I know for a fact that some of Obama’s big-money early backers were motivated in large part by the lure of being in the inner circle in a way that someone like Hillary Clinton, with her long record and connections, couldn’t offer.

And now Mr. Obama says what anyone paying attention would: that these big-money people were, to some extent, making their money in socially destructive ways — and so they go insane, precisely because in their hearts they know that he’s right.

And because money talks in politics, this pettiness, this display of ego and hurt vanity, may have disastrous consequences.

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