ADVERTISEMENTS

Greetings from beautiful Breckenridge. As some of you already know, I like David Brooks as much as most other liberals reading the NYT.  Today's column, though, didn't work entirely. In it, Brooks divides the world between charming princes who siphon off resources from the public fisc on the one hand and the boorish grinds, on the other hand, ie., those awkward introverted nerds who are responsible for the new businesses or techniques that lead to surges in growth and productivity. The blooper in the piece is that Brooks lumps hedge fund managers into the category of grinds who eschew rent-seeking activity at the corrupted crossroads of markets and politics. He writes:

"The princes can thrive while the government intervenes in the private sector. They?ve got the lobbyists and the connections. The grinds, needless to say, don?t. Over the past decade, professionals ? lawyers, regulators and legislators ? have inserted themselves into more and more economic realms. The princes are perfectly at home amid these tax breaks, low-interest loans and public-private partnerships. They went to the same schools as the professionals and speak the same language. The grinds try to stay far away and regard the interlocking network of corporate-government schmoozing with undisguised contempt."

If this were true, it wouldn't explain the success of the 2 and 20 crowd in lining their pockets.

 A few months ago there was a piece in the New Yorker by James Surowiecki  that clearly explains the way in which hedge fund managers have managed (ie., lobbied) to ensure that billions of dollars of their income are treated instead as capital gains (and thus taxed at the lower rate). Most folks seem to think this is an asinine policy. If you're a lawyer or investment banker, your income from your occupation is taxed at the regular rates. But if you're a hedge fund manager, much of your income is instead treated as capital gains. Now, I'm plainly not a finance maven but if the characterization of the cushy relationship between hedge funds and the politicians in DC is correct, then it doesn't make sense for Brooks to valorize the hedge fund managers for their lack of politesse, let alone a contempt for well-distributed largesse in the form of political donations.

Bloggers, promote your law blog by nominating your blog for inclusion in USLaw.com's Law Blog Directory and RSS Reader. Benefits described.