Wednesday, February 14, 2007

This Man Loves Hedge Funds. Really.

Ever since The Washington Post morphed from pseudo-liberal to neoconservative, it started adding some truly awful pundits. Among the worst was the Brit spoiled Fauntleroy, Sebastian Mallaby. This wanker has given us some wonderful excuses on why it would be beneficial for the United States to assume the Victorian mantle of the British empire yada yada -- at least he's more honest at preferring global dominance than some of his colleagues.
But in the Jan.-Feb. Foreign Affairs, Mallaby has outdone himself, arguing against any regulation of hedge funds. Some of his points on the self-regulation of hypercapitalism may have merit, but he never addresses the central moral problem of hedge funds and super-wealth -- that it is simply wrong for any individual, even a mathematical genius, to make hundreds of millions of dollars a year. Hedge fund managers accumulate much greater personal wealth than investment bank partners or Silicon Valley CEOs, and Mallaby doesn't have a problem with that. Yes, the most obvious problem with hedge funds is the ones that go bad, like Long Term Capital Management and Amaranth Advisors, but the more insidious (and obvious) problem is that at a time of growing income disparity, it is simply wrong for anyone to make that much money from global flows of capital. And Mallaby is morally bankrupt for not recognizing that.
CORRECTION: As of two weeks ago, Mallaby has left the WP to join the Council on Foreign Relations as head of the Greenberg Center of Geoeconomic Studies. Heaven help us all. And thanks to Doug Henwood for pointing this out.

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