Obama chief Rahm Emanuel is hedge funds' pal
Obama chief of staff Rahm Emanuel got more money than any other Congressman from hedge funds, and worked to keep taxes on their fat fees low, says HedgeWeek.
Obama chief of staff-designate Rahm Emanuel, who's been an Illinois congressman, Democratic Party House leader,Wall Street investment banker (Wasserstein Perella), Clinton aide, and director of the failed mortgage-lending federal-bailout giant Freddie Mac, is also a loyal ally of the troubled, highly-paid hedge fund industry, and has worked to keep taxes on their fat fees low, writes HedgeWeek admiringly.
Emanuel "was the top House recipient in the House of Representatives of campaign contributions from hedge funds, private equity firms and the wider securities and investment industry during the 2008 election cycle. He played a part in derailing efforts last year to have carried interest taxed as income rather than capital gains, going so far as to write a memo offering several options on how essentially to preserve the tax advantage. However, he also sponsored a bill that would have prevented hedge fund managers from deferring taxes on offshore compensation.
"The appointment of Emanuel suggests that Obama's presumed hostility to the hedge fund industry may have been exaggerated and that the sector will get a fair hearing as the new administration begins the process of reforming US financial sector regulation. At a time when hedge fund managers feel particularly friendless, it cannot hurt to have someone who understands their business in the heart of the White House." Full story (it's not much longer) here.
Hedge funds are the favorite investment of Harvard, Yale, Princeton, and the Pennsylvania State Employees' Retirement System. They've been mauled in the market lately, though not so badly as stocks, maybe: Hedge funds, like private equity, have done a good job convincing their clients to cover up actual losses for the next few months, in hopes they'll snap back. But if they do need a protector on high, they'll no doubt call on Emanuel, his energy, his connections, and his potty mouth.