There’s a lot of bitching and moaning going on, of late, about how hedge fund mangers like James Simons and private equity giants like (OXYMORON ALERT:) Stephen Schwarzman* make too much money. But bitching and moaning on their own only go so far, which is why, every once in a while, there has to be a report that gives a little weight to the “it isn’t fair” argument that Schwarzman earned one hundred billion dollars last year and our compensation is one belly rub per post (and a scratch behind the ears for every “after the jump,” because page views = money, people).

Today’s (essentially) scientific study comes courtesy of the Institute for Policy Studies (IPS) and United for a Fair Economy. It found that in 2006, the top 20 hedge fund and private equity bosses (Simons, Cohen, Griffin, Schwarzman, Kravis, etc) earned an average of $657.5 million, versus the $29,544 average raked in by U.S. workers. This translates to the former making 22,255 times that of the latter. But, obviously, that’s not the best part. The report notes that the discrepancy between the two groups “dwarfs”—that’s a direct quote—the discrepancy between CEOs and workers (corporate execs, on average, earn a measly 365 times that of U.S. workers). Actually, no, that’s not the best part, which is the statistic that last year, the Top 20 earned more money in ten minutes than U.S. workers made the whole year. The blatantly passive aggressive subtext here is that there’s something wrong with this.

Douglas Lowenstein, president of the Private Equity Council reminds us that “Income disparity is an important issue, but studies driven by sound bites don't advance a national debate about how our nation should respond” and, personally, as people who are practically deaf when it comes to sound bites, we think he’s dead right. Hedge fund lobbyist John Gaine, of the Managed Funds Association, notes that HF compensation is “fee-based and directly attributable to…performance.” Also right. Sarah Anderson, a director at IPS, decidedly not assisting us in our quest for a hat trick, criticizes the gap, and argues that Congress ought to increase the tax on private equity firm’s earnings from 15% to 35%.

Rather disturbingly, there seems to be a growing contingent in this country that agrees with Ms. Anderson. Individuals and groups who take issue with what they subjectively regard as astronomically bloated pay. People (Ben Stein, the New York Times) who have a “problem” with the so-called tax “loophole” (which, if you take off your shades of cynicism for a moment, will see is actually just a “business model”), open only to managers, and not ordinary Americans.

Thankfully, an organization known as SHAME (Southampton Alliance for Monied Estates) has its head on its shoulders and knows that hedge fund and private equity managers aren’t just like you and I—they’re better, and should be compensated and taxed accordingly. Yesterday, SHAME, in association with Concerned Neighbors of Henry Kravis, took to the streets and demanded more tax breaks for private equity kings. Rallying around Kravis’s mansion, SHAME called on Congress to let the KKR boss and other buyout billionaires with homes in the Hamptons to keep the 15% tax they’ve long come to enjoy. SHAME sang slogans like “protect the emerging plutocracy.” SHAME told DealBook, “We’re out here to help save our local neighborhood billionaires.” SHAME passed around a petition and encouraged people to defend the rights of a contingent of people that so obviously cannot defend itself.

John Carney, discussing SHAME's motivations on the eve of the rally [CNBC]
Union takes LBO protest to Hamptons [Reuters]
Buyout Tax Debate Hits the Hamptons [DealBook]
Cash of the titans: Criticism of pay for fund execs grows [USA Today]

*I will be here—KILLING—all day.