Capital Losses: Yesterday On Capital Hill

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We may need to open a Washington, DC branch office if this keeps up. Yesterday saw no fewer than three congressional hearings on hedge funds and private equity, an SEC vote approving an anti-fraud rule aimed at hedge funds, and a vote in Congress to change Sallie Mae’s student loans that may wind up scotching the private equity buyout of the student loan giant.
We’ll get around to the details of all these things as the day rolls on. But there’s no better starting place than this Power & Money blog item from CNBC’s Melissa Lee, which asks whether lawmakers are simply “creating more waste with private equity probes?” She points out that the hearings were structured to be largely uninformative—heavy on tax experts, academics and government spokesmen but light on actual private equity and hedge fund folks—and duplicative. One hearing covered taxes, another the dangers of systemic risk and the third the risk to smaller investors. Couldn’t at least a couple of these have been combined?
But the hearings might not have been as wasteful as Melissa thinks, at least not from the perspective of lawmakers. If there’s one thing that’s certain, carried interest tax hike or not, more money is going to be flowing into Washington after the latest set of hearings. It will just be coming in the form of campaign contributions.
Capitol Hill: Creating More Waste With Private Equity Probes? [CNBC]

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