Given what passes for thought in the Republican party these days, it is refreshing to see at least a little bit of reason emanating from that party in the House. True, about their only redeeming quality right now (or at all, for that matter) is that they are the opposition party. True, Cliff Asness he isn't, but Congressman Scott Garrett at least has something to say:
I am troubled by President Obama's statements that single out a certain class of Chrysler's creditors. The president's comments display complete disregard for the rule of law, as well as the practices which govern our bankruptcy code.
The actions of the hedge fund managers in exercising their fiduciary responsibilities to their investors is not the reason why Chrysler is in jeopardy, and their acceptance of the government's offer would not have guaranteed the company's success. I think the president should think about who he's attacking when he makes these statements. Many of those invested in these funds were seniors, school teachers, and others whose pension funds are an important component in maintaining a healthy standard of living throughout their retirement.
This demonization of investors comes at the same time when the administration's Treasury Department is begging for participation from the private sector in its Public-Private Investment Program. The president's comments beg the question: why would private investors enter into a partnership with the government when there is the future possibility of being publicly scolded for making business decisions the government dislikes?
It's time for the government to stop interfering in the marketplace. It simply creates greater uncertainty, facilitates the choosing of winners and losers, and prevents private capital from entering the marketplace.
Are you ready for your personalized tax rate, Congressman?
Garrett Statement on Hedge Funds [house .gov]