In addition to his gifts of oratory and political acumen, President Obama has often been gifted with amazing good luck. Of course, it is often said that one makes his own luck, but even the president’s aides concede that his rapid ascent from the state legislature to the White House was cleared by fate and good fortune.
These days, that luck may be most apparent in the president’s political opponents, by which I’m referring to not just the current disarray of the Republican Party, but those voices who rise above the din to emerge as Mr. Obama’s critics.
Which brings us to money manager Cliff Asness of AQR Capital Management whose angry letter — "Unafraid in Greenwich, Connecticut" — has emerged today in the conservative and media worlds as a harsh critique of the president’s attack last week on hedge fund owners refusing to go along with his administration’s plans for Chrysler.
With a name and occupation straight out of Dickens, Mr. Asness — once called "filthy, stinking, rich," by New York magazine — takes on President Obama, who must see this invitation to debate much in the same way Br’er Rabbit pleaded not to be thrown into the Briar Patch. (Who came up with the title for the letter? Axelrod? Perhaps "Bold and on My Yacht" was too subtle.)
But just as we aired the president’s take on these hedge fund manager last week, we will air the opposing view.
Asness’s letter reads, in part: "The President has just harshly castigated hedge fund managers for being unwilling to take his administration’s bid for their Chrysler bonds. He called them ‘speculators’ who were ‘refusing to sacrifice like everyone else’ and who wanted ‘to hold out for the prospect of an unjustified taxpayer-funded bailout.’ The responses of hedge fund managers have been, appropriately, outrage, but generally have been anonymous for fear of going on the record against a powerful President … Furthermore, one by one the managers and banks are said to be caving to the President’s wishes out of justifiable fear.
"I run an approximately twenty billion dollar money management firm that offers hedge funds as well as public mutual funds and unhedged traditional investments. My company is not involved in the Chrysler situation, but I am still aghast at the President’s comments …
"Here’s a shock. When hedge funds, pension funds, mutual funds, and individuals, including very sweet grandmothers, lend their money they expect to get it back. However, they know, or should know, they take the risk of not being paid back. But if such a bad event happens it usually does not result in a complete loss. A firm in bankruptcy still has assets. It’s not always a pretty process…
"The above is how it works in America, or how it’s supposed to work. The President and his team sought to avoid having Chrysler go through this process, proposing their own plan for re-organizing the company and partially paying off Chrysler’s creditors. Some bond holders thought this plan unfair. Specifically, they thought it unfairly favored the United Auto Workers, and unfairly paid bondholders less than they would get in bankruptcy court. So, they said no to the plan and decided, as is their right, to take their chances in the bankruptcy process. But, as his quotes above show, the President thought they were being unpatriotic or worse…If you hired an investment professional and he could preserve more of your money in a financial disaster, but instead he decided to spend it on the UAW so you could ‘share in the sacrifice’, you would not be happy…
"The President’s attempted diktat takes money from bondholders and gives it to a labor union that delivers money and votes for him. Why is he not calling on his party to ‘sacrifice’ some campaign contributions, and votes, for the greater good? Shaking down lenders for the benefit of political donors is recycled corruption and abuse of power…
"…the President screaming that the hedge funds are looking for an unjustified taxpayer-funded bailout is the big lie writ large. Find me a hedge fund that has been bailed out. Find me a hedge fund, even a failed one, that has asked for one. In fact, it was only because hedge funds have not taken government funds that they could stand up to this bullying. The TARP recipients had no choice but to go along. The hedge funds were singled out only because they are unpopular, not because they behaved any differently from any other ethical manager of other people’s money. The President’s comments here are backwards and libelous. Yet, somehow I don’t think the hedge funds will be following ACORN’s lead and trucking in a bunch of paid professional protestors soon. Hedge funds really need a community organizer.
"This is America. We have a free enterprise system that has worked spectacularly for us for two hundred plus years. When it fails it fixes itself. Most importantly, it is not an owned lackey of the oval office to be scolded for disobedience by the President…"
For what it’s worth, Mr. Asness donated $2,300 to then-Sen. Obama’s presidental campaign in June 2007, along with donations of $2,300 apiece to the 2008 presidential campaigns of Sen. Chris Dodd, D-Conn., Sen. Hillary Clinton, D-NY, and former New York City Mayor Rudy Giuliani.
He has also given $28,500 to the Libertarian National Committee in 2008; $22,700 to the Republican National Committee in 2008; $2,800 to the National Republican Senatorial Committee in 2008; $15,309 to the Democratic Senatorial Campaign Committee in 2007 and 2008; and $25,000 to the Democratic National Committee in 2005.