According to Rep. Marcy Kaptur (D-Ohio), "If you asked any given person on the street in [her] district what a hedge fund is or how a private equity fund operates, chances are that person would not be able to tell you."
Alarmingly, the same confusion exists within the halls of Congress and at the Securities and Exchange Commission (SEC). Little is known about their potential impact on our overall economy since they go almost completely unregulated. Their mammoth profits earned through corporate takeovers are gaining some attention on the pages of The Wall Street Journal. Their impact is felt in our districts. They take their toll on our constituents and our neighbors. Recently, the private equity firm Cerberus bought Chrysler, whose Jeeps are made in Toledo, Ohio, and the Carlyle Group bought Manor Care, a Toledo-based assisted living company. These distant owners will have a huge impact on our way of life. Yet we do not really know them.Imagine that? Making a profit! How dare they! So, what does Kaptur propose? Government regulation.
And don't think there isn't political motivation behind this either.
Without question, hedge fund managers exert phenomenal political power. In 2004, for example, Cerberus founder Stephen Feinberg gave $25,000 to the National Republican Congressional Committee and donated over $100,000 to defeat House Democrats. James Cayne, CEO of Bear Stearns, sent the National Republican Senatorial Committee $10,000.
And of course, she can't go without attacking at least one Republican presidential candidate for having the audacity to make a profit by taking over struggling companies and turning them around.
In fact, Mitt Romney made his fortune with Bain Capital, the private equity firm he co-founded. But no matter to which party the fund managers give, the money comes at the expense of working Americans and at the risk of compromising our national security.And just who does think loses out when failing companies are given a second chance? The people employed there? She fails to mention that companies being taken over would otherwise go out of business.
Should the people of her district all lose their jobs so that bigger companies can't profit?
This is all leading to more Democrat-proposed tax increases. Democrats can't stand it when companies make profits, so instead they want to funnel those profits into the government's coffers. All in the name of "public interest."
