Wednesday, September 2, 2009

Garrett Lectures EU on Hedge Funds

A hallmark of conservative principles used to be that we don't interfere with other nations, because we don't want them interfering with us. However, in this new world, our Representative Scott Garrett decided he should join in defense of hedge funds with Representative Paul Kanjorski in criticizing what is essentially a European Union decision. From Bloomberg:
Paul Kanjorski, a Pennsylvania Democrat, told EU lawmakers today that proposed EU rules “scared the living bejesus” out of the industry. (London Mayor) Johnson said that the proposals threaten London’s role as a leading financial center.

The rules under consideration would limit the amount of borrowing hedge funds can use and require the use of European- domiciled banks. The initiative was designed amid the fallout from the financial crisis, in which the decline of the U.S. housing market triggered bank losses and triggered the first worldwide recession since World War II.

“Your focus should be elsewhere,” Congressman Scott Garrett, a Republican from New Jersey, told members of the European Parliament’s economic and monetary affairs committee. He said hedge funds weren’t the cause of the global financial crisis.
While Garrett has a history of defending hedge funds, one has to hope the characterization of Garrett's comments weren't actually Garrett saying they played no part in the problem. It would be the height if irresponsibility for him to suggest hedge funds played no part in artificially inflating the bubble.

However, Garrett's "focus elsewhere" comment is very much in line with his thinking. Readers have to remember, he voted against having hedge fund managers taxed like normal people, which would lay the groundwork for a permanent AMT fix for the 20% of our District who have to pay it.

Yes, apparently the opposition to the proposals are bi-partisan, but why are our Congressmen over in Europe telling them how to run their markets? What jobs are they costing our financial sector, if in fact hedge funds would move, should the regulations go into place?

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