Republicans Spar Over, Take Potshots At ‘Hedge-Fund Bonanza’

Oct 12 2007 | 10:45am ET

Democrats aren’t the only ones tied in knots over hedge funds.

In a debate this week otherwise characterized by traditional Republican jostling over cutting taxes and government spending, at least some of the G.O.P.’s White House hopefuls sounded anything but enthusiastic about hedge funds.

Queried about whether there was a downside to the “hedge-fund bonanza,” former New York Mayor Rudolph Giuliani, for his part, responded with unbridled enthusiasm. But Rep. Ron Paul (R-Texas) was more circumspect.

Giuliani said the market “is a wonderful thing” and “one of our greatest assets” while Paul expressed unease about the “transfer of wealth from the poor and the middle class to the wealthy” that he says hedge funds represent, noting his belief that it “is not a consequence of free markets.”

In response to a separate question, former Arkansas Gov. Mike Huckabee said, “The reality is that when you have the average CEO salary 500 times the average worker, and you have the hedge fund manager making 2,200 times that of the average worker, you’re going to create a level of discontent that’s going to create a huge appetite for unions,” which he apparently believes is a bad thing.

Giuliani—who enjoys serious financial support from the hedge fund community—leads most polls of Republican primary voters, with both Huckabee and Paul winning low-single-digit support.

The exchanges come during a week when Senate Democratic leaders said the body would not consider bills to increase taxes on hedge and private equity fund managers this year. That move has been sharply criticized by leading Democratic presidential candidate—who also, it should be noted, enjoy substantial financial support from hedge funds—including Sens. Hillary Clinton (D-N.Y.) and Barack Obama (D-Ill.).

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