All Commentary
Friday, April 2, 2010

A High Word-to-Fallacy Ratio, Indeed

“What kind of society gives that kind of money to people who produce … nothing?”

–Chris Matthews, April 1, on the record 2009 salaries of hedge-fund executives

And what kind of society pays Chris Matthews all that money say totally ignorant things on television every night? (I’m assuming I don’t have to comment on Matthews’s premise that “society gives” money to hedge-fund managers.)

For some actual information on the subject, see Warren Gibson’s Freeman article “The Mystique of Hedge Funds.” Here’s a teaser:

As long as there is no fraud, hedge funds, like other market participants, produce social benefits. They provide market liquidity, the lubrication that makes markets work well. Successful funds help move capital to where it is most needed and help move prices in anticipation of future events. Unsuccessful funds go out of business sooner or later, and investors in failed funds learn to be more careful about whom they select to handle their money.

  • Sheldon Richman is the former editor of The Freeman and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families and thousands of articles.