While many establishment Democrats have tried to avoid antagonizing Wall Street Donald Trump despite his bufoonish commentary on immigration is making some interesting points on economics. This weekend Trump sounded the alarm about something I have been talking about for ten years solid, the ability to go after the managers of hedge funds.
From my vantage point, part of the 2008 economic collapse was due directly to the management of hedge funds. Trump is of course a flawed spokesperson for any number of reasons but I have to ask a simple question.
Why aren’t Democrats talking about themes like making hedge fund managers pay more in taxes?
Is it the Wall Street money that has entered the coffers of Democrats who are always seemingly desperate for some sort of acceptance from corporate America or simply a fear of being views as a “tax and spend” liberal?
It is also worth noting that on days like today, when the markets begin to slide, the TV business media channels CNBC and FOX Business often turn to managers of hedge funds for “analysis” of the economy and market. Embedded reporters in the Wall Street culture/way of thinking which accounts for the bulk of reporters at both the aforementioned networks take the words of hedge fund managers as gospel and like to recite right-wing talking points about free markets, tax cuts and the fed on days like today.
My assumption was Donald Trump fit nicely into this Wall Street apologist culture especially given his long-standing ties with CNBC. But his comments recently have been a pleasant surprise and provide some lessons for Democrats. Trump said of this issue on CBS’ Face the Nation:
“The hedge fund guys didn’t build this nation. These are guys who shift paper around and they get lucky,”. “They’re paying nothing and it’s ridiculous,”
“Look, they’re energetic, they’re very smart,. “But a lot of them, they’re paper pushers. They make a fortune and they pay no taxes. It’s ridiculous.”
“Some of them are friends of mine. Some of them I couldn’t care less about. It’s the wrong thing. The hedge fund guys are getting away with murder. They’re making a tremendous amount of money and they pay no taxes,” Trump said.
While Trump right now is a Republican problem, should he win the GOP nomination (something that is still highly improbable but less so than a few weeks ago) Democrats might have to watch their flank. As much as activist Democrats and party regulars might not see it this way, people do vote based on economics and fear. Trump’s ridiculous views on immigration might in fact when coupled with economic populism and protectionism lead many working class voters to support him. Democrats need to adopt some of these populist themes, particularly taxing hedge fund managers at a high rate. These fat cats make BILLIONS and as Trump implied many are just savvy hard-working paper pushers- the worst example of white collar American excess.
I hate to say it but Democrats could learn some useful things from Donald Trump.
The Florida Squeeze 
Hedge fund managers go to work every day just like ordinary folks and receive paychecks and bonuses just like ordinary folks (except the amounts earned by hedge fund managers have many more digits). Ordinary folks, however, pay in to Social Security and Medicare Trust funds at a rate of 15.3% of their wages from the first dollar earned, And then if the ordinary folks have “taxable income” they pay income taxes at rates from 10% to 39.6%.
When it comes to “taxable income,” since Bill Clinton was President, income of hedge fund managers was considered “carried interest” (taxed at capital gains rates) and not “earned income.”, Capital gains until recently were taxed at a maximum rate of 15% (today that maximum is 20%).
Not to pick on Mitt Romney but just to use him as a verifiable example of taxes paid by hedge fund managers, I recall when he released his tax return while running for President the cat came out of the bag on taxes paid by hedge fund managers. That tax return showed his hedge fund income was $22 million and he paid 14% of that to the Federal Goverment as income taxes.
Ordinary folks paid a higher percentage of taxes to the Federal government than a hedge fund manager paid, even if the ordinary folks have no “taxable” income and pay no income taxes to the Federal government..
What is wrong with this picture?
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There are Democrats willing to run on economic populism, but where are they to get the money for TV ads?
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