Submitted by PopoTheBright, Jun 18, 2007 09:47

Kudlow is dismayed by what he calls the Democrats' "war against prosperity and the so-called rich".

No Larry. They're not the "so-called" anything. They're rich.

Past arguments attempting to justify the windfall profits of the investor class used to include the importance of economic stimulus and that mythical magic of "trickle down". But in our globalized society such forces are clearly fantasy-- who invests in America anymore anyway? Investors used to invest domestically and as such, we protected them. But that whole concept is just so 20th century now.

So Kudlow has brought out another old saw instead: "These profits represent risk".

Oh really? Never mind that the "2%" part of the standard "2 and 20" hedge-fund compensation format constitutes little risk. But maybe Larry can help us understand how the relatively sure-thing of carry-trade profits (or global arbitrage deals) represent "risk" in the sense that the tax laws intended? The term "risk" when used to justify capital gains, used to conjure images of entrepreneurialism and its once-intrinsic stimulus to economic growth, business development ,employment and regional revenue. But today's "risk" provides none of those benefits to our society. So why do we defend it? Why should the personal income of this staggeringly wealthy group in our society be protected? What does it do for me? Or you? And why should our society defend a widening wealth-gap? Why is that good for America?

I'm all for protecting the entrepreneur, or the company that invests at home. But black-box investment vehicles which play the difference between global rates of interest, capitalize on volatility or pour money into Asian exchanges hide behind the once honorable concept of "risk" while playing the far more entertaining game of "reward". They do little for our society, and from an opportunity-cost perspective, they arguably rob it of potential domestic investment.

Note: Comments are screened, and in some cases edited, before posting. We reserve the right to reject anything we find objectionable.