When US politicians wanted to court voters after the global financial crisis, they knew who to attack: the “fat-cat bankers” running the Wall Street banks in 2008.
This week, President Barack Obama visited Georgetown University to discuss social issues with students. But instead of railing against the financial sell side — the bankers — he took aim at the asset managers who make up the buy side; in particular, powerful hedge fund managers and private equity players. “The top 25 hedge fund managers made more money than all the kindergarten teachers in the country,” he said, arguing that “society’s lottery winners” should be forced to pay higher taxes on their operations. “There’s a fairness issue here.”
Investors should take note. For there are at least three reasons why Mr Obama’s comments are important. First, it shows that the politics of anger has not died away. Never mind the fact that the economy is on a (moderately) healthy growth trajectory and that memories of the financial crisis are fading. US voters remain exercised by income inequality. Hence the continued appeal of firebrand politicians such as Democratic senator Elizabeth Warren.