http://www.truthout.org/docs_2006/072607F.shtml"The SEC has just very recently finally agreed that this is a very serious problem that is destroying some companies and undermining the integrity of the markets," he explained. "They came out with regulations in 2005, which we criticized for having huge loopholes. But this year, the SEC finally said their attempts to address the problem have failed, so they are seriously tightening the regulations. Now we'll see if they enforce them."
But history, as always, likely will teach a different lesson. Consider two events in that regard. The first happened after - and because of - the 1929 Crash: The Glass Steagall Act of 1933 mandated the separation of bank types according to their business, after the Senate-led Pecora Commission investigation of the crash found that collusion between commercial and investment banks played a major role in it. That act stood for 66 years, until none other than Bill Clinton repealed it in 1999, and here we are again.
Here's the other lesson: According to a recent Financial Times story, "Barack Obama received more donations from employees of investment banks and hedge funds than from any other sector, with Lehman Brothers, Goldman Sachs and JP Morgan Chase among his biggest sources of support." While Obama has already promised to increase regulation on hedge funds and the tax burden on private equity groups (or today's "pools," as Byrne explained them), if he becomes president, one can imagine he'll be singing quite a different tune if he becomes the first black man in history to run the White House.
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And for those of you who think that may be too broad a generalization, consider this: As the Huffington Post explained, "By taking advantage of a provision in the law that allows expanding companies like Mr. Murdoch's to defer taxes to future years, the News Corp. paid no federal taxes in two of the last four years, and in the other two, it paid only a fraction of what it otherwise would have owed. During that time, Securities and Exchange Commission records show that the News Corp.'s domestic pretax profits topped $9.4 billion."
Can you say free ride?
For those who argue that Murdoch and hedge funds are miles apart, consider this: He knows how to hedge just fine, thanks. After all, it was none other than current Republican presidential candidate Rudolph Guiliani who in 1996 threatened to run Fox News commercial-free on a city-run access channel if Time Warner Cable didn't end its 11-month battle to keep Murdoch out of New York households. It's also important to note, especially if you are Murdoch, that it was Guiliani who implemented RICO statutes to nail Michael Milken with 98 counts of racketeering and fraud. But Murdoch is an old hand at hedging: He's so far funneled $40,000 into Hillary Clinton's campaign. Whoever loses, he wins.