Ken Griffin in a rare interview with the Chicago Tribune Outlined his view on the position of the Very Wealthy in America. The 43 year old Billionaire is the manager of Citadel, a Chicago based hedge fund. Griffin’s view is that the Government has become far too involved in financial markets in recent years owing to the 2008 financial crisis. He says he has spent far too much of his time dealing with political causes in recent years, lobbying against an overbearing government involving itself in financial markets. He styles himself as a Reagan Republican. He has not however had trouble supporting Democratic candidates when he thinks they are best for the job. He supported and donated to Rahm Emmanuel’s campaign for Mayor of Chicago.
He sees the traditional American system as being under attack right now and believes the denigration of people of his means is the wrong road to travel down. This is what he means when he says people like him have less influence than they should. In recent months much has been made of the idea of the wealthiest 1% controlling the country’s interests in protest based on the Occupy Wall Street initiative. He sees the richest of the country as the greatest beneficiaries of the system and says they have a duty to get involved and bring their expertise back into improving the country as a whole. When the government gets too involved it is prone to error and bureaucratic obstacles. The governments picking of which institutions to save and which to let go in 2008 was the worst example of this according to Griffin. He refers to it in the interview as “distasteful”.
The Electron Global Fund was up 2% for September, bringing its third-quarter return to -1.7% and its year-to-date return to 8.5%. Meanwhile, the MSCI World Utilities Index was down 7.2% for September, 1.7% for the third quarter and 3.3% year to date. The S&P 500 was down 4.8% for September, up 0.2% for the third Read More
The biggest role played in creating the crisis originated from two sectors, Fannie Mae/Freddie Mac and Washington’s policies according to the fund manager. The insurers were protected by congress because of its influence in congressional elections and policies out of Washington encouraged them and the Bubble they created. He also blames the ratings agencies for not remaining vigilant and simply getting it wrong. He does believe however that it is difficult to know when you are in the center of a bubble. He believes there is a lot to be learned from 2008 but at the moment people seem to be learning the wrong lessons driven by antipathy toward Wall Street and the Financial Sector in Popular Opinion.
Griffin has spent close to $1 million in the 2012 cycle so far. Mostly giving to the Mitt Romney Super PAC Restore Our Future, Carl Rove’s American Crossroads Super PAC and The Republican Governors association. These organisations received $150,000, $300,000 and $560,000 respectively from Griffin and his wife. They have also donated a figure of around $1.5 million to the Koch Brothers causes under the umbrella group of Americans for prosperity. He want to see a change in November that reduces the role of government in directly influencing the market place. Many others in his line of work agree with him. Since the 2008 crisis the governments role in the financial markets has increased to what many would call a stifling level.