Robert Reich's NPR commentary 051910

Today Mr. Reich commented about how the hedge fund mgrs make out-sized earnings and somehow that is supposed to be bad. Top hedge fund mgrs probably made $1 billion last year but they took some risky market positions to earn that. and the US govt is not out to bail them if their risky bets turn out sore. The point was about closing a loophole to tax these earnings as ordinary income rather than get the 15% capitals gain treatment - I agree with that point. but then he went to say how that $1 bil could have been used to pay the salary of 25,000 teachers in the US instead of one hedge fund mgr. This $1 bil wouldn't be there unless the hedge fund mgr took the positions he took in the mkt. It is not like the hedge fund mgr hoodwinked school districts or the state govt or the federal govt and made this money by taking it away from them. The hedge fund mgr saw some arbritrage opportunities in the mkt and took positions to profit from it and by doing that made the market more efficient. and the hedge fund mgr will probably either invest the earnings in the market or spend the money buying goods and services in the economy. and the money gets back into the economic cycle again.