The notion that hedge fund managers turned against President Barack Obama because he called them "fat cats" a year and half ago is prompting derision.
“Imagine how hurtful it is to be called a ‘fat cat,’" Hugo Lindgren wrote in a sarcastic tweet this morning.
But hedge fund managers haven’t turned against Obama because he hurt their feelings. They’ve turned against him because they think he’s been intellectually disappointing.
To understand the turn against Obama, it’s important to understand why Obama ever had the support of many financiers—including many who historically supported Republican candidates.
Financial executives tend to disdain partisan politics. They view themselves as “practical” types, committed to “what works.”
And—importantly—hedge fund managers of almost every stripe tend to have a strong faith in the abilities of the cognitive elite to detect problems and find solutions.
At the same time, however, they tend to suspect the levers of power—political and corporate—in America are not controlled by the cognitive elite. Both politics and corporate America seem to reward mediocrity, nepotism and complacency. Politics is worse because of the additional problems of partisanship and ideology.
Of course, this is in itself an ideology. It is the shadow politics of the shadow financial system: a belief that very smart, pragmatic outsiders are the unheralded carriers of wisdom. One sign that this is an ideology is the very rejection of it is considered a sign of stupidity or corruption by those who hold it. If you don’t believe in the Shadow Ideology of Hedge Funds you are either stupid or looking to feather your own nest. Probably both.
You can see this in the way activist hedge funds attack corporate managers. You can overhear as the background assumption of many discussions at hedge fund conferences. It’s pretty much embodied in the professional trajectories of many of the most successful hedge fund managers, who progressively reject conventional wisdom and conventional jobs in favor of going out on their own—and #winning!
When a lot of hedge fund guys looked at Obama in 2007 and 2008, they saw themselves. He was a guy coming out of nowhere, rising quickly to the top. He was obviously smart. He embodied a promise of bringing America to a place beyond partisanship, beyond the stale politics of race and class. Hope. Change. Fire it up!
When Obama seemed to turn against them, he broke this illusion.
Suddenly, he was labeling the financial sector as “the other.”
This betrayal was taken as a sign that Obama either was never as smart as he seemed—or that he had been corrupted by partisan politics.
Viewed through the Shadow Ideology, Obama had become an obstacle to political and economic progress.
Questions? Comments? Email us at
Follow John on Twitter @ twitter.com/Carney
Follow NetNet on Twitter @ twitter.com/CNBCnetnet
Facebook us @