Sebastian Mallaby on Greenspan
This week on Masters in Business, we speak with Sebastian Mallaby, author of the new biography “The Man Who Knew: The Life and Times of Alan Greenspan,” as well as “More Money Than God: Hedge Funds and the Making of a New Elite.”
Mallaby discusses the contradictions that are Alan Greenspan: He was a libertarian, in favor of small government, yet was the most interventionist Federal Reserve chairman in history. Greenspan was also a creature of politics, offering economic policy advice to presidential candidate Richard Nixon while recommending how to spin it at the same time.
Discussing “More Money Than God,” Mallaby explains that J.P. Morgan on an inflation-adjusted basis was worth $1.3 billion. Top hedge-fund managers are making more than that in a single year, hence the book’s title. We chat about the challenge of overcoming the fee structure long favored by hedge funds (a 2 percent annual management fee, plus 20 percent of any capital gains) and why hedge funds weren’t a cause of the financial crisis.
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