If it was Germany's attention to use the past weekend's G7 meeting to call attention to the need for greater scrutiny of hedge funds, then they seem to have succeeded with at least one French politician. According to Martin Arnold, reporting from Paris for The Financial Times, Nicolas Sarkozy has decided to bring that scrutiny into his presidential campaign:
“We did not create the euro to have capitalism without ethics or morals. I am extremely worried about speculative movements,” he said. “Who can tolerate a hedge fund buying a company with debts, firing 25 per cent of staff and then reimbursing them by selling it in pieces? Not me.
“I want to make France the country that rewards wealth creation, but which also knows how to hit predators.” His comments echo the traditional Gaullist suspicion of capitalism and financial investors, for which Mr Chirac has become well known.
Unfortunately, I am not sure that Sarkozy is approaching this issue on the right rhetorical footing. He seems to want to elevate a debate about regulation to one involving the higher standards of ethics and morals. Here in the United States, the very word "ethics" is likely to turn off most voters, at least until the Congress comes up with several more solid demonstrations of its ability to manage oversight of unethical behavior. On the other hand many French may react to the word "regulation" the same way as many Americans, particularly on the Republican side of the fence: as a code word that signals further impositions by "big government."
It may be that Sarkozy decided to jump on the hedge fund bandwagon before the ink from Essen had dried and had not really put his thoughts in order before making his first public statement on the matter. Since his opponent has also come under attack for making some "reckless" public statements, this may even the balance between the two candidates a bit; but it does little to advance the state of political discourse for either. Now that the Germans have "opened the season" on discussion of hedge funds, we should at least hope for more consideration behind the discussion, even if, in the "real world of politics," that hope is not particularly realistic!