May's first Liar of the Month really raises some fascinating questions, such as,
The Scoreboard's preliminary answers: yes; amazingly, yes; maybe not; and I'm beginning to think so, and it's pretty scary.
Let us examine what Edwards said. In an interview with the Associated Press, Edwards, who has made eradicating poverty and the disparity of wealth in what he calls "the two Americas" the centerpiece of his presidential campaigns in 2004 and now, was asked why he went to work for an international hedge fund in 2005. The former senator earned as yet undisclosed fees to consult with Fortress Investment Group, which manages approximately $35.1 billion in assets. Edwards answered that he took the job to make money---Edwards is already a multi-millionaire from his work as a personal injury lawyer---but primarily to learn about financial markets and their relationship to poverty.
Edwards was counting on the fact that very few American have a good idea what hedge funds are, so the absurdity of this statement would go right over their heads. [For a clear and interesting explanation of all aspects of hedge funds, see New York Magazine's recent feature at http://nymag.com/news/features/hedgefunds/]
About $2 trillion are currently invested in hedge funds worldwide, ten times the amount in 1999. New York Magazine reports there are more than 9,000 hedge funds, 351 of which manage $1 billion or more. It quotes one hedge fund executive as describing them this way:
"Hedge funds are investment pools that are relatively unconstrained in what they do. They are relatively unregulated (for now), charge very high fees, will not necessarily give you your money back when you want it, and will generally not tell you what they do. They are supposed to make money all the time, and when they fail at this, their investors redeem and go to someone else who has recently been making money."
So how is consulting to a hedge fund going to be helpful in understanding poverty?
Well, you know! The same way working on an asparagus farm will help you understand high fashion. The same way working for the Metropolitan Opera will help you understand termite control. The same way working for Paris Hilton will help you understand string theory. In other words, not helpful at all of course---what do you think I am, an idiot?
Then the interviewer asked (presumably after he stopped laughing and could catch his breath) if Edwards had to join a hedge fund in order to learn about financial markets. (He also could have asked why, if Edwards had to learn about hedge funds, why a hedge fund was paying him to provide consultation services. See, people pay consultants to teach them, not the other way around…but I digress!) Edwards' amazing answer: "How else would I have done it?" He said he considered going to an investment firm such as Goldman Sachs, but Fortress was the most natural fit. That's for sure: Fortress was the single biggest employer of Edwards donors during the first three months of the year. Donors who listed "Fortress" as their employer contributed $67,450 to Edwards' campaign, and supporters who identified their employer as "Fortress Investment Group" gave another $55,200 to the campaign, according to Federal Election Commission records.
The interviewer suggested that Edwards could have taken a university class instead. "That's true," said Edwards thoughtfully, forgetting to add "duh." The interviewer, if he wasn't rolling on the ground giggling so violently at this point, might have suggested that if Edwards really wanted to understand poverty, he probably should have taken a university class on that topic, rather than financial markets. But one has to pay to go to classes, and one gets money, lots of it, to learn about poverty consulting to hedge funds when one doesn't understand financial markets.
I wrote that sentence, and I still don't understand it.
Personally, I think Edwards should have worked on the asparagus farm. But there still is a fascinating question that remains unanswered:
How does John Edwards keep his hair looking so nice when his pants are on fire?
And a more serious one:
Why are so many Americans willing to consider candidates for national office who obviously think the public is made up of morons?