Bernanke to Dine with Hedge Fund Managers, for a Hefty Fee
NEW YORK ( MainStreet) As chairman of the Federal Reserve, Ben Bernanke was paid $199,700 a year to oversee the bailout of Wall Street, and to administer a massive cash infusion into the U.S bond market -- a series of purchases that swelled the central bank's balance sheet to $4.16 trillion.
Bernanke was one of the world's most powerful people, with huge influence over the fortunes of his fellow man, but he didn't command the sort of salary usually associated with the masters of financial markets. Now that he's out of government, everything is different, and Helicopter Ben -- the nickname suggested by his policy of making it rain on the U.S. economy -- is finally cashing in.
On Wednesday, The New York Post's Page Six reports , "Bernanke was booked for an intimate dinner" with eight money managers at Le Bernardin, a French seafood restaurant ranked #1 in New York City by Zagat's in 2013. Among Bernanke's dining companions: David Einhorn, Louis Moore Bacon, Larry Robbins, and Michael Novogratz -- billionaire investors all, except for Novogratz, who used to be one before the crash. ( Don't take your hedge fund public .) The event's host is BTIG, a brokerage co-founded by a former Goldman Sachs partner that caters to hedge funds. (" Our commitment is to high-touch service .")
In the words of a source whom the Post calls "a spy," topics of the evening's discussion will include "the 2008 banking crisis, the current state of affairs in Washington and monetary policy." (The first subject is a rough one for Novogratz, since it cost him more than half a billion dollars.) This being the Washington-Wall Street nexus, we should expect that whatever insights Bernanke has would not be offered for free: according to The Post, to chew the fat with his real-life Rich "Uncle" Pennybags, Bernanke will charge his standard speaking fee: $250,000.
That's almost five times the median annual household income in this country -- where, it has recently been argued by economist Thomas Piketty , inequality is "probably higher than in any other society at any time in the past, anywhere in the world." Our vertiginous distribution of wealth is not Bernanke's doing: the recent divergence began in the 1980s, when he was an academic studying the Great Depression (which, incidentally, came on the heels of another spike in the share of income claimed by top earners). But the Fed's policies when Bernanke was in charge only reinforced this state of affairs: by pumping cheap money into the system, he sent the Dow Jones Industrial Average climbing more than 140% above its Great Recession-era rock bottom. Yet, as Bloomberg's William D. Cohan has argued , stock market gains came at the expense of savers: interest rates near zero have punished those who don't own securities -- nearly half of U.S. adults. ( According to Gallup , stock ownership has been below 60% since the crash, and last year was at its lowest recorded level, 52%.) Since "the vast majority of stocks [are] owned by a small number of wealthy families" (in the words of the St. Louis Fed ), a recovery driven by stock-market wealth is bound to be profoundly unequal. Sure enough, a study by Pew found last year that from 2009 to 2011, the mean net worth of the top 7% of households grew by 28%, while the lower 93% lost 4% of their average wealth.