Via the Intercept, a story we should all be watching:
Coverage of the midterm elections has, understandably, focused on the shift in political power from Democrats toward Republicans. But behind the scenes, another major story has been playing out. Wall Street spent upwards of $300M to influence the election results. And a key part of its agenda has been a plan to move more and more of the $3 trillion dollars in unguarded government pension funds into privately managed, high-fee investments — a shift that may well constitute the biggest financial story of our generation that you’ve never heard of.
Illinois, Massachusetts, and Rhode Island all recently elected governors who were previously executives and directors at firms which managed investments on behalf of state pension funds. These firms are now, consequently, in position to obtain even more of these public funds. This alone represents a huge payoff on that $300M investment made by the financial industry, and is likely to result in more pension money going into investments which offer great benefits for Wall Street but do little for the broader economy.
But Wall Street’s agenda goes beyond any one election cycle. It has been fighting to turn public pensions into private profits for quite some time, steering retirement nest eggs into investments that are complex, charge hefty fees, and that generate big profits for management firms. And it has been succeeding. Of the $3 trillion in public assets currently in pension funds throughout the country, almost a quarter of that has already found its way into so-called “alternative investments” like hedge funds, private equity and real estate. That translates to roughly $660 billion of public money now under private management, invested in assets that are often arcane and opaque but that offer high management and placement fees to Wall Street financiers.
“Big government” is seen by Republicans as socialism and they are opposed to Marx. Republicans do like Big corporations because they represent Capitalism and “free enterprise.” Bush tried to privatize Social Security because it’s the largest government run (socialist) pension plan in the United States. They would like to turn the remaining socialist government controlled pension plans into Capitalist controlled profit centers. Republican state senator Alan Hays of Florida points out the twisted logic and ideology of the conservative mind quite nicely. Hays has introduced a bill that would require all 8th and 11th grade students to watch fascist capitalist Dinesh D’Souza’s Obama bashing movie “America: Imagine
the World Without Her.” When asked by the press to justify this top-down big government edict, something Hays often rants against, he said “This is a big government edict that I like.” That tells us everything we need to know about how the Republican mind works.
As far as I can tell, big government money going to big corporations is just fine with Rethugs. Political power generated from less than a quarter of the voting population doesn’t strike me as power at all. Given the underhanded nature of the Republican Party, the view that they are, in fact, an illegitimate government seems quite valid. People need to take to the streets attacking not only their criminality, but also the complicit nature of the media. Corporate medias complicity in undermining democracy makes them a legitimate target.
Heads, the profits get skimmed by Wall Street. Tails and you should have known better than to retirement plan on defined benefits dischargeable in bankruptcy.