WALL STREET IS TAKING OVER AMERICA’S PENSION PLANS

The flow of public money into Wall Street coffers has greater ramifications than simply putting pension funds at risk and corrupting our political system. It also fundamentally alters the future shape of American society by changing how public funds will get spent. Consider what might happen if pension money were steered into the communities where pension beneficiaries live. Michael McCarthy, an assistant professor of sociology at Marquette University, has highlighted how the Quebec government’s pension investment fund boosts the regional economy:

The fund invests in small and medium enterprises that operate within the province. According to their calculations, by 2012, the Solidarity Fund’s investments created 86,624 new jobs and kept 81,993 more from moving overseas.

Pension funds could play a similar role in America, but they don’t. Instead, U.S. pension funds mimic Wall Street investment practices.

Simply put, outsourcing investment decisions to Wall Street instead of giving them to accountable public servants adversely affects where pension investment money goes. When the money is not managed publicly there is no incentive to invest in local infrastructure, and there is nothing to dissuade investors from putting public money into investments that harm the local community, for example by outsourcing local jobs abroad.

“There is a massive transfer of power and wealth happening from the public to Wall Street, through pensions,” says a former Congressional staffer, who asked to remain anonymous because he has ties to the industry.“The more that money goes into private hands as opposed to public hands, the less that it gets invested into projects which are socially constructive.”

“It’s a policy justified entirely on people’s ignorance of what’s going on.”

https://firstlook.org/theintercept/2014/11/20/huge-wall-street-story-one-talking/