Matt Taibbi on How Wall Street Hedge Funds Are Looting the Pension Funds of Public Workers

[Emit]

In his latest article for Rolling Stone, Matt Taibbi reports that Wall Street firms are now making millions in profits off of public pension funds nationwide. "Essentially it is a wealth transfer from teachers, cops and firemen to billionaire hedge funders," Taibbi says. "Pension funds are one of the last great, unguarded piles of money in this country and there are going to be all sort of operators that are trying to get their hands on that money."

AMY GOODMAN: Matt Taibbi joins us here in our studio. Explain how the pension funds are being looted.

MATT TAIBBI: The primary focus of my piece, there were a couple of things. Number one, how did these funds come to be broke the first place? I think everyone realizes that states are in fiscal crises or having trouble paying out their obligations to workers. One of the reasons is that at least 14 states have not been making their annual required contributions to the pension fund for years and years and years. So essentially, they have been illegally borrowing from these pension funds, sometimes going back decades. Another focus of the piece was the solution that a lot of sort of Wall Street funded think tanks are coming up with now is to get higher returns by putting these funds into alternative investments like hedge funds. In a lot of cases what I’m finding is that the fees that states are paying for these new hedge funds and these new types of alternatives investments are actually roughly equal to the cuts that they are taking from workers. Like in the state of Rhode Island, for instance, they have frozen the cost of living adjustment and the frozen cola roughly equals the fees that they’re paying to hedge funds in that state. So essentially it is a wealth transfer from teachers, cops, and firemen to billionaire hedge-funders.

~snip~

AMY GOODMAN: Matt Taibbi, talk about John Arnold.

MATT TAIBBI: John Arnold is a former Enron energy commodities trader who became a billionaire, one of the world’s most successful commodity traders after the collapse of Enron and he is sort of the new Koch Brothers figure. He is on a crusade. He has created something called the Arnold Foundation which is funding pension reform efforts in multiple states all across the country from Montana to Kentucky to Florida to Rhode Island where I spend a lot of time. In Rhode Island Arnold donated a lot of money to a 501(c)4 organization called Engage Rhode Island which helped promote the pension reform policies of the sort of Wall Street friendly treasurer they have in that state. And this is sort of the new formula, you have in the Citizen’s United age you have some person, a hedge fund guy like John Arnold, who gives a whole bunch of money to some shadowing organization which advertises this crisis that we can’t afford to pay workers any more so we have to do things differently. We gotta make cuts and then we gotta put all the money in Wall Street managed funds. That is sort of his playbook.

~snip~

Full Transcript and Video at Link:

http://www.democracynow.org/2013/9/26/matt_taibbi_on_how_wall_street



Here's Taibbi's Rolling Stone piece:

Looting Public Pensions: A New Think-Tank Study
All across America, Wall Street is grabbing money meant for public workers

~snip~

Today, the same Wall Street crowd that caused the crash is not merely rolling in money again but aggressively counterattacking on the public-relations front. The battle increasingly centers around public funds like state and municipal pensions. This war isn't just about money. Crucially, in ways invisible to most Americans, it's also about blame. In state after state, politicians are following the Rhode Island playbook, using scare tactics and lavishly funded PR campaigns to cast teachers, firefighters and cops – not bankers – as the budget-devouring boogeymen responsible for the mounting fiscal problems of America's states and cities.

~snip~

It's long but well worth the read: http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926

[Scuba]

1. Yeah, but it's not like you don't have an option ...

[Emit]

2. Bwhahaha...

...hahaha!



On edit, it's really no laughing matter but your damned post really took me by surprise. We're getting screwed left and right. Phew, it's been a long day...

[arcane1]

3. "Advertises this crisis" = the shock doctrine. That seems to be everyone's playbook now.

Last edited Thu Sep 26, 2013, 11:37 PM - Edit history (1)

Naomi Klein is a genius

[Emit]

4. She absolutely is!

And, yes! This is = Shock doctrine.

[Mojorabbit]

5. marking to read later! nt