Notice the business strategy: public money buys stocks in worthless companies. That money is transferred to private pockets. Taxes raised to make up for shortfalls in the public pensions.
Socializing costs/risks/loss, and privatizing profit/gain. That's the story of American business. Psst. It's fascism.
(Notice, by the way, how the article tries to smear Democrats without the supporting evidence.)
http://www.nytimes.com/2004/03/21/business/21PENS.html
A small but growing part of the $2 trillion in state and local pension funds is being steered into high-risk investments by pension consultants and others who often have business dealings with the very money managers they recommend. After making such investments, a few of these pension funds have come up short, forcing the governments to draw on tax dollars.
The Securities and Exchange Commission is so concerned that it has begun an inquiry into the practices of pension consultants, who serve as gatekeepers for thousands of money managers.
The regulators will find not just financial consultants but a web of intermediaries — marketing agents, lobbyists, brokers and world leaders — between pension funds and the investments they choose.
Some play surprising roles. Former President Bill Clinton meets with pension trustees on behalf of the Yucaipa Companies, a private firm that seeks financial returns through social investing. Ehud Barak, the former Israeli prime minister, persuaded the Pennsylvania teachers' pension fund to commit $125 million to SCP Private Equity Partners, a firm that invests in Israeli military technology. New York's former state comptroller, H. Carl McCall, encouraged the Illinois teachers' pension fund to place $20 million in Healthpoint, a private firm that invests in orthopedic devices companies.
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