Wall Street Is Fleecing a Bunch of Teachers

Link: https://jacobin.com/2022/04/katie-muth-pennpsers-pensions-retirement-fund-teachers-sec-pennsylvania

Excerpt:

A new era in the decade-long battle by retirees and whistleblowers to halt massive transfers of wealth out of retirement funds and into Wall Street firms could be at hand, thanks to the case of Katie Muth.

Muth, a Democratic Pennsylvania state senator, is one of fifteen trustees who oversees Pennsylvania’s largest public pension fund, the Pennsylvania Public School Employees’ Retirement System (PennPSERS). Not long after her February 2021 appointment to the board, Muth began questioning the fund’s investments in areas like private equity, hedge funds, and real estate.

Over the past thirty years, public pension funds have moved $1.4 trillion of retiree savings into such high-risk, high-fee “alternative investments,” enriching finance industry moguls like Stephen Schwarzman of the Blackstone Group and Robert Mercer of Renaissance Technologies while often shortchanging retired public employees and teachers.

But Muth says that when she asked the fund’s investment staff for more information about its high-risk investments, she was rebuffed — so in June 2021, she sued the fund for basic information about its investments.

Author(s):MATTHEW CUNNINGHAM-COOK

Publication Date: 6 April 2022

Publication Site: Jacobin

Will Democrats Try Cutting Social Security and Medicare After a Disastrous Midterms?

Link: https://jacobin.com/2022/06/austerity-entitlement-reform-social-security-democrats-gop

Excerpt:

Days after Obama lamented Democrats’ 2010 electoral “shellacking,” his commission released a plan to slash Social Security benefits and raise the program’s eligibility age. Economist Paul Krugman noted at the time that the commission also suggested using newly gained revenue to finance “sharp reductions in both the top marginal tax rate and in the corporate tax rate.”

The plan ultimately did not receive the fourteen commission votes it needed to move forward, and a few years later in 2012, the House voted down a version of the proposal. That didn’t stop the Obama-Biden administration’s push: right after winning reelection — and after cementing much of the George W. Bush tax cuts — they tried to limit cost-of-living increases for Social Security, to the applause of Republican lawmakers.

…..

Like Obama, Biden campaigned on a promise to protect Medicare and Social Security. But as we have reported, Biden is already affirming big Medicare premium increases and accelerating the privatization of that health care program. Biden also has not pushed to fulfill his promise to expand Social Security, even though there is new Democratic legislation that would do so.

And now with Graham’s comments, Republicans are banking on him becoming the old Joe Biden on Social Security if they win in November.

It’s not an insane political bet. After all, Biden for decades proposed cuts and freezes to Social Security and publicly boasted about it. Indeed, Biden spent most of his career depicting himself as an allegedly rare and courageous Democrat who was willing to push off his party’s base and tout austerity.

Author(s): David Sirota

Publication Date: 16 Jun 2022

Publication Site: Jacobin

A Group of Midwestern Retirees Are Trying to Stop Wall Street’s Abuse of Retirement Funds

Link:https://jacobinmag.com/2021/11/ohio-teacher-pensions-hedge-funds-private-equity-strs

Excerpt:

Due to an active group of retirees and the assistance of a former Ohio attorney general, both the Ohio state auditor and the Ohio Department of Securities have launched inquiries into the Ohio State Teachers Retirement System (STRS Ohio), a $100 billion pension that has launched billions of dollars of investments into the riskier corners of the market, namely private equity and hedge funds.

“Ohio could be the first place where the secrecy surrounding public pensions and their investments in risky, speculative, and high-fee investment vehicles could be looked at in a serious way,” said Ted Siedle, a former SEC attorney and longtime pension whistleblower.

Pointing out that pension funds across the country have routinely invoked “trade secrets” exemptions to deny the public information about investment performance and fees, Siedle said the actions taken by the state auditor and securities commissioner “could be the beginning of the end” of such secrecy — not just in Ohio, but nationwide.

Author(s): MATTHEW CUNNINGHAM-COOK

Publication Date: 30 Nov 2021

Publication Site: Jacobin magazine

To Protect Australian Workers’ Retirement Savings, We Must Democratize Pensions

Link: https://jacobinmag.com/2021/05/australia-pensions-superannuation-super-industry-funds-democratic-control-investment-vanguard-equity-stock-market

Excerpt:

By design, Australia’s existing superannuation system reproduces inequalities built into the labor market. This is because employers must pay super as a proportion of wages into individual accounts that then earn compounding returns. Upon retirement, high-income workers may find they own a significant pool of capital.

Meanwhile, lower-income workers — disproportionately women — retire with the lowest super balances. The same will be true of younger or marginalized workers who are trapped in precarious or informal employment. As wages continue to decline and precarious work becomes more prevalent, the number of people with a stake in defending superannuation is shrinking year by year.

To make matters worse, in its present form, superannuation undermines genuinely redistributive institutions like the age pension. This is because conservative political forces are able to present them as a last-resort safety net rather than a guarantee of the right to a decent retirement.

Author(s): Robert Lechte

Publication Date: 9 May 2021

Publication Site: Jacobin Magazine

Private Equity and Hedge Funds Survived the 2008 Crisis. Now They’re Making a Killing Off COVID-19.

Link: https://jacobinmag.com/2021/04/private-equity-hedge-funds-covid-profits

Excerpt:

What is a shadow bank?

The term shadow bank refers to things like hedge funds, venture capital firms, and private equity, which all have relatively less oversight than traditional financial institutions. These are all lending intermediaries, or institutions that lend money that fall outside of the mainstream regulatory structure of finance. They’re either situated outside of investment banks, or they exist in less regulated arenas of investment banks, perhaps in offshore settings. One example you might be familiar with is the big private equity firm Blackstone. Another is the big hedge fund Bridgewater.

The “shadow” label implies a degree of opacity, because frequently they make investments that are harder to understand, often in private markets rather than public markets. But it also refers to the fact that they’re lending in the shadow of larger institutions. This partially because they’re deemed to have sophisticated investors by the Securities and Exchange Commission and are therefore designated as subject to less oversight.

Author(s): Megan Tobias Neely interviewed by Meagan Day

Publication Date: 8 April 2021

Publication Site: Jacobin Magazine

The End of Joe Biden’s Student Debt Prison May Be in Sight

Link: https://jacobinmag.com/2021/04/biden-student-debt-loan-forgiveness-bankruptcy

Excerpt:

Bankruptcy courts have not been friendly to student borrowers. That’s at least partly attributable to Biden. In 2005, “the senator from MBNA,” so named for his close relationship with the credit card company that was also his largest donor, was one of eighteen Senate Democrats who backed a successful Republican-led bankruptcy reform bill that stripped private student loans of bankruptcy protection amid an explosion of private loan debt.

“He is a zealous advocate on behalf of one of his biggest contributors — the financial services industry,” Senator Elizabeth Warren (D-MA) said of Biden at the time.

For his part, Biden argued the law was necessary to prevent abuse of the system by borrowers who could afford to repay some of their debt. He and other supporters of the bankruptcy bill claimed the legislation would enable private lenders to lower costs for people seeking credit. But both arguments were ultimately proven wrong — abuse was minimal, and interest rates in general did not go down. Instead, the law resulted in a system that leaves borrowers with few options for relief.

Author(s): Walker Bragman

Publication Date: 8 April 2021

Publication Site: Jacobin Magazine