Memo to Spitzer: It's Not Your Money
Disgraced former New York Gov. Eliot Spitzer went on a rant last week. Hurling half-truths and red herring arguments in an article for Slate, he advocated jeopardizing public workers' retirement security for political ends.
Spitzer is miffed at the U.S. Chamber of Commerce for opposing the major expansion of government power being proposed in Washington. To combat the chamber, he advocates using public pension funds as a weapon.
What Spitzer does not say is what will happen to his "weapon of choice" under his strategy. Pension funds do not have a good track record when they wield the money in their care for social and political agendas.
For example, the California State Teachers Retirement System's ban on tobacco investments cost the plan $1 billion in lost gains.
Last year, the managers of CalSTRS had to do an embarrassing about-face, saying they could "no longer justify" avoiding tobacco stocks.
The chamber, he argues, has a "right to be wrong" (apparently "wrong" in Spitzer's universe is anything that opposes the expansion of government), but it doesn't have a right to do it with "our money."
It seems to escape Spitzer's understanding that money in pension funds belongs to individual retirees, in whose benefit it is supposed to be invested. It is not his personal toy to play with as he pleases or to further his — or the fund managers' — social goals.
According to Spitzer, the publicly held companies that are members of the chamber have an obligation to promote a liberal agenda — or at least not oppose it — because that's what shareholders want. What he bases this belief on is hard to fathom.
Has he polled a substantial sample of all (or at least a substantial majority of) America's publicly held company shareholders? Public company shareholders are a diverse lot; to ascribe uniform political views to them as a whole is absurd, to put it mildly.
Maybe Spitzer bases his conclusion on the political views of managers of large union and government benefit plans, rather than those of the shareholders who own stock. Even if most shareholders of a majority of companies were left-leaning, all responsible shareholders share the same goal independent of political views: increasing shareholder value.
"It is corporate leadership, through its support of the chamber, that has injected politics into the corporations that we own," Spitzer claims.
It's not support of politics that seems to irk Spitzer so much, but support of policies other than those he favors.