Support the Free Market? The American Federation of Teachers Wants You to Bugger Off
As free-market and smaller-government advocates work to save money and restore fiscal stability to states and municipalities by pushing government employees from debt-building pensions to 401(k)-style defined contribution savings plans, unions are obviously going to hit back. The American Federation of Teachers (AFT) has decided to make it a little more personal by going after anybody who works in the area of retirement asset management who also supports a handful of blacklisted free-market think tanks calling for such changes.
The "watch list" on their "Ranking Asset Management" report (pdf) contains only four nonprofits: StudentsFirst, the Show-Me Institute, the Manhattan Institute, and Illinois Is Broke. The Reason Foundation (the nonprofit that publishes this site and Reason magazine) is not on the list, despite the foundation's involvement in encouraging similar reforms. We even have our own pension policy expert!
Anyway, the AFT warns it's going to be looking at those who support privatizing government retirement funds, particularly asset managers who are "funding or playing leadership roles" in its blacklisted think tanks. The justification in the report for exposing these people is to identify those who make money off pension funds yet also actively support efforts to shift government employees to defined contribution plans. It lists the names of several people who work at investment companies and are also connected to the blacklisted groups. The report states, "The AFT is committed to shining a bright light on organizations that harm public sector workers, especially when those organizations are financed by individuals who earn their money from the deferred wages of our teachers, school-related personnel and other members."
The logic of that argument is a little unclear. It seems to want to indicate some sort of hypocrisy, but doesn't really do so. If somebody who earns their money from pensions wants to shift to defined contribution plans what does that actually mean? The report, per usual union behavior, claims shifting away from pension plans threatens employee retirements without any actual evidence. Why would somebody who makes a living off retirement funds want to shift to a system that threatens retirements? I suspect the answer to this would be a screed against Wall Street and fund fees, but as Union Watch at the California Policy Center notes, public employee pensions are really not in a position to be complaining about the vagaries of Wall Street:
CalSTRS [The California State Teachers Retirement System] invests in companies and financial instruments they supposedly detest: Skip along in the CalSTRS Annual Report to page 101 and take a look at their "largest equity holdings." They include Exxon Mobil Corp at the #1 position, and Chevron Crop at #5. Go back to page 45 to see where CalSTRS has $22 billion in "Private Equity Investments." How many Wall Street wolves fatten themselves on that rather substantial hunk of fresh meat?
What more does it take to make clear there is a phony war going on between public sector unions and the financial community? This isn't an ideological battle, it's an intramural struggle for dominance between two groups who are both elitist and privileged, who need each other far more than they need taxpayers.
"Dark money," or money that doesn't pass the "smell test," seems to be a favored meme of public sector unions these days. Especially if that money is used to fund challenges to their interests, hence, a new "blacklist." But why does public sector union money, sourced involuntarily, falling into their accounts automatically by the millions and billions, emanating directly from taxpayers, used to intimidate opponents, fund political campaigns and academic studies, organize activist groups, and feed Wall Street financiers, get a pass?
