Wall Street’s reach is vast and extends deeply into nearly every aspect of American life: the products we consume, the politicians we vote for, and the information we consume. The most ghastly hustle is Wall Street targeting up to $3 trillion in unguarded government pensions, reported The Intercept.
According to The Intercept, the states of Illinois, Massachusetts, and Rhode Island recently elected governors who were all once executives and directors at investment firms that managed state pension funds. This allows those firms to be uncomfortably close to these states’ pension funds; close enough to take that money and plug it into privately managed and fee-laden investments. However, Wall Street’s pension management practices reach across the entire country.
Investment firms are essentially gambling with billions of dollars that people have spent their lives creating. As earlier mentioned, there is $3 trillion in government pension funds all across America. One-fourth of that has already been invested into hedge funds, private equity, and real estate, reported The Intercept. That’s $660 billion that belongs to people who have had their money used as profit centers for Wall Street executives.
“It’s one of the biggest economic stories in the world because the amounts of money are so huge,” said journalist David Sirota. “It is happening in every state and every city in the country.”
Furthermore, the investments aren’t even that good as they “significantly underperform against the market.” How does Wall Street get away with it? The answer is simple: lobbying. Lobbying and political donations to the “right” candidates help keep this dirty hustle alive. One of the biggest offenders is none other than New Jersey Gov. Chris Christie.
“…43 financial firms managing New Jersey pension money have spent a total of $11.6 million on contributions to New Jersey politicians,” Sirota wrote in one article. “Many of those donations have gone directly to Gov. Christie’s election campaign . . . Additionally, many of the contributions came either just before or just after the Christie administration awarded the firms multi-million-dollar pension management contracts.”
The practice of pension fund management is another way in which wealthy Wall Street executives make a buck off of the working man. These pension contracts are created under the guise that it will somehow create wealth and jobs for Americans. However, it only helps the rich.