This diary is going to be super short. I just want to point out one factor that may explain Mayor Booker's positive defense of equity funds like Bain Capital.
I'm glad there's a bit of push back against the idea that Booker is teh pure evul. I should preface this with my observation that I've never been an enthusiastic fan of Booker though I'm glad he unseated the Newark machine that preceded him.
I'm also going to say some things that won't be popular among those who like to see financial markets exclusively through the lens of the 1% meme. I'm guessing that a few basic facts are going to piss off a lot of people because they don't fit the narrative.
On of the very big issues that urban mayors have to deal with is pension fund investments for municipal workers. These are really big complicated issues on so many levels.
Municipal union pension funds and other pension funds, bless their hearts, have not capitulated to the idiotic and inefficient 401K model of the private sector retirement savings in which individual employees with little investment experience are on their own rather than being able to combine their pension savings and put them in the hands of savvy, government employed or union employed fund managers.
The flip side is that these fund managers must make strong returns to meet pension obligations, and politicians, especially municipal political leaders must spend a lot of time making sure this happens.
Unfortunately, most pension fund managers and their political bosses simply seek the highest return without regard to the social impact of that investing. There have been rare exceptions, like when pension fund managers and urban municipal political leaders spearheaded the movement to divest from companies doing business in South Africa.
But generally, they care about return on investment.
Venture funds, equity funds, hedge funds, vulture funds -- whatever -- they make that job easier.
The higher the return from these funds, who make up a gigantic proportion of the subscriptions to such funds (i.e., subscribers to these funds are not really just top 1% earners), the less mayors have to worry about asking for union wage and benefit concessions.
It's not college buddies or campaign donations that give mayors like Booker the warm and fuzzies about equity funds; it's that equity funds help them sleep at night over pension obligations.
Unpopular fact alert: In fact, you'd be surprised at how much of "Wall Street" is actually driven the needs of pension fund managers.
Back in the 80s when I studied corporate finance, there was a rule of thumb that of the total amount invested in "Wall Street", was 1/3 rich people, 1/3 corporations/financial institutions, and 1/3 non-profits, including pension funds and endowments.
I'm very sure that with wealth concentration that has changed. But pension funds and the mayors who can't sleep at night worrying about them are still a huge part of what drives this industry -- even the awful decisions they make.
The reason a big city major would defend the equity fund industry is because it earns big returns to their pension funds even while destroying jobs elsewhere.
It is not because, as the ever conspiratorial Black Agenda Report, which few black people I know think is credible and which has hated Barack Obama since day one making their poutrage over Booker's criticism of Obama perplexing, has some weird theory that a friend of a friend of Booker was a recipient of a grant from a right wing foundation -- or whatever.
Now if you want to change the perspective of people like Cory Booker, what we really need is a much broader perspective on how to completely transform and democratize the entire system of employee pension fund investments and retirement savings. We need to change the tax and ERISA laws that favor 401Ks over pension funds and we need new pension fund laws that give employees a fully democratized say in how those funds are invested and the information to make good decisions based both on return to investment and social impact. We even need financial democracy for 401Ks which invest in mutual funds, but in which mutual fund investors have little say in what the mutual funds do.
Thah is all ah hah to sah abouh thah.