Marshall Auerback — GOP Congressional Victory – More Wall Street, More Financialisation

From Illinois to Massachusetts, voters effectively placed more than $100 billion worth of public pension investments under the control of executives-turned-politicians whose firms profit by managing state pension money. The elections played out as states and cities across the country debate the merits of shifting public pension money — the retirement savings for police, firefighters, teachers and other public employees — from plain vanilla investments such as index funds into higher-risk alternatives like hedge funds and private equity funds.… 

The upshot is that financial fragility will likely increase further in the financial sector, the finances of households will continue to worsen as their wages stagnate and indebtedness grows, and as their retirement becomes more dependent on the whims of the financial markets.

What could possibly go wrong. Economic models tell us that nothing can go wrong.

Macrobits by Marshall Auerback
GOP Congressional Victory – More Wall Street, More Financialisation
Marshall Auerback

Also
International Business Times
Midterms 2014: Election Puts Extra Pension Funds in Control Of Wall Street Financial Services

David Sirota

Former Securities and Exchange Commission attorney Edward Siedle said campaign cash from the financial industry has fundamentally shaped the debate over how to manage state pension systems. 

“Why have all pension reform candidates concluded that workers’ retirement benefits must be harshly cut, but, on the other hand, fees to Wall Street be exponentially increased?” said Siedle, who has published a series of forensic reports critical of the shift into alternative investments. “Why has no candidate dared to propose public pensions dump the costliest, riskiest underperforming investment products ever devised by Wall Street—hedge and private equity funds—in favor of proven ultra-low cost index funds, as recommended by the nation’s leading investors, Warren Buffett and John Bogle?...The answer, of course, is that more money than ever is being spent by billionaires to support a public pension Wall Street feeding frenzy.”