February 27, 2017
One of the candidates for Treasurer in North Carolina is proposing to the dump the investment advisors, private equity fund managers and hedge managers who all control a portion of the state’s $100 billion public pension funds. Instead he proposes to do simple indexing of the pension fund assets. The lower costs could raise returns by as much as 1.0 percentage point a year.
This is huge money for the state. It is also huge money for Wall Street. That 1.0 percent comes to $1 billion a year of pure waste that goes into the pockets of Wall Street types. Add this up across all the state and local pension funds and we are talking about somewhere on the order of $60 billion a year being drained from taxpayers’ pockets to make the Wall Street crew richer.
This is the sort of thing that would concern economists if they were interested in efficiency, instead of just redistributing upward.
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