In October of 2011, when Rhode Island’s ruling class was drooling all over Gina Raimondo’s efforts to deform public sector retirement plans, a group of outcasts were occupying Burnside Park to call attention to Wall Street greed.
Two years later, Rolling Stone has a blockbuster story focusing on Raimondo and Rhode Island’s pension deform called: “Looting the Pension Funds: All across America, Wall Street is grabbing money meant for public workers.” If you haven’t read it yet, you should. Or, at least watch Matt Taibbi talk about it on Democracy Now!.
He calls the COLA freeze “wealth transfer from teachers, cops and firemen to billionaire hedge fund managers” and calls John Arnold, the moneyman behind EngageRI, to “the new Koch brothers figure.”
He also says, “Pension funds are sort of the last great big unguarded piles of money in this country and there are going to be all sort of operators who try to get their hands on that money.”
The solution that a lot of Wall Street-funded think tanks are coming up with is to get higher returns by putting these funds into alt investments like hedge funds and in a lot of cases what i;m funding is that tee fees that states are paying for these hedge finds and new type of alt investments are actually roughly equal to cuts they are taking from workers.
In the state of Rhode Island, for instance, they’ve froze the cost of living adjustment and frozen COLA roughly equals the fees they are paying to hedge funds in that state. So essentially it’s a wealth transfer from teachers, cops and firemen to billionaire hedge fund managers.