FRONT PAGE CONTRIBUTOR
The side effects of a big bureaucracy
When we allow government to grow large, and especially large and unionized, the effects on our society are greater than just the weight of the government yoke on the backs of the American people. There are other, hidden effects to consider when such concentrations of left-wing power are brought together.
That is a lesson all Americans can take from the latest from the California Public Employees’ Retirement System, CalPERS. Consider what will be ahead for CalPERS if Muriel Strand, a candidate for the CalPERS Board of Administration, gets her way:
I believe retirees’ real economic needs – clean air and water, healthy food, and warmth – are more important that strictly financial benefits, which could conceivably fall short of what’s needed even with the COLA.
That’s right; she’s ready, willing, and able to sacrifice the people she’s charged with looking out for, by sacrificing their retirements in order to push her radical left-wing political agenda. There’s no guarantee she’ll win, but her words are already in line with long-standing CalPERS trends.
Said the Wall Street Journal last March:
Deputy Treasury Secretary Robert Kimmitt recently spelled out a few policy principles for sovereign wealth funds (SWFs), the most important of which was this: “Invest commercially, not politically.” Mr. Kimmitt’s concern is that “governments could conceivably employ large pools of capital in noncommercially driven ways that are politically sensitive.”
Anyone interested in evidence of such behavior needn’t look beyond America’s borders. If California were a national economy, it would be the eighth largest in the world. And its Public Employees’ Retirement System, Calpers, with $259 billion in assets, would rank fifth among the world’s SWFs. Combine it with the $169 billion California State Teachers’ Retirement System (Calstrs), and California runs the second largest SWF in the world, just behind the United Arab Emirates.
….Developing-country investment restrictions based on political factors and labor practices began in earnest in 2002 under the direction of then-state treasurer and Calpers board member Phil Angelides. These quickly put 14 of 27 such countries examined by Calpers off limits. When the Philippines was proposed for exclusion in 2004, its stock market and currency plunged. Spurred into action by the Philippine ambassador and heeding a call from Sacramento priests, six busloads of Filipino-Americans besieged a Calpers investment meeting, forcing officials into an embarrassing volte face. Mr. Angelides nonetheless called for Calpers to increase “positive pressure” on foreign governments. “It would be a mistake to walk away from an activist policy,” he said.
….The fund touts “good corporate governance.” But the actual investments it trumpets typically relate to labor and environmental practices, not shareholder concerns.
Emphasis added. CalPERS attempts to use its market power to dictate to private corporations at home and around the world. Its union-driven membership attempts to get in on the ownership side of union disputes, tilting the playing field for publicly-listed coprorations against the other shareholders. Further, they also use that power to dictate a radical “green” agenda to the corporations they influence.
They buy in bad faith. This is merely one illustration of the dangers of having too many government employees. It’s about more than just the direct effects of burdensome taxation and legislation. We create institutions with reach far beyond what we imagined.