Monday, August 14, 2006

A penchant for plundering pensions:

UPDATED BELOW:

Hat tip to Political Forecast and State 29, who both beat me to this Register story/Culver press release concerning economic development. If you read Chris' post, you'll see that the plan is multi-faceted, but State 29 found this line, and had reason to be upset:

Culver also suggested investing state pension dollars in venture capital funds that support Iowa businesses, especially high-tech companies.


This is insane. Thankfully, the Culver plan only calls for 1 to 3 percent of the Pension fund to be used in this manner, leaving the remaining 97-99% to be invested in Powerball tickets or left to ride on the roulette wheel.

I'm not sure how much clearer I can make this: People who have worked for the state for decades, likely at below market value, are relying on that money for food and medicine. There is absolutely no excuse for gambling that money away on the highest of all high risk investments, high tech startups.

KL

UPDATE: Chris updated his post with a link to this one. I quoted the salient points of his update in my reply:

You (Chris) said:

“I do, however, agree with Kyle to the extent that I’m glad the investment is limited that way — if for some reason — the plan would fail, only a limited amount of the total pension fund would be impacted. However, what I would like to see is a guarantee written into whatever proposed legislation that they pension fund will never go below the total amount guaranteed to recipients (based on inflation) — if that makes any sense (it made sense in my head).”

That sounds a lot like: “I’m for it, as long as it doesn’t fail.” And that’s exactly the problem. If you were looking for a place to lose money, investing in high-tech start-ups might be your best possible opportunity. I’m also not sure how that’s an agreement with what I said. Even if this idea was successful, I’m against it. At best it’s like luring a tiger into a cage with a live human child.

KL

1 comment:

RF said...

And I bet Culver, Chris Woods and co. are against privatizing a small portion of social security in much less risky mutual fund types investments. This is pathetic.