First of all, let's acknowledge the especially obnoxious and vilifying prose that can only be found in the op-ed pages of the Wall Street Journal: "el supremo," "strong-arm," "sandbag." Is Weingarten a labor leader or a Latin American dictator?Public pension funds are frantically chasing higher yields to reduce their roughly $3 trillion in unfunded liabilities. But don't tell that to Randi Weingarten, the teachers union el supremo, who is trying to strong-arm pension trustees not to invest in hedge funds or private-equity funds that support education reform.That's the remarkable story that emerged this week as the American Federation of Teachers president tried to sandbag hedge fund investor Dan Loeb at a conference sponsored by the Council of Institutional Investors. CII had invited Mr. Loeb, who runs Third Point LLC, to talk about investment opportunities and corporate governance. Ms. Weingarten is an officer and board member of CII.But Ms. Weingarten's real concern is that Mr. Loeb puts his own money behind school reform and charter schools. In particular, Mr. Loeb is on the board of the New York chapter of StudentsFirst. That's the education outfit founded by former Washington, D.C., schools chief Michelle Rhee that is pushing for more charters and teacher accountability, among other desperately needed reforms.Ms. Weingarten sent Mr. Loeb a letter demanding a meeting at the CII conference with her and "a small group of pension fund trustees," including "two funds that are current clients of yours." Her agenda? "These plans are concerned about their ability to invest with your firm going forward," Ms. Weingarten wrote, given Mr. Loeb's support for StudentsFirst and its "outspoken attacks" on defined-benefit pension plans. [emphasis mine]
The Journal apparently reserves these descriptions for people who have the temerity to point out that giving your money to people who are working against your interests is awfully stupid. Weingarten is doing what anyone with a lick of common sense would do in her position: demanding that the funds teachers are forced to contribute to these plans not be used to screw them out of the benefits they have been contractually promised.
Only a fool or a sophist would argue that this is "bullying" behavior. But the WSJ op-ed page is where fools and sophists live and thrive:
So let me get this straight: if I don't want to give my money to people who are trying to screw me out of my compensation, I'm a bully? Does the WSJ think I shouldn't smack a purse snatcher upside the head if he tries to make off with my wife's handbag? Maybe I should, instead, hand the guy my wallet before he runs away?But no one should think that Mr. Loeb is Ms. Weingarten's only target. Her attempted ambush coincides with a new report that her union sent to pension trustees this week called "Ranking Asset Managers." Ms. Weingarten isn't interested in how they rank by return on investment.Her "rankings" are all about politics. The union report says it wants pension trustees to "take into account certain collateral factors, such as a manager's position on collective bargaining, privatization [read: vouchers] or proposals to discontinue providing benefits through defined benefit plans."The report adds the lovely threat that "The American Federation of Teachers is committed to shining a bright light on organizations that harm public sector workers, especially when those organizations are financed by individuals who earn their money from the deferred wages of our teachers."
What's really angering the Journal here is that unionized middle class workers are getting together and beating Wall Street at its own game. Corporations throw money around all the time to get what they want: around Washington, around the statehouses, and especially around the media. The minute unions do the same, however, the mouthpieces for the plutocrats get very, very nervous. And they will drag out any stupid argument they can think of to try to stop it:
The other issue raised by this union bullying concerns fiduciary responsibility. The main obligation of pension trustees is to ensure the retirement security for their members. These pensions are financed primarily by taxpayers, not by employee wages, and the funds are under no obligation to protect union interests or to promote Ms. Weingarten's pet political causes. To the extent that her causes interfere with getting higher returns from the best-performing investment funds, the trustees would be violating their duties and the law to take her bad counsel.That is the kind of patronizing crap that makes me insane. Let's get this straight once and for all: public employee pensions are deferred compensation. The pensions are not "financed by the taxpayers"; they are financed by public employees who defer pay in a deal that is good for the taxpayer.
It is obnoxious beyond belief that the WSJ would pretend that I and every other public employee receiving a pension didn't earn that compensation. And we have every right to demand that our money not be used to undermine our profession. That's the real "fiduciary responsibility" of the unions.
(By the way - notice how Loeb's largess toward StudentFirst is "his own money," while teachers' mandatory pension contributions are "financed by the taxpayer"? Speaks volumes, doesn't it?)
You know, I'm so old that I remember when "fiduciary responsibility" was used to justify investment in South Africa. The Journal was happy to find any excuse to support the Botha regime; leave it to them to continue to play the race card until this very day:
Man, it takes a special kind of gall to print a statement like that. Somehow, Loeb's support of StudentsFirst has morphed into "funding for poor kids in Harlem"; as if funding Michelle Rhee's astroturfing was incontrovertibly to the benefit of "poor kids in Harlem."And this is the real source of Ms. Weingarten's union fury. She knows unions are losing the moral and political debate over reform, as more Americans conclude that her policies are consigning millions of children to a life of diminished opportunity.So now she stoops to bullying pension trustees to bully hedge funds to cut off funding for poor kids in Harlem. Every time we wonder if we're too cynical about unions, they remind us that we're not nearly cynical enough.
Here's a thought: how about supporting "poor kids in Harlem" by getting rid of the outrageous tax loopholes for hedge fund managers! So we can use the money to give all children have a chance to go to a well-funded school, and not just a select few.
Not as much fun as beating up teachers for looking out for their own interests, I guess...
Thurston, tell the Journal to put those nasty teachers in their place!
ADDING: More from Substance News.