VIDEO: Jonathan Williams on The Wall Street Journal’s Opinion Journal Live
It’s time to drain the government pension swamp
Jonathan Williams, ALEC chief economist and vice president of the Center for State Fiscal Reform, discussed the Center’s latest report, Keeping the Promise: Getting Politics out of Pensions on The Wall Street Journal’s Opinion Journal Live. Instead of investing to earn the best returns for workers, some public officials use pension funds in a misguided attempt to boost their local economies, provide kickbacks to their political supporters, punish industries they don’t like, reward the ones they do, bully corporations into silence and behaving as they see fit.
As Williams explains on Opinion Journal Live, placing political agendas ahead of what is best for workers is pension fund cronyism, and it is happening in pension funds throughout the country. For example, the former chair of the California Public Employee’s Retirement System (CalPERS) Investment Committee, Charles Valdes, allegedly accepted gifts from a fellow board member, Alfred Villalobos. When questioned about his dealings with Villalobos, Valdes invoked the Fifth Amendment 126 times. According to the Manhattan Institute for Public Policy Research, during his tenure, CalPERS had one of the worst investment records of any public pension fund.
As The Wall Street Journal interview points out, there are positive solutions to help policymakers drain the government pension swamp. Strong fiduciary standards—such as the standards outlined in Keeping the Promise: Getting Politics out of Pensions— can guarantee responsible, accountable and proper government pension fund management. Getting politics out of pensions can help governments keep their promises to hardworking workers, retirees and taxpayers.