Support the Free Market? The American Federation of Teachers Wants You to Bugger Off

As free-market and
smaller-government advocates work to save money and restore fiscal
stability to states and municipalities by pushing government
employees from debt-building pensions to 401(k)-style defined
contribution savings plans, unions are obviously going to hit back.
The American Federation of Teachers (AFT) has decided to make it a
little more personal by going after anybody who works in the area
of retirement asset management who also supports a handful of
blacklisted free-market think tanks calling for such changes.

The “watch list” on their “Ranking
Asset Management” report (pdf) contains only four nonprofits:
StudentsFirst, the
Show-Me Institute, the
Manhattan
Institute, and Illinois Is Broke. The Reason
Foundation (the nonprofit that publishes this site and
Reason magazine) is not on the list, despite the
foundation’s involvement in encouraging similar reforms. We even
have our own pension policy
expert!

Anyway, the AFT warns it’s going to be looking at those who
support privatizing government retirement funds, particularly asset
managers who are “funding or playing leadership roles” in its
blacklisted think tanks. The justification in the report for
exposing these people is to identify those who make money off
pension funds yet also actively support efforts to shift government
employees to defined contribution plans. It lists the names of
several people who work at investment companies and are also
connected to the blacklisted groups. The report states, “The AFT 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, school-related personnel and other
members.”

The logic of that argument is a little unclear. It seems to want
to indicate some sort of hypocrisy, but doesn’t really do so. If
somebody who earns their money from pensions wants to shift to
defined contribution plans what does that actually mean? The
report, per usual union behavior, claims shifting away from pension
plans threatens employee retirements without any actual evidence.
Why would somebody who makes a living off retirement funds want to
shift to a system that threatens retirements? I suspect the answer
to this would be a screed against Wall Street and fund fees, but as
Union Watch at the California Policy Center notes, public employee
pensions are really
not in a position to be complaining about the vagaries of Wall
Street:

CalSTRS [The California State Teachers Retirement System]
invests in companies and financial instruments they supposedly
detest: Skip along in the
CalSTRS Annual Report to page 101 and take a look at their
“largest equity holdings.” They include Exxon Mobil Corp at the #1
position, and Chevron Crop at #5. Go back to page 45 to see where
CalSTRS has $22 billion in “Private Equity Investments.”
How many Wall Street wolves fatten themselves on that rather
substantial hunk of fresh meat?

What more does it take to make clear there is a phony war going
on between public sector unions and the financial community? This
isn’t an ideological battle, it’s an intramural struggle for
dominance between two groups who are both elitist and privileged,
who need each other far more than they need taxpayers.

“Dark money,” or money that doesn’t pass the “smell test,” seems
to be a favored meme of public sector unions these days. Especially
if that money is used to fund challenges to their interests, hence,
a new “blacklist.” But why does public sector union money, sourced
involuntarily, falling into their accounts automatically by the
millions and billions, emanating directly from taxpayers, used to
intimidate opponents, fund political campaigns and academic
studies, organize activist groups, and feed Wall Street financiers,
get a pass?