10:35 am Dec. 14, 2012
Yesterday, former president Bill Clinton and Shaun Donovan, Obama's housing secretary and Hurricane Sandy point person, hailed a New York City teachers pension fund commitment to invest $1 billion in regional infrastructure.
The plan has the support of comptroller John Liu, United Federation of Teachers president Michael Mulgrew and American Federation of Teachers president Randi Weingarten, but not, as it turns out, Mayor Michael Bloomberg.
Bloomberg's argument, as told to John Gambling during their regular Friday morning radio appearance is, basically, that the impulse to invest in infrastructure is a good one, but it's also at odds with the purpose of a public employee pension fund, whose returns are guaranteed by the government and therefore must be purely profit-driven.
"Pension funds have to be run to maximize the return for the pensioneers," said the mayor. "And in the case of pension funds where their returns are really guaranteed by law, it's really the taxpayers that have to make sure the returns are high.
"So the people with a stake here are not the unions. It is the taxpayer, and I think the taxpayers want to have the return maximized and if the taxpayers also want to put money into infrastructure, like they're doing, you should really do that separately. And I happen to think we should do it, incidentally. But confusing the two, no rational business would run that way."
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