MoveOn.org has the video Robert Reich Explains the War on the Poor and Working Families.

On Robert Reich’s Facebook post, he asks if he is being too harsh with this video.

Here is the video.

I Democrats all over the country fail to make this the prime issue of the upcoming election, then perhaps they ought to lose control of the Senate, too.

An independent PAC is running commercials against Republican Charlie Baker for Massachusetts governor that hint at this issue. Martha Coakley, his Democratic opponent, ought to make it clear that Baker’s plan to solve whatever ills Massachusetts has by being harsher on welfare recipients is just part of the problem Reich is highlighting. Reich makes the point that you cannot fault people for not finding work when there are more people looking for work than there are jobs being offered. This puts the lie to Baker’s plan. This man, Baker, has no soul or no heart or neither one of them.

Am I being too harsh?

I have posted on this blog about the study of “cultural deprivation” as a sophomore in college as being my epiphany about what Ayn Rand didn’t tell me, and what was wrong about her philosophy. This was back around 1963.

It just dawned on me that there is probably still some literature floating around about this topic.

You can do a Google search on cultural deprivation theory definition. At the time I did this search there were only “About 1,410,000 results (0.40 seconds)” according to Google.

Wikipedia has a very short article Cultural deprivation. Part of the article states the following:

Proponents of this theory argue that working class culture (regardless of race, gender, ethnicity or other factors) inherently differs from that of people in the middle class. This difference in culture means that while middle-class children can easily acquire cultural capital by observing their parents, working-class children cannot, and this deprivation is self-perpetuating.

Some of the other Google references try to blame cultural deprivation on the parents of the deprived. This misses the whole point as far as what I studied. You cannot blame people for not teaching what it is that they aren’t even aware of. That is the self-perpetuating part of the Wikipedia definition. “Self-perpetuating” is not a value judgment on parenting skills, but it is a description of the facts of life.

If your parents didn’t educate you on cultural deprivation, then it may be that they were not aware of it themselves. Does it help to think about that to understand what it means for the cultural deprivation of others less fortunate than you. People whose parents have no experience nor any inkling of the importance of books and magazines in the home (now connection to the internet), can’t blame, and wouldn’t even know to blame their parents? This doesn’t even cover the fact that these parents are unlikely to be able to afford nor have the time to provide these amenities.

When you are working multiple jobs just to feed your family, and you are separated by distance from the support structure of the older generations of your family, then it is more difficult to provide these cultural amenities.

It is much easier for society to try to fill in some of what is missing at home. This is the basic premise of the Head Start program.

I just thought that you might want some links to the campaigns of a few candidates who could use your help. Right Now! – Put up lawn signs, contribute money, make phone calls, knock on doors, pass along these links.

I received an email from Don Berwick.

Dear Steve,

In the week that has passed since the Primary Election, I have received many emails and cards with kind thoughts and words of encouragement. Prompted by these and my own reflections, I’d like to share a few thoughts.

It has been a pleasure and an honor to serve as a candidate for governor, and the 114,000 voters who supported me are, without doubt, a future force for change.

To all of you, I have one request now: join me in full support of Martha Coakley and the Democratic ticket on November 4^th. Although we do not agree on all of the issues, I have no doubt at all that the Commonwealth’s future will be in excellent hands in a Coakley Administration. I cannot say the same about the prospect of four years under Charlie Baker and the Republican Party.

As for our efforts, I cannot thank you enough! My gratitude to all of those who supported me has grown ever stronger with the opportunity to rest and relax a bit. What you achieved on my behalf and on behalf of our shared agenda is amazing – far beyond usual expectations for a newcomer facing the uphill battle that we faced. I hope you feel proud.

We placed single payer health care on the map for our state and for the nation with more force than any prior political campaign in any state has managed to do. We stood firm in opposition to casinos for Massachusetts. We made the case for significant reforms in education, health care delivery, environmental stewardship, and criminal justice, as well as for world-class aims in our transportation system. And, most important to me, we highlighted poverty and inequality as the most important issues for our time, and articulated an agenda for the end of hunger, homelessness, and poverty in the Commonwealth. Together, we made it possible for candidates and the electorate to talk about these issues with heads held high.

I believe that the future well-being of the Democratic Party lies in its unapologetic and firm commitment to the progressive values that together we explored over and over again in this campaign: social justice, equality, and compassion in public policy. Our state and our nation are hungry for leaders who remind us all of our shared interest in these values and in human rights. The Democratic Party stands for those values and Martha Coakley will champion them.

Warmly,

Don

P.S. there have been many requests for the speech I gave on the night of the election. Click here to watch it.

Here is another good one from Naked Capitalism, US Corporate Executives to Workers: Drop Dead.

Unfortunately, Porter appears to have characterized the problem accurately when he depicts the attitude of these self-serving executives as a looting of the commons of labor, meaning much of America. And the precursor of the early industrial period show that this can be a sustainable strategy until workers finally rebel. The Bolshevik revolution, which was actually a peasant revolt, was more than a century after the enclosure movement began its successful program to turn independent yeoman farmers into desperate factory wage-slaves. So while history suggests that capitalists will push workers beyond their breaking point, that rupture can be a very long time in coming.

Maybe that means that I can continue to profit from the looting for rest of my life.  That’s a load off my mind.

Naked Capitalism has the story Investment Bombshell: CalPERS Exiting Hedge Funds by Yves Smith.

CalPERS, the largest public pension fund in the US, is widely seen as an industry leader and its practices are emulated by other public pension funds. CalPERS has just announced that it is withdrawing from hedge fund investing entirely.

This is a major development in investing-land. Having the giant California investor repudiate the premise that hedge funds are an asset class and therefore a prudent investor is obligated to invest in them will legitimate other investors, including endowments and foundations, questioning the logic of putting funds with hedge fund managers.

I just hope that the Massachusetts state pension funds can get out while the getting is good.  Our state funds have a 20% holding in Hedge Funds and Private Equity.  From what I was able to glean from the article and my previous post, Mass. pension fund posts 15.2% gain for ’13, this may be as much as 10 times larger proportion than CalPERS.

Watch this video. This is no ordinary endorsement.

Before seeing this video, I had no idea how well Martha Coakley understood the issues that Elizabeth Warren fights for. I knew that Martha Coakley had fought the big banks, but somehow, this endorsement changes how I look at Martha Coakley.

Here is the link to sign up for emails from the Coakley campaign.

Phys.org has the article Fluid mechanics suggests alternative to quantum orthodoxy by Larry Hardesty.

This story is republished courtesy of MIT News (web.mit.edu/newsoffice/), a popular site that covers news about MIT research, innovation and teaching.

The Boston Globe ran an article on January 22, 2014 Mass. pension fund posts 15.2% gain for ’13.

The pension fund beat its internal benchmarks last year in most categories, although it lagged in public real estate trusts, distressed debt, and timber holdings. The fund continued to enjoy improved results in hedge funds, with a 12.6 percent return last year versus an 8.8 percent average return for fund-of-funds.

The pension fund has shifted away from fund-of-funds, which use middlemen and charge extra fees, and is instead investing directly in a smaller group of higher-performing hedge funds. Overall, the fund expects to save $100 million in fees annually in 2015, and already has saved tens of millions.

State Treasurer Steve Grossman, who is chairman of the state pension board, said the fund’s strong results last year will help lower its $28.3 billion unfunded liability. The fund paid out $1.6 billion in retirement benefits in 2013.

“Our commitment to maximizing returns while successfully managing risk demonstrates sound fiscal leadership that will serve the interests of the Commonwealth’s taxpayers,’’ Grossman said.

Had I read that story back then, I might have thought “Oh, that’s nice”. However, after I wrote the previous post on this blog Is New Jersey Fudging Its Pension Fund Results to Deflect a Christie Scandal?, the whole thing takes on a new light.

According to the Globe article pension board chief Michael Trotsky is a former hedge fund manager who took over the pension job in 2010. 

I did better than a 15.2% gain in 2013, and I am living off my pension fund investments.  I wouldn’t touch a hedge fund with the proverbial ten foot pole.

September 15, 2014

In an attempt to start looking more deeply into this issue, I did a search of the Tresurer’s web site.

I found an article Massachusetts Pension Fund Overcharged.

“These overcharges are simply unacceptable, and we will take every step available to recoup lost funds and prevent this from happening in the future,” said Grossman. “Profiting disproportionately on the backs of the Commonwealth’s pensioners cannot be allowed to continue.”

A good sign that the Treasurer is paying attention, and intended to recoup the lost funds.

I found the 2012 Annual Report of the Massachusetts State Retirement Board. There is the chart on page 21 that gives some figures on the issue that concerns me. It shows the PRIT Fund Core Asset Allocation. Hedge Funds are 9.07% and Private Equity is 11.94% of the allocation. I don’t know how this compares to other state run investments. It is a higher allocation that this non-expert investor would like to see.

I also found a reprint of an August 6, 2014 article from The Boston Globe, Mass state pension fund rose 17.6% in fiscal ‘14. It compares the performance of Massachusetts to a few other states.

The items noted above are only the beginning of the research that would need to be done. Also, people far more expert than I in interpreting these types of documents need to have a look.

Naked Capitalism has the article Is New Jersey Fudging Its Pension Fund Results to Deflect a Christie Scandal? The article quotes from the article Gov. Christie Shifted Pension Cash to Wall Street, Costing New Jersey Taxpayers $3.8 Billion written by David Sirota and published in the International Business Times.

    Gov. Chris Christie’s administration openly acknowledged that more New Jersey taxpayer dollars were going to land in the coffers of major financial institutions. It was 2010, and Christie had just installed a longtime private equity executive, Robert Grady, to manage the state’s pension money. Grady promoted a plan to put more of those funds into riskier investments managed by Wall Street firms. Though this would entail higher fees, Grady said the strategy would “maximize returns while appropriately managing risk.”

Four years later, New Jersey has secured only half the promised results. The state has sent more pension money to big-name Wall Street firms like Blackstone, Third Point, Omega Advisors, Elliott Associates and Grady’s old firm, The Carlyle Group. Additionally, the amount of fees the state pays financial managers has more than tripled since Christie assumed office. New Jersey is now one of America’s largest investors in hedge funds.

The “maximized returns” have yet to materialize… Had New Jersey’s pension system simply matched the median rate of return, the state would have reaped roughly $3.8 billion more than it did between fiscal years 2011 and 2014, says pension consultant Chris Tobe.

What strikes me about this article is how wrong I have been in some of my assumptions about hedge funds.  I have read that hedge funds over charge their customers and under-perform the markets.  I have also read that hedge funds are investments only for wealthy, sophisticated investors.  So, putting two and two together to come up with three, I thought, so who cares if these wealthy, so-called sophisticated  investors are being taken for a ride.

If there are sophisticated investors putting money into these things, I was wrong to assume that they were putting their own money into them.  They were using OPM (other people’s money), and raking off commissions and political donations.

The people who are being taken for a ride are the taxpayers and pension beneficiaries.  It is almost a tenable position to assume that the non-wealthy are the losers in any scheme, and then go about finding out how this fact is hidden in the details.

Let’s all do some research and find out what has been reported about Massachusetts pension fund investments.  Has Steve Grossman really done as good a  job as I have been assuming?  Will Deb Goldberg do a good job in the future?

See my subsequent post Mass. pension fund posts 15.2% gain for ’13.