The Republicans in Congress are again pushing the idea that we have to make people work for benefits like food stamps and Medicaid. Since most people who get these benefits are already working, caring for young children or ill family members, or are themselves disabled, this seems like needless harassment of lower-income families. But, the Republican Party specializes in needless harassment of people without power.
What if, instead of imposing work requirements on people who are struggling to get by on a $126 a month (the average food stamp benefit), we instead focused on whether the people at the top are working for their money?
Specifically, let’s look at the private equity fund managers who often get hundreds of millions of dollars in fees from public pension funds for the promise to deliver higher-than-average returns, but end up costing them money. The investigative reporter David Sirota had a fascinating piece in Westword last week, showing that the State of Colorado’s main public employee pension fund had paid out over a billion dollars in fees to outside investment managers between 2009 and 2016.
We might think such payments were reasonable if these managers were market whizzes who earned the state extraordinary returns on its pension fund. But it turns out they weren’t. The returns on the state’s pension funds lagged the major market indexes. This means that the state paid over $1 billion to these investment managers over an eight-year period to lose the state money.
If you’re wondering who got this money, think of the rich people who run private equity companies. Think of people like Mitt Romney, the former Republican presidential candidate who was a partner at Bain Capital. Or, think of Steve Schwarzman, the CEO of Blackstone, who is getting buildings all over the country named after him because of his generous donations. When you get so much money handed to you by the taxpayers, you can afford to be very generous with it.