Eliot Spitzer could be — very heavy emphasis on *could be* — an outstanding comptroller. Scotty Stringer is an unreconstructed, resume-building hack. That’s the bottom line I’ll get to. But, there is a whole lot more here to say before ending up with that conclusion, and, patience please for all those people used to the usual uninformed discussion courtesy of the transcribers of press releases (formerly known as “journalists”) — you’ll have to wade through a bit of pension fund wonkery before getting to the juicy observations about the new candidate versus the hack. We begin with a bit of an observation about the power inherent in the comptroller’s position matched with the astounding crisis we face.
You couldn’t pick two better converging trends to explain why the country, and the world, is in such a bad state than the following: the people have been thoroughly robbed by a small group of rich people who don’t give a rat’s ass about the community and the planet AND, with few exceptions (Bernie Sanders is one of the few that comes immediately to mind), political leaders don’t really give a fuck about the robbery, or at the very least, they are of such mediocre character, and mostly consumed with their own political careers, that inertia envelopes the political process (by inertia, I don’t mean, by the way, the phony “partisan gridlock” rap — which is not actually gridlock if you look at who has gotten rich…but that’s another story).
Most of this story could be disempowering and spirit-draining. BUT…funny thing is, embedded in what might seem like a previously sleepy comptroller’s race is a diamond in the rough, a beacon of power and leverage. And it’s got sexy written all over it.
Capitalists don’t care about ethics or morality. They care about getting their hands on lots of money and using that money to exercise power and control. They will sell their mother if they can find a billion or two to invest, and they tremble with fear and anger if you threaten to take the money away or put some conditions on how the money gets spent.
Workers capital — pension fund money — is the greatest single source of money in the world. Trillions of dollars of deferred workers’ wages sit in capital pools all around the world. The New York City public workers pension funds — teachers, fire, police, board of education — total about $135 billion. That’s billion with a B. And the comptroller has a huge say in how that money gets spent.
You could actually cause a global economic revolution if that money was used correctly.
Trouble is, most of that money has ended up being used in pretty traditional ways that support the existing “free market” rules. It can be as “benign” as investments in Fortune 500 stocks. Or it can mean billions of dollars sitting in credit default swaps and other risky assets — all of which happened in the lead-up the to global financial crisis. Or it can mean handing a ton of money to a hedge fund, which turns around and pours it into a company that is viciously anti-union.
A small band of people have thought this was pure lunacy: letting the fruits of the hard labor of millions of workers flow to juice up the worst aspects of the “free market”, which, ultimately, undermined the middle class, living standards, wages, pensions and union power. Insane.
And this small band of people — some of the smartest, honest and cleverest people I’ve met and worked with– have tried, slowly but surely, to inject some change into how pension fund money is used. A lot of that work has gone into losing campaigns into improving corporate behavior — usually through shareholder actions like limiting CEO pay. Losing did not come for lack of trying but simply because the rules of the game are fixed.
That said, it doesn’t take a lot to stick-up the bad guys. Ask some hedge fund managers who were correctly targeted by the American Federation of Teachers because of their philanthropic and political support for an anti-union organization known as StudentsFirstNY. The AFT simply said, look, if you want access to billions of dollars of our pension fund money, you can’t be underwriting an organization whose basic aim is to undermine teachers’ rights. The AFT simply put out a “report card” with a “watch list” — and a number of those hedge fund guys dropped off the StudentsFirstNY board. Money talks.
Okay, so, if you wanted to ignite a revolution using pension fund money, here are two simple things to do:
Change the rules of the game. Right now, union trustees of pension funds are hamstrung by a requirement that they essentially make investments decisions that maximize the dollar financial return to the beneficiaries. But, why not allow a much broader definition of maximizing returns for the beneficiaries — say, investing in a lower risk securities that might not give back the highest percent return but is more stable. Or set down criteria that investments will only go into companies willing to be neutral in union organizing campaigns. Or perhaps consider only high-wage, unionized infrastructure projects as worthy of pension money.
Build huge alliances and pools of capital across the globe. Basically, you could dictate the rules of the markets, obliterate the phony parasitic “free market” and replace it with a market that operates on rules that spread prosperity, sharply scales back the legalized robbery in the executive suites and encourages middle-class wages. Hundreds of billions of dollars could be funneled into planet-changing and prosperity-creating-for-all projects.
Enter Eliot Spitzer.
He’s perfect for this. He’s arrogant. He doesn’t give a fuck, at this stage, what people say about him. He’s got an active mind. And anyone who has enemies like former AIG chairman Hank Greenberg — who was at the center of an accounting fraud but skated from the charges Spitzer brought against him while he served as attorney general (current AG Eric Schneiderman is still trying to have Greenberg barred from the securities industry) — is the kind of rabid dog you want to set loose on the corporate world.
He is the kind of guy who could, if he wanted, draw together a whole bunch of pension fund players with big capital pools — union leaders and corporate governance types. He’s got the resume. He’s got name recognition and a track record of skewering Wall Street. And he’d have the pension fund money at his fingertips.
Stringer, on the other hand, is an unqualified hack. He runs for this position simply because he’s out of job and can’t fathom the idea of having to look for a job outside of politics. He views the comptroller position as a nice place to sit for four or eight years until he can try, god help the city, to run for mayor.
To say he’s a narcissist isn’t really a mark against him in politics. But, worse, he’s a narcissist with a dull mind, which is even worse because people of that ilk think the world revolves around them but they can’t at least return some value for that self-centeredness. One wishes the transcribers of press releases would challenge his supporters to name a single instance — just one — of one original idea he has had, an idea that actually went from start to finish, which took on and took down an established power. It has never happened. (In fact, as an aside, go ask the residents around Columbia University about how he went back on his word on the development around Columbia and screwed the long-time residents, opting to pimp for one of the most powerful real estate interests in the city).
Indeed, it’s pretty instructive that, from the moment Spitzer jumped in the race, a steady stream of political hacks and business mouthpieces have rushed to buck up Stringer, whose only advantage to date has been that he was running unopposed and had mopped up the endorsements. There is panic in the air, make no mistake about it. Stringer is a death wish for doing nothing.
Set the rabid dog loose.