Underpants Gnomes again
As we all know from South Park the Underpants Gnomes work on:
1) Collect underpants
2) ??
3) Profit!
Apparently the big move in pensions funds should be to do the same thing. Here’s Jacobin on what Mamdami should do with the NYC pensions funds:
The critical capacity of New York’s public pension funds should instead be used to deliver on long-term investment in local, low-carbon infrastructure that improves the lives of New Yorkers. Such investments could support wind farms off the coast of the Rockaways, heat pumps for those who can’t escape to the Hamptons for the summer, or electric vehicle plants in deindustrialized neighborhoods in the Bronx and Queens.
As the think tank Common Wealth has argued, progressive pension reform makes it possible to create “a win-win system where patient investment in a healthy, and sustainable economy is coupled with financially secure and dignified retirement for all.” Recent moves from Comptroller Lander have shown this is already feasible. The New York City Employee’s Retirement System stepped in to save 35,000 rent-stabilized homes and keep them affordable after the lender for the apartment buildings went bust.
This is underpants. Because it’s missing that middle step.
OK, so the lender on those rent-stablised places went bust. Yes, rent-stablised places are great for those living in them (for those looking for an apartment not so much). A lender going bust is at least a useful indication that the specific form of lending is not very profitable. So, where’s the profit to come from to pay those pensions?
Equally, EV plants in The Bronx and Queens. Why are there not such plants right now? Sure, sure, they might be great for the people who get to work in them. But why isn’t capital already allocated to do that? Perhaps because it’s not profitable? Heat pump installation - how profitable is that going to be? Given that there are already commercial firms doing it and a reasonable assumption is that the reason the poor - those Hamptonless - don’t have them is because they cannot afford them.
And so on through any likely list of what the more idiot American would-be socialists would like to “invest” that money in. It’s always, but always, a list of things that capitalists will - or do - not invest in. But we do know that capitalists are greedy and will invest in what makes a profit. So, the absence of capitalists is a guide to an absence of profits and without those how are those future pensions to be paid?
That’s the 2) ?? that these schemes always fail at.
Quite true, investing in things capitalists won’t could be good for the people being invested in. But the things capitalists won’t invest in are the things that do not produce profits. How are you going to pay the pensions if there’s no profits? Taking those in their Golden Years to see the EV factories in The Bronx that they’ve got instead of a pension would wear thin pretty quickly, as would marvelling at how well that heat pump in Queens works.
Tim Worstall