Do Unions Both Love and Hate Private Equity or Do the Atlantic's Economics Reporters Have Problems With Arithmetic?

It seems more likely that the issue is the latter. The Atlantic had a column headlined:

However as the Economist points out (cited in the update), it is not clear that limited partners, like pension funds, actually do better investing in profit equity than investing in stock index funds. There may be an issue with specific officials getting kickbacks from private equity funds, but it is not clear that unions in general would be happy about private equity funds giving them returns that trail major stock indexes.

Unions Hate Profits and Private Equity by Satisficing
written by izzatzo, January 28, 2012 4:33

As demonstrated by Herbert Simon in 1956, unions satisfice - a combination of sacrificing and satisfying that's a socialist alternative to profit maximization based on bounded rationality.

Stock index funds are not a cure for this disease since they avoid transactions cost rather than micro-managing it.

Stupid liberals.

-5

Anyone Who Doesn't Invest in Index Funds is a Fool
written by PAUL, January 28, 2012 8:12

The evidence is overwhelming that nobody can "beat" the stock market over the long term, i.e., >15 years. Even the legendary Bill Miller ultimately failed and retired in disgrace.

The only greater fool has been Bill Gross and the people who pay him to invest their money.

John Bogle was right 37 years ago and has been proved right ever since.

My Union Fought This Battle
written by Scott Supak, January 28, 2012 2:43

And, eventually, won. We got our pension funds out of these stupid investment scams, and into no-load, or low-load mutual funds, and we got rid of our high-fee 401k management in exchange for choices that include no-fee index funds.

Calpers
written by John, January 29, 2012 7:59

Calpers loves private equity. It is one of the ways they justify their unrealistic assumed rate of return. They acknowledge that current bond yields and equity market valuations will make hitting their 7.75% RR difficult to hit, but they believe PE and hedge fund investments will bail them out. And keeping their high RR is essential. Lowering it woulfd require either a reduction in benefits or additional raiding of local and state budgets.

Private Equity Funding
written by Private Equity Funding, January 31, 2012 4:41

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Do Unions Both Love and Hate Private Equity or Do the Atlantic's Economics Reporters Have Problems With Arithmetic?

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