[quote=EconProf]Correct, Leorocky, the stock market has historically delivered far better rates of return than the bond market and Treasuries. That’s going back many, many decades to smooth out short term ups and downs. CA Renter may be referring to the pension funds’ poor timing in entering into the stock market, but that’s due to the managers poor choices. No one forced them to take risks–they had the same information available to them as all other investors (myself included) who lost money in the stock market meltdown.[/quote]
Again, you missed the part about Wall Street’s influence over the pension funds. It’s not just bad timing, it’s bad management that I have a problem with. The professional, conservative managers of yesteryear would not have invested in CDOs, high-risk mortgages, related derivatives, bubble-valued real estate, etc. Years ago, these funds were managed by conservative, salaried, in-house managers who invested most of the funds in Treasuries, and the rest in high-grade bonds. Today, they are managed by outside managers (hedge funds, etc.) and by in-house managers who are being advised and “sold to” by financial charlatans from the private financial sector. It is the corruption of the pension funds by Wall Street and the *private* financial sector that has caused the “pension crisis.”
