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Retirement Funds and Structural Exploitation

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This story of where Jill Stein has invested her money is reasonably interesting, if just a tad bit unfair. Basically, her retirement is tied up in mutual funds that are terrible because they exploit labor and the environment. Does that make Stein a hypocrite? No, I don’t think so. It does make her unfortunately unaware of the inconsistencies between her life and her retirement money. But I have to say that we could almost all say this, if we are lucky enough to have any retirement package. When the story came out last year about TIAA-CREF investing in such lovely things as stealing lands from Brazilian farmers in order to cut down rain forests, I brought it up to other faculty members that maybe we should do something about this. But it was pretty well shot down because, as others stated, nearly any decently performing retirement fund is involved in the most profitable ventures, i.e., the industries of global exploitation. I’m not saying I agree with that decision, but I do understand it in a society where anything more than the most threadbare retirement is based upon your work life, as is most of the American welfare state. Until that ends, all the incentive is to have the most secure retirement possible by any means necessary. The upshot of this is that we might make all the consumer choices we want that make us feel good about our choices. Buy the Prius, shop at farmers’ markets, whatever. But in what is likely our greatest impact upon the shape of global capitalism–our retirement investments–most of us are complicit with some of the greatest crimes in creating a just and sustainable planet.

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  • Snarki, child of Loki

    Can you really “get out” of TIAA-CREF? Regular mutual funds, sure, you have more flexibility.

    • Anonymous Troll

      We absolutely must require every retiree to be responsible in damages for the entire supply chain of their retirement incomes. It is the only way to be sure of putting an end to bad practices.

      • Snarki, child of Loki

        Perhaps something like the “carbon-offset” stuff is possible, so that ON NET, your socially-irresponsible investing can be countered by an appropriate amount of SJW-ing.

        So, for every $10K in “bad” investments, we shoot a right-winger? Sounds about right. Hold still.

        • Ahuitzotl

          Holding still is incompatible with our Freedoms! The constitution requires that you shoot at moving targets.

  • Gareth

    My retirement fund is both profitable and completely consistent with my moral principles.

    • yet_another_lawyer

      That is unlikely to be true, unless you don’t have any moral principles.

      • Or no retirement fund.

      • Gareth

        My secret is out.

        • MAJeff

          That’s been obvious for quite some time.

          • Gareth

            Seriously, if your moral principles are giving you so much financial trouble, maybe they’re bad principles.

            • postmodulator

              As most adults know, doing the right thing is always extremely easy.

      • cpinva

        “That is unlikely to be true, unless you don’t have any moral principles.”

        I’m pretty much amoral on a lot of things. read the prospectus of any fund you’re considering investing in, or what other funds your 401(k) is invested in, and see if you can live with it. with the 401(k), the covered employees can demand that the investments be changed, to suit their moral suasions.

        • Mellano

          They can demand HR look at alternatives. Doesn’t mean it will happen.

    • econoclast

      I only invest in alcohol, tobacco, and firearms, but to absolve myself of my sins I’m voting for Jill Stein.

      • cpinva

        I’m in a fund that invests in alcohol/tobacco/gambling/defense. and your point would be?

      • ASV

        All my money is in vaccines and wifi.

        • Snarki, child of Loki

          I hear that TULIPS are going to be growing rapidly, this spring. Get in now!

          • Julia Grey

            Just don’t buy a basket of mixed bulbs, or a derivative species.

  • yet_another_lawyer

    I suppose Stein deserves it given her holier-than-thouism, but the reasoning here is just daft. To take the first example:

    Stein’s controversial investments include:
    Big Carbon. On Oct. 26, 2015, Stein’s campaign sent out a statement calling for Exxon to get the death penalty for its “climate-change fraud.” (it should be noted that Stein has called for the abolition of the death penalty for human beings). She has also repeatedly called for public pension funds to divest from companies in the fossil-fuel industry.
    Yet Stein has invested $995,011 to $2.2 million in funds such as the Vanguard 500 fund that maintain significant stakes in Exxon and other energy companies like Chevron, Duke Energy, Conoco Phillips, and Toho Gas, a Japanese company that engages in the sale of natural gas, tar, and coke, a fuel made from coal.

    The Vanguard 500 found… aka a standard S&P 500 fund that just passively invests in 500 of the largest American companies. Granted, the money isn’t equally split between those 500 companies, but taking the high-end $2.2 million valuation, Stein owns an average of $4,400 in each S&P 500 company. Come the fuck on. It’s entirely reasonable to say something like, “I’d prefer a lot of policy changes, but I’m going to invest my money passively in indexes.” Passive investing is better for a lot of reasons, and once you go down the rabbit hole of evaluating companies based on your politics, it’s inevitable you’ll eventually find something you don’t like no matter what company you’re looking at.

    • Mellano

      Plus it’s Vanguard, so she’s paying less in fees to the financial industry than with just about any other widely available index fund company.

      There’s an interesting question whether “passive” investing discourages oversight of public companies by large shareholders. But from the perspective of the worker this is effectively as little agency as one can have while not aiming for the retirement of a hermit.

  • Lost Left Coaster

    Not a Stein fan — not by a long shot — but the whole “your mutual fund is evil!” line of argument is pretty weak against her. Reminds me of the time that a friend of mine took a break from a protest we had organized to smoke a cigarette and a guy walking by, who seemed to be wholly unsympathetic to the cause (anti-sweatshops in front of a Gap store) but just wanted to give some hippies some grief, berated her for 10 minutes about being a hypocrite because big tobacco is evil. Yes, big tobacco is evil, and smoking is a bad idea. Doesn’t mean my friend couldn’t protest sweatshops. Pobody’s nerfect.

    • yet_another_lawyer

      Back in the OWS days, an incredible amount of online ink was spilled over issues like that– e.g., do you maximize the money you have by buying tents from the cheapest supplier (inevitably, Amazon or Wal-Mart) or do you stick to your principles, making sure you’re buying tents from a unionized, environmentally friendly, fair trade, politically acceptable, LGBT-friendly manufacturer and seller? For movements genuinely strapped for cash, I don’t think this has an easy answer.

      • BiloSagdiyev

        Who even makes tents like that? Patagonia? For the price of that level of tent…. MANY Wal Mart tents.

        • yet_another_lawyer

          That was part of the problem. To the best of my recollection, nobody ever found a company that was ideologically pure enough. I bet most of the tents did just end up coming from Wal-Mart or similar.

    • Snarki, child of Loki

      Does anyone have a good list of TOTALLY EVIL MUTUAL FUNDS?

      Asking for a fiend.

      • cpinva

        depends, what’s it worth to them?

    • los

      hypocrite because big tobacco is evil.
      (Although, tobacco is addiction, usually incurred during childhood, often pre-teen.)

      Pobody’s nerfect.
      So you’ll be joining our class-action lawsuit against you, for choosing a bad spellchecker.

      • los

        “OMG, the tobacco plant was irrigated with water that was dinoaur pee at one time. You’re smoking may be complicit in a dinosaur having been frightened enough to have WET ITS BED. Purity! I’m calling PETA, you hypocrite.”

        “OMG, you just crossed that street! A CHILD MOLLESTER bought gas near the freeway exit of the same town! YOURE WURSE THAN A MARKSKISS ABORCHINNIST DOCTERR! BURN, WITCH!”

    • los

      “your mutual fund is evil!” line of argument is pretty weak (I think trying to emulate institutional divesting tactic. But boycotts work only when effect is massive. Lysistrata is fiction)

      • los

        This is the same Purity that persecutes the good guys for higher ethical standards, while applauding or excusing the bad guys’ dirtier (political, etc) tactics.
        Given that choice, some people pretend that Purity is reason to favor Greater Evil, instead of (at least) favoring Lesser Evil.

        Trump – nobody can cite any Trump activity that doesn’t benefit himself.
        Altcucks: “Fidoochial dooties11!! A smart businessman pursues the higher ROI of protection rackets and buying tax subsidies. Trump is The Best Winner. We lovingly grovel (sniffle) before Trump’s superior corruption. We demand that you raise our taxes to cover The Winners’ subsidies. Get your government hands off of Trump’s tax breaks.”

        Clinton – maneuvers through politics well enough to win against conservatives, who pursue ever dirtier/corrupt politics as a principle.

    • los

      (anti-sweatshops in front of a Gap store) but just wanted to give some hippies some grief, berated her for 10 minutes about being a hypocrite because big tobacco is evil

      Hannibal Lecter would convince an altcucks that giving the shirt off his/her back is inadequate – only the skin off the back is good enough.

      Noticeably, most of the useful altcucks are following[1] not far behind Hannibal Lecter…

      _______
      1. … non-literally as of now. But let us not try predicting next year.

  • GeorgeBurnsWasRight

    TIAA-CREF offers several social responsibility funds. Don’t any of them fit your criteria, or does your school not offer them?

    • They do, but of course they largely perform at less successful rates than the regular funds.

      • cpinva

        which means you and your colleagues are going to have increase your annual investment amount, to get the same rate of dollars back. it is a conundrum.

        • Yeah, definitely. Not to mention actually paying attention to my retirement account, which is not exactly the top priority in my life. Or any priority. And yeah, yeah, it should be for reasons not about social justice. But it’s just not, not when I am still paying student loans.

  • TroubleMaker13

    Basically, her retirement is tied up in mutual funds that are terrible because they exploit labor and the environment. Does that make Stein a hypocrite? No, I don’t think so. It does make her unfortunately unaware of the inconsistencies between her life and her retirement money.

    For the most part, but not entirely. I’m starting to sound like a broken record, but Stein owns up to $100K in Merck stock– not holdings in some mutual fund, but direct stock holdings. This despite her pandering attacks on Big Pharma. She wants to make an issue out of the Clintons’ finances, but she expects a pass for her own accumulation of wealth (upwards of $4M) and conflicts of interest in her own investment portfolio. It’s not the worst thing about her maybe, but it is hypocritical.

    • yet_another_lawyer

      Is there any word on where the Merck stock came from? It’s mentioned in the article she inherited half a million from her parents. If part of that estate was the stock and she just never bothered selling it, that’s a bit different than actively choosing to buy it. Inheritance would be my guess, given her revealed preference for investing passively.

      • TroubleMaker13

        She’s been pretty cagey about her personal finances, even while she’s made an issue of Clinton’s.

        If it was important to her, she could divest. She’s talking out of both sides of her mouth– assailing the influence of Big Pharma while she profits from it. She bitterly criticizes Clinton for accepting donations to the Clinton Foundation from unsavory businesses and governments, while she herself profits personally from unsavory businesses.

        I mean, I totally agree that this is really all pretty banal and unremarkable, but Jill Stein herself wants to make an issue out of it– so yeah, hypocrisy.

        • TroubleMaker13

          BTW, when I say “banal and unremarkable” I’m talking about Stein’s finances.

          I think the point Erik’s really making in this thread– that the lack of sensible social welfare policy in this country forces us individually to hitch our personal fortunes to the exploitative corporate economy if we don’t want to be eating catfood and dying in the gutter in our old age– is a crucial one.

          • los

            that the lack of sensible social welfare policy in this country forces us individually
            What? You disparage Individual Freedoms to be forced to obey “divided we fall”?

            to hitch our personal fortunes to the exploitative corporate economy if we don’t want to be eating catfood
            Catfood is too expensive, you parasite. You’re one of those lobster food stamp queens!
            /tea

            and dying in the gutter in our old age
            Also, law rigged by and for oligarchs forces the “booby prize” of
            social welfare policy
            Conservatives are anti-merit.

  • MacK

    You know, for someone who likes to condemn the !%, and indeed profiteering in the delivery if health care, Stein and her husband, both doctors, seem to have done remarkably well out of the system, better than most physicians – and she retired remarkably early to a life as a political dilettante activist. A mere $370k last year, with her doing so much to contribute. Investments excluding one’s home and vacation homes, rental property, office of $3.8 to $8.5 million are, well normal, not rich…at the high end she’s in the 1%

    Hmmmm – you think she’d spend a little time discussing how that contributes to health care costs.

    • cpinva

      well, in fairness, most health care costs have nothing to do directly with Dr.’s fees. admittedly, a lot of it is indirect (prescriptions, etc), but the Dr.’s aren’t supposed to be directly profiting from that.

  • delazeur

    Basically, her retirement is tied up in mutual funds that are terrible because they exploit labor and the environment.

    Most of my own retirement is in mutual funds and ETFs that track the S&P 500. That makes me a party to a great deal of environmental and labor abuse, but at the same time, I’m not sure that pegging my wealth the global economy makes me that much more complicit in that abuse than funding my lifestyle with wages from the same system. Those abuses also provide me with a safe place to live, access to a lot of good food (if I can afford it), reliable power and water, etc. Actually buying stock in abuse companies feels like it might be a different matter for ethical purposes, but I’m not sure.

    Buy the Prius, shop at farmers’ markets, whatever.

    I’m way too lazy to dig up sources (sorry, feel free to ignore me), but at the very least I believe Priuses and farmers’ market food have comparable carbon footprints to alternatives. They might be a marginal improvement over alternatives in labor terms and non-GHG environmental terms, but I would be surprised if they are enough to justify patting yourself on the back for doing to the world a favor.

    But in what is likely our greatest impact upon the shape of global capitalism–our retirement investments

    I’m not sure I agree with that. It is likely true for the academics here, but I would imagine that a lot of the rest of us do more to grease the wheels of global capitalism with our day jobs than with our investments. I believe that I do, at least.

  • Chetsky

    I don’t get it. Spilling pixels restating what others have said, perhaps, but isn’t this the liberal version of

    Heu heu heu, Warren Buffett says we should raise taxes, why doesn't he just contribute more to the USG voluntarily? Heu heu heu

    And I recall that Krugman had a great retort, which was basically

    This is called civic-minded-ness

    You can participate in something that is -legal-, and yet be against the thing as a matter of public policy. The thing is, you better -actually- be against the thing, and not just posturing, I guess.

    • Chetsky

      Urk, looks like I got the HTML wrong there. I meant the “civicmindedness” to be in the blockquote, not the para following.

  • (((Hogan)))

    On the point that the [Salvation] Army ought not to take such money, its justification is obvious. It must take the money because it cannot exist without money, and there is no other money to be had. Practically all the spare money in the country consists of a mass of rent, interest, and profit, every penny of which is bound up with crime, drink, prostitution, disease, and all the evil fruits of poverty, as inextricably as with enterprise, wealth, commercial probity, and national prosperity. The notion that you can earmark certain coins as tainted is an unpractical individualist superstition. None the less the fact that all our money is tainted gives a very severe shock to earnest young souls when some dramatic instance of the taint first makes them conscious of it. When an enthusiastic young clergyman of the Established Church first realizes that the Ecclesiastical Commissioners receive the rents of sporting public houses, brothels, and sweating dens; or that the most generous contributor at his last charity sermon was an employer trading in female labor cheapened by prostitution as unscrupulously as a hotel keeper trades in waiters’ labor cheapened by tips, or commissionaire’s labor cheapened by pensions; or that the only patron who can afford to rebuild his church or his schools or give his boys’ brigade a gymnasium or a library is the son-in-law of a Chicago meat King, that young clergyman has, like Barbara, a very bad quarter hour. But he cannot help himself by refusing to accept money from anybody except sweet old ladies with independent incomes and gentle and lovely ways of life. He has only to follow up the income of the sweet ladies to its industrial source, and there he will find Mrs Warren’s profession and the poisonous canned meat and all the rest of it. His own stipend has the same root. He must either share the world’s guilt or go to another planet. He must save the world’s honor if he is to save his own.

    Bernard Shaw, Preface to Major Barbara (1905)

    • cpinva

      good play, and still plays well today.

    • BiloSagdiyev

      Well, I bet they don’t sell his books at Hobby Lobby!

      • los

        and I doubt hobby lobby sells Krugman‘s books.

  • xaaronx

    Joke’s on you: I’m paycheck to paycheck and can’t afford to save for retirement even though I’m in my mid-thirties. My conscience is clean! Now if the Republicans manage to repeal the ACA, maybe I can die young enough that it won’t matter.

    • los

      Republicans manage to repeal the ACA, maybe I can die young enough that it won’t matter.

      Alan Grayson’s Blank Sheet of Paper theorem 2:
      Dead voters don’t vote.

      To the altcucks: How do you “flyovers” like that election rigging by your Billionaire “Blue Collar” messiahs?

  • azumbrunn

    I would go one step further: It is very unfair to savers–individuals with relatively small amounts of investments in retirement or other funds–to hold them accountable for what the investment professionals do with their money.

    To clean up this mess you need more powerful actors than individual savers.

    Don’t say it out loud: You need big government!

    • los

      Yes. The larger scale logic contrasts:
      real world effectiveness vs hastily tempting shallow ineffectualness.

  • Mike B.

    Actually, I don’t think the Social Choice accounts have lower returns. The 10-year average annual return for Social Choice Equity is 6.22%, for CREF Stock Account is 4.94% and for CREF Equity Index it is 6.32%. Of course, if you look at what the Social Choice accounts hold, you might not like some of the companies.

  • Joe

    I’ve diversified. My retirement is heavily in Microsoft stock. Either I retire rich, or Microsoft fails. Either way, I win.

    • los

      You’re biversified. /s

      Too bad for you that (as I’ve read) kochindustries is privately owned.

      (and in other bad news for John McCain: the Moderate Maverick Francisco Franco is still dead.)

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