Imagine someone walking up to an elderly person and asking if they can help you across the street for a price, but when questioned on what they will do, they put on their cleats and say they'll "help" by kicking you into oncoming traffic. No one in their right mind would be that stupid or arrogant, right? Wrong, says Matt Taibbi.
When he comes to speak at CII, Loeb will almost certainly be seeking new clients. There will be some serious whales in these waters: For instance, CalSTRS, the California State Teachers' Retirement System, will definitely be represented (Anne Sheehan, the director of corporate governance for CalSTRS, will be moderating Loeb's panel).
But here's the catch. Dan Loeb, who isn't known as the biggest hedge-fund asshole still working on Wall Street (only because Stevie Cohen hasn't been arrested yet), is on the board and co-founder of a group called Students First New York. And Students First has been one of the leading advocates pushing for states to abandon defined benefit plans – packages which guarantee certain retirement benefits for public workers like teachers – in favor of defined contribution plans, where the benefits are not guaranteed.
In other words, Loeb is soliciting the retirement money of public workers, then turning right around and lobbying for those same workers to lose their benefits. He's essentially asking workers to pay for their own disenfranchisement (with Loeb getting his two-and-twenty cut, or whatever obscene percentage of their retirement monies he will charge as a fee). If that isn't the very definition of balls, I don't know what is.
It's one thing for a group like Students First to have an opinion about defined benefit plans in general, to say, as they have, that "today's district pensions and other benefits are not sustainable and contribute to a looming fiscal crisis." But it's another thing for a VP of Students First like Rebecca Sibilia to tweet the following just a few weeks before one of its board members asks for money from a fund like CalSTRS:
Outdated & underfunded #pension systems like CALSTERS break promises to #teachers#edreform #thinkED http://huff.to/15vdALJ via @HuffPostEdu
If this isn't Gordon Gecko writ large, I don't know what is. "Hello, teachers. Invest with me, and I'll make sure your pensions make a lot of money by eliminating your jobs! And your pensions, too -- even after they're entrusted with me for maximum investment return."
Loeb serves no one but himself. After giving a six-figure donation to Obama in 2008, he turned tail and gave over twice that amount to Republicans. He also funded a series of ads against the Obama administration's policy on Palestine through the same front group that opposed Chuck Hagel's nomination and ran all those "Democrats hate him too" ads -- the Emergency Committee for Israel.
Loeb's little rant to his investors in 2010 drew the scorn of RJ Eskow:
A hedge-fund manager's "investor letter" -- really more of a staged, theatrical tantrum -- has been getting a lot of attention lately. Daniel S. Loeb's diatribe demonstrates that banker greed is still out of control, and that it's as shortsighted and destructive as ever. The fact that Loeb is a registered Democrat and former Obama supporter doesn't matter as much as some people think. It's the same old story: Politics is just a means to an end, and the end in this case is self-enrichment.
If Loeb's pose as Hedge-Fund Revolutionary seems like a ridiculous form of populism, remember: The Tea Party began with an angry outburst on the Chicago Board of Trade, from traders who were outraged that homeowners might be given a fraction of the aid bankers received. Loeb's letter is mostly a marketing ploy, but if he can become the Robespierre of the Hedge-Fund Revolution I'm sure that would be fine with him, too.After all, that would be good for business.
This is why StudentsFirst is not ever, ever to be trusted. Loeb denies he had any knowledge of StudentsFirsts' attitude toward pensions over 401ks. Nonsense. Of course he did. They don't keep it a secret. They actively campaign against teachers' pensions on their website, they have an action page, and have been lobbying to kill teachers' pensions in Florida and other states. It's part of their overall state report card. He was just hoping to pull the wool over everyone's eyes.
In Taibbi's article, he describes an eye-opening exchange between AFT President Randi Weingarten and Loeb. She offers to meet with him to explain why it is a spectacularly bad idea to be a board member on StudentsFirst while soliciting teachers' pension trustees as investors. As the back-and-forth continues, Loeb suddenly isn't available for the sales meeting he solicited.
Well, of course he's not. That would require accountability, and as Taibbi says, Loeb is one of a group who "...can swoop in, make a pitch after a fancy lunch or two, and then take big chunks of that cash to buy private jets and Picassos."
Right. Profit über alles.
