9/28/2003
State pension fund's financial geniuses strike again
Florida's pension fund has made some puzzling decisions.
Remember when it kept buying Enron stock even as the company was going under and lost more than $300 million? (Hiassen column from last year reprinted here.)
Now, it's investing in Edison Schools Inc. Edison went private last summer after its share price, which peaked at $37 a share, traded between 14 cents and $2.50 a share. (Herald version here.)
The St. Pete Times asks the obvious question -- Pardon the sarcasm, but was there no Enron stock left to buy?
The Edison buyout raises a host of uncomfortable policy questions for the state Board of Administration, which oversees the pension fund, and the irritation to retired public school teachers may be the least among them. Edison is largely failing as a for-profit alternative in the public school market, which means not only that any investment in its future carries considerable risk but that the buyout puts the state in the odd position of using teachers' pensions (nearly half the pension members are teachers) to prop up their adversary.
+ Josh Marshall comments:
So, you start a company to privatize education and take on the teachers unions. Your company fails miserably both in terms of the market and academic success. Then after you've hollowed the company out to cover your other bad debts friendly pols come along to bail you out with a couple hundred million from the teachers' (and other public employees') pension fund. I love symmetry.
+ Also see Reason: Hit & Run -- Crony Capitalism in the Classroom (Thanks, Tim)
Remember when it kept buying Enron stock even as the company was going under and lost more than $300 million? (Hiassen column from last year reprinted here.)
Now, it's investing in Edison Schools Inc. Edison went private last summer after its share price, which peaked at $37 a share, traded between 14 cents and $2.50 a share. (Herald version here.)
The St. Pete Times asks the obvious question -- Pardon the sarcasm, but was there no Enron stock left to buy?
The Edison buyout raises a host of uncomfortable policy questions for the state Board of Administration, which oversees the pension fund, and the irritation to retired public school teachers may be the least among them. Edison is largely failing as a for-profit alternative in the public school market, which means not only that any investment in its future carries considerable risk but that the buyout puts the state in the odd position of using teachers' pensions (nearly half the pension members are teachers) to prop up their adversary.
+ Josh Marshall comments:
So, you start a company to privatize education and take on the teachers unions. Your company fails miserably both in terms of the market and academic success. Then after you've hollowed the company out to cover your other bad debts friendly pols come along to bail you out with a couple hundred million from the teachers' (and other public employees') pension fund. I love symmetry.
+ Also see Reason: Hit & Run -- Crony Capitalism in the Classroom (Thanks, Tim)
