The world around us is filled with irony, none more obvious than in politics. Take the liberal argument for more federal control over the economy is better than less regulated, freer markets. Even as pensions rise on Trump’s stock market, liberal groups push money to anti-Trump, pro-government Democrats. Why?
Generally, pro-central-government leaders push policies that slow private growth, such as increased regulation of small businesses, higher taxes, and reduced individual liberty and risk-taking. They believe government makes better decisions, should redistribute private wealth to assure “outcome equality” and “social justice.”
Those with greater trust in the private sector, free markets and individual liberty take a different view. They embrace calculated risks, private investment in the future, and higher returns. They may suffer losses but are resilient. They recognize the upside as worth the risk.
The irony becomes acute when liberal leaders and groups favoring more federal control – get a windfall from policies they historically oppose. That is happening today. Liberal groups simultaneously fund those opposing Trump’s growth policies, while gaining from them.
Examples are helpful. Take teachers’ unions, like the National Education Association and American Federation of Teachers, which respectively contributed approximately $20 million and $12 million dollars during the 2016 cycle – chiefly to those opposing Trump’s polices.
A look at public records pops two facts: Teachers unions have dramatically increased their political involvement between 2004 and 2016, going from $4.3 million to $32 million in contributions in that time. And this: The top 20 recipients of teachers’ union money were all Democrats – not one free-market Republican in the lot. Curious, eh?
Similarly, a report issued on AARP, which presumably argues for older Americans, describes a parallel reality. Historically, AARP was founded to defend teachers – but when it comes to supporting pro-growth policies that raise teacher pensions, they instead favor Democrats.
Based on Federal Election Commission data, while AARP does not endorse candidates, “Democrats and liberal advocacy groups are far and away the choice of more than 330 individuals who listed ‘AARP’ in the title of their employer …” during 2016 and 2018 cycles.
Specifically, “the individuals made a total of 3,210 contributions to federal candidates, party and political action committees (PACs), and advocacy groups.” By stark contrast, only “seven of the AARP employees made 61 contributions …to Republican candidates.” Odd, no?
Here is the real irony. While poor fiscal planning and an aging population puts teacher pensions at risk, Trump’s pro-growth, free market economy – is lifting returns for pension plans. And the impact is not small. Pension experts note that “performance in the stock market has the ability to sway the overall value of a pension fund, either in a positive or negative way” – and recently it has been very positive.
How positive? While national teachers’ unions and AARP have favored pro-government Democrats at the federal level, Republicans pushing pro-growth, less-regulation, lower-tax policies have produced significant returns – including for pensions.
By way of example, “in 2011, US pensions directed an average of 44 percent of overall capital to the stock market,” according to one report – while “between 1993 and 2014, about 64 percent of pension funding came from investment earnings,” according to Census Bureau data.
And how has the market done? Last week, the NASDAQ composite hit “an all-time high.” The Dow Jones average for 2017 jumped 25.08 percent, and after a slide at end of 2018, jumped again this year by 17.24 percent!
Who benefited from that jump? Those invested in the markets, including teachers and older Americans with pensions invested in the market. Who made this happen? Free-market advocates, private and federal. Who opposed policies that made this happen? Groups who now benefit. How about that?
So, when you get right down to it – why are groups like the teachers unions and AARP not favoring policies that benefit their members? Why do they oppose conservative policies that help their members, are even favored by much of their membership? That is the question – a question that seeks an answer. Why, indeed?