The piously politically correct blue state that bankrolls Putin
CalPERS, the $326-billion California state pension fund for some two million state cops, firefighters, and bureaucrats, has never been shy about its trumpeting its political correctness. It's positively famous for its pullouts of tobacco investments, Turkey investments, apartheid South Africa investments, and coal investments, and so famous that you probably would never have heard of the fund were it not for its pullouts. It's not that they are that awful in themselves – they often try to push back on calls to divest. But they've always been seen by leftists as a tool to oppose President Trump. So in general, name the lefty cause, and out they pull.
Well, with one little exception: Putin's Russia. On that one, they've shelled out nearly half a billion dollars to the Russian government (not companies, but the government) through its bond buys. And hey, they're one of Russia's top foreign investors, top ten among foreigners.
Seth Hettena, in an op-ed in the Los Angeles Times, writes:
Since purchases of Russian government bonds are effectively loans to Vladimir Putin's government, this means CalPERS has extended nearly half a billion dollars to a regime that sought to hack our election system in 2016 and is still attempting to undermine American democracy and the U.S.-led Western alliance.
Oh, and Hettena notes that they are expanding such investments, by 8% last year, which was right about when the Russia-Russia-Russia claims went full bore on the Democrat side of the aisle back in Washington. It's not as though they had these things and just didn't get rid of them – they went out and actually bought some.
What this shows is two things. One is that the Democrats' focus on Russia-Russia-Russia is probably something even leftists don't care a fig about, not really, because lefties would be protesting this investment to the high heavens if they did. What they really want is Getting Trump, and if Russia is a handy tool, off they go. That their pension fund is loaning Russia money is a non-issue to them, about as unimportant as the news that Hillary Clinton contracted with ultimately the Russians to create a phony dossier, or President Obama promised then-president Dmitri Medvedev that he's been more flexible after elections.
Second, Hettena notes that the bonds themselves are one of those emerging market things: high-yielding entities, which happen to be risky. They pay 7%, he notes, and for bonds, in the zero-yield environment of today, that's an awesome thing. But of course, the high yield is precisely to compensate for the fact that there is risk – a lot more risk than normal bonds have. That suggests desperation on the part of CALPers.
Not only does CalPERS need the money with its current $153-billion shortfall, which means the fund can pay only 68% of its obligations, due to the state and its cities hiring too many bureaucrats (who retire young at fat pensions) in that blue-state expansion-love California has, but the people involved also lost a lot of money on their other politically correct divestments, particularly of coal, the loss of which needs to be made up with other investments.
Enter Russia, that cause that the Democrats say they care about but really don't.
Nice deal for Putin. Nice hypocrisy for the blue-state left, which keeps its California operation going all because of him.