Forgot Your Password?

New to The Nation? Subscribe

Print subscriber? Activate your online access

.nation-small__b{fill:#fff;}

Meet the Upstart Candidate Running in NY for What May be Among the Most Powerful Offices in the Country

Drew Warshaw recently left the affordable housing nonprofit he was leading to run for a position most have never heard of and can barely pronounce—the office of New York State comptroller.

That office, currently held by a 20-year Democratic incumbent running for a sixth term, is quietly among the most powerful in the entire country, unilaterally controlling the investments of a $298 billion public pension fund. This makes the comptroller the third-largest investor in the United States. And that figure represents the retirement security of teachers, nurses, sanitation workers, and public employees across the state of New York.

Warshaw argues that money has been mismanaged over the last two decades. The campaign estimates that just over 650 Wall Street bankers and investment managers have been paid over $11 billion in fees to manage the state’s investments, and because those investments have underperformed, taxpayers have been forced to pay an estimated $59.1 billion in higher property and income taxes to make certain the pension fund is fully funded, which it must be by state law.

In short, as Warshaw puts it: “This cycle represents the largest transfer of wealth that no one knows anything about.”

Warshaw’s solution? To fire the bankers, move pension assets out of private equity and hedge funds, and bring them into a diversified set of practically free, low-cost index funds. If that sounds like radical change, it isn’t. Most of the pension fund’s public stocks are held in index funds already, and New York wouldn’t be the first state to take this sort of simplified, passive approach.

For a while, the Nevada Public Employees’ Retirement System was run by one guy. Steve Edmundson’s strategy: invest in low-cost, low-risk funds, and then quite literally do nothing for years. This approach has matched or outperformedother........

© The Nation