Politics becomes amusing when liberalism becomes theatrical with high-minded gestures. Chicago’s government, which is not normally known for elevated thinking, is feeling so morally upright and financially flush that it proposes to rise above the banal business of maximizing the value of its employees’ and retirees’ pension fund assets. Although seven funds have cumulative unfunded liabilities of $25 billion, Chicago will sacrifice the growth of those assets to the striking of a political pose so pure it is untainted by practicality.
Emulating New York and California, two deep-blue states with mammoth unfunded pension liabilities, Chicago Mayor Rahm Emanuel (D) has hectored a $5?billion pension fund into divesting its holdings in companies that manufacture firearms. Now he is urging two large banks to deny financing to such companies “that profit from gun violence.” TD Bank provides a $60?million credit line to Smith & Wesson, and Bank of America provides a $25?million line to Sturm, Ruger & Co.
Chicago’s current and retired public employees might wish the city had invested more in both companies. Barack Obama, for whom Emanuel was chief of staff, has become a potent gun salesman because of suspicions that he wants to make gun ownership more difficult. Since he was inaugurated four years ago, there have been 65?million requests for background checks of gun purchasers. Four years ago, the price of Smith & Wesson stock was $2.45. Last week it was $8.76, up 258 percent. Four years ago, the price of Sturm Ruger stock was $6.46. Last week it was $51.09, up 691 percent. The Wall Street Journal reports that even before “a $1.2?billion balloon payment for pensions comes due” in 2015, “Chicago’s pension funds, which are projected to run dry by the end of the decade, are scraping the bottoms of their barrels.”