Why government officials, especially Florida socialists, should not run investment funds...
When they lose one pile of money, they go looking for other people's dough so that they can save face and get reelected.
Seeking to stem a multibillion-dollar run on an investment pool for local governments, top Florida officials voted yesterday to suspend withdrawals from the fund, leaving some towns and school districts worrying about how they would pay their bills.
At the special meeting, the board also considered ways to shore up the investment fund and find emergency money to help cash-short local governments through the crisis. One idea under consideration was tapping into the $137 billion state pension fund for public employees in Florida, which is also controlled by the State Board of Administration.
Also, some of the fund's clients seem to be pretty unsophisticated, if not downright stupid.
Ed Fry, the clerk of the circuit court in St. Lucie County, said that he had left $140 million — about half of the county’s assets — in the state investment fund and that he did not expect big problems.
“They came through Long-Term Capital Management,” he said, referring to a hedge fund whose collapse jarred Wall Street in 1998. “They came through Enron. They’ll come through this, too.”
The source of the problem?
When she made inquiries, she said, she learned that the fund held some commercial paper backed by subprime loans.
And yes, I said that the public officials in Florida are socialists. They're a special kind of socialist -- the kind that thinks everyone should pitch in so that the rich can live in hurricane zones without having to pay to insure the property that no private company will insure...