Orange County Moves to Ohio
If you thought the idiots who ran Orange County's finances into the ground were bad, wait until you meet these jokers:
Two months ago, reports emerged that $300,000 in rare coins was missing from a
collection in which the state Bureau of Workers' Compensation (BWC) began
investing in 1998 as a peculiar form of stock hedge. That was bad enough. But
last week, word came that between $10 million and $12 million in coins had
disappeared. That caused BWC director Jim Conrad to announce his resignation,
and launched a flurry of accusations and calls for legal action.
As if my workers comp. rates weren't already too high. There goes my idea to invest Social Security funds in beanie babies and 60's lunch boxes. Apparently most of the major lawmakers in the state got large campaign donations from several large coin dealers, and they returned the favor by investing public funds in coins through these dealers. I often make the argument not to let the government have control of large equity investment funds -- I did not even occur to me to include coins. One of the things about coins - you have to hold them for a long, long time to make money, in part because commissions markups are so high vis a vis other investments (which explains why coin dealers so readily donated large sums of money for government business).
Reason has a good roundup. Unfortunately, I am sure this will all lead to more restrictions on spending and speech in campaigns, though it appears the system is working fine - full disclosure of funding sources certainly has everyone running for their lives.
The real solution is to make elected officials take a real fiduciary interest in the state's investment funds (pensions probably being the largest). What they would prefer to do is to legislate a set of rules and then leave managers to follow these rules, giving them plausible deniability. What they should do is sit down once a quarter and review portfolio investment performance and asset allocations.
