February 17, 2026
Your pension vs your hospital
America's Pensions Can't Beat Vanguard but They Can Close Your Hospital
Are Pensions Funding Hospital Closures? ‘Ban PE!’ vs ‘CalPERS Gets Better Returns’
TLDR: A new critique says $6 trillion in public pensions should fund real-world projects instead of pricey Wall Street fees. Commenters split: some shout “ban private equity,” others cite CalPERS’ better returns, while many fear retirees’ money is buying housing and closing hospitals—turning retirement security into community risk.
The story: critics say America’s $6 trillion in public pension money is being siphoned into fee-heavy finance instead of real stuff like power lines, housing, and even hospitals. The comments? Absolutely on fire. One camp wants to yank the plug on Wall Street: OGEnthusiast flat-out asks why we don’t just ban private equity, calling it “zero value-add” to the real economy. Another camp claps back with pragmatism: vondur says CalPERS—the giant California pension—jumped into private equity and “now they are getting much better returns,” moral qualms be damned.
The mood swings between rage and gallows humor. wongarsu drops a dystopian zinger, calling pensions a “paperclip maximizer”—they optimize for money so hard they forget to preserve a world for retirees to live in. Meanwhile, tempest_ wonders when an “unforeseen 2008” takes down ETFs (stock baskets) and admits that not knowing how is “part of the fun.” And when someone notes these funds can “buy up housing, close hospitals, and gut local employers,” the thread turns into a small-town horror movie: your retirement vs your neighborhood. The big takeaway the crowd can agree on? If pensions can’t beat a simple index fund, maybe they should build the real economy instead of bleeding it.
Key Points
- •The article argues that about $6 trillion in U.S. public pension funds constitute patient capital suitable for long-term infrastructure, energy, and housing projects.
- •It cites Oren Cass’s NYT column and Dean Baker’s commentary to describe a finance sector that extracts value from, rather than fuels, the real economy.
- •Baker’s proposals (transaction taxes, bankruptcy reform, cultural stigma) aim to constrain finance but, per the article, do not specify where to redeploy capital.
- •The author criticizes selective skepticism in economics, referencing Larry Summers’s positions on SVB depositors and student loan relief as an example.
- •The article challenges the 'convergence' thesis, highlighting China’s state-led investments and recent growth setbacks in poorer countries such as Mozambique and Zambia.