News Release

How Hedge Funds Are Wrecking the U.S.’s Green New Deal

LYNN PARRAMORE, lynn@lynnparramore.com@INETeconomics
Parramore is senior research analyst for the Institute for New Economic Thinking and just wrote the piece “Meet the ‘New Koch Brothers’ — the Hedge Fund Activists Wrecking America’s Green New Deal.”

The piece gives a series of case studies. Parramore summarized the problem: “Players on Wall Street have been torpedoing our chances of averting environmental catastrophe for years. A group of billionaire financiers has made sure the companies the government must partner with to fight climate change are focused on one thing only – making these men (they all seem to be men) even richer. Instead of leading the world in climate change technology, firms like Apple, GE, and Intel have been pressured to become the personal piggy banks of powerful moneymen — known as hedge fund activists — who can’t see beyond the next quarterly report.

“These guys are blocking their fellow Americans from the chance to leave their kids a safe, sustainable world. That world will never materialize unless we understand what they are doing and stop them. …

“People who did this used to be called ‘corporate raiders.’ They took over companies, fired people, played stock market games to swell the stock price, made a quick buck, and then split. …

“The playbook of today’s hedge fund” manipulators, Parramore notes, “looks like this: Buy a wad of shares of a company on the stock market. Then, line up the proxy votes of the managers of funds who let have hedgies manage pieces of their portfolio. Next, send a letter to the CEO of a target company demanding that he or she get busy pumping up the stock price. Hedge funds with deep pockets will spend millions making this happen — remember, their money comes from rich people or institutional investors like pensions and mutual funds who are seeking high yields. Occasionally hedgies will use their own money — those whose ‘war chests’ have come from previous raids.”