More 'Chicago Way' Politics from Obama

By Ed Lasky

ABC News, the only news outlet among the Big 3 of the old network news shows doing commendable work covering Barack Obama, has a report that Barack Obama boasted about steering large amounts of state money to African-American owned investment firms in Chicago.

He neglected to mention that the head of one of these firms has been a key fundraiser for him over the years, that the firm's employees have given quite generously to his campaigns, and has allowed him to use company-owned jets (hasn't the New York Times attacked John McCain for using his wife's company's private jet?).

Obama claimed that the investment firms had excellent investment performances that justified the steering of funds to them. Well, time for a fact-check (Washington Post-time to step up to the plate). In fact, the major beneficiary of Barack Obama's efforts has been the Ariel Fund headed by John Rogers, whose mother is a power broker in Chicago and Illinois politics. The fund's investment performance among its various offerings have been sorrowful for years. The flagship fund-the Ariel Fund (ARGFX)-has a record of underperforming its peers and the market for years.

Morningstar, the premier mutual fund advisory firm, rates its return as being "Below Average". That is an understatement. Yet John Rogers and the firms employees have done quite well over the years regardless of how their investors have fared. He seems to have inherited his mother's power broker status, with a close friend headed towards the Democratic Presidential nomination. Family dynasties are a tradition in Chicago.

The company relies on investments from city and state government and union pension funds who are under a mandate (whether official or not) to boost investments and deals with minority-owned firms. Who suffers? Pensioners, government employees and urban residents. Ironically, a large number of them are African-Americans. To enrich a few lucky and well-connected African-Americans, many others suffer subpar (to say the least) returns on their retirement savings.

As our population ages, the future viability of Social Security and Medicare has come into question. Remedies have been proposed and suffered from endless rounds of political flak. How will Barack Obama fare when he is in the Oval Office, backed by a Congress that will likely be more solidly Democratic and more likely to support his policies. What will those policies be? Will any privatization proposals introduced by him fare better than those of George Bush? Who will be the beneficiaries?