Wall Street Journal Editorial: Students and Teachers Suffer Due to Politics
Recently, the Rhode Island State Investment divested pension funds from Third Point LLC, a hedge fund owned by StudentsFirstNY board member Daniel Loeb. The decision is believed to be influenced by the American Federations of Teachers (AFT), a teachers union that has previously clashed with Loeb.
According to a Wall Street Journal editorial, this is a political move by the union based on opposition to teacher accountability:
But the AFT put Mr. Loeb high atop the union's hedge-fund black list last year because he also sits on the board of the New York chapter of StudentsFirst, Michelle Rhee's education reform outfit that advocates teacher accountability in part based on student achievement.
The editorial goes on to discuss how the decision will affect teachers and students:
The larger and sadder irony is that Rhode Island's investment is chump change in Third Point's $14 billion portfolio. Mr. Loeb doesn't need Rhode Island's money, but poor students in New York and teachers in Rhode Island need his. The teachers and public employees will now lose the benefit of the higher returns that Third Point provides for their retirement. And the poor kids will lose if other private-equity or hedge-fund owners lack Mr. Loeb's fortitude and decide to stop contributing to charter schools or reform outfits like Ms. Rhee's.