Heads or Tails, Wall Street Wins: Saving Our Pensions From The Casino

“Most billionaires don’t park their money in making more businesses. They park their money in the stock market. That is not meaningfully investing in opportunity, it’s just investing in other billionaires.” So said Abdul El-Sayed, U.S. Senator-elect from Michigan. He said that he would rather “have an economy that makes a thousand millionaires than one billionaire,” and that money that would otherwise go into the S&P 500 should go instead to “good schools, good infrastructure, health care, child care.”

It’s a laudable sentiment, but those thousand millionaires would probably still be parking their money in investments designed to make more money without producing anything. When an investor buys Nvidia shares on the stock market, the money goes to whoever sold the shares, not to Nvidia. A company gets new capital only when it issues new stock. The profits from stock market trades go either to the buyer or the seller, depending on which way the penny falls. And it’s not just the billionaires and millionaires playing those financial markets. Our household savings, corporate funds and pension funds are gambling there as well.

State and local pension funds hold $6.2 trillion, more than a fifth of the GDP of the U.S. economy. That massive pool of money is not building housing, infrastructure or local businesses. It is parked in Wall Street’s casino, bidding up the price of existing assets, while asset managers collect their fees whether the pension funds win or lose. And many pundits are predicting an imminent market crash, in which the funds will lose big.

Worse, the returns to the pension funds are no better than they could get from a simple index fund without incurring outside management fees, and sometimes they are worse. Meanwhile, the nation’s only state-owned bank, the Bank of North Dakota, earned a 17.2% return on its capital in 2025 while lending into its state’s own economy, and paid $258 million of its profits back to the state. North Dakota’s money is safe, earning, and invested in local productivity.

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