The Potential Benefits of a Public Asset Manager
August 10, 2021
By Lenore Palladino, Chirag Lala
Private asset managers—financial institutions like BlackRock, State Street, and Vanguard—manage trillions of dollars for US households and workers. But these asset managers do not prioritize the true interests of those whose financial savings they manage—such as interests in a healthy environment and sustainable economy. Instead, they focus on their own profits and on increasing the financial value of the assets under their management.
In “The Potential Benefits of a Public Asset Manager,” Lenore Palladino and Chirag Lala explore the evolution of the asset management industry and explain how establishing a public asset manager could shift the financial system toward serving the actual interests of the people and social systems on which it depends. Palladino and Lala examine the current framework that guides how household financial assets are invested, and why today’s financial system is built in a way that fails US households. Finally, they illustrate the two primary benefits that establishing a public asset manager would provide to households across the country:
- A public asset manager could redirect household investments toward the collective economic interest of a healthy planet and equitable economy; and
- A public option for asset management could change the incentives for private asset managers and reduce their ability to extract household wealth for themselves.