Treasurer stresses local investments

By Scott B. Wong
Daily Bruin Contributor

California State Treasurer Philip Angelides spoke at the UCLA
Law School Monday to 40 faculty members and students about how to
promote growth in communities left behind in the state’s
booming economy.

Angelides named former Laker superstar Earvin
“Magic” Johnson, who founded a company aimed at
inner-city retail, as an example of successful private-sector
investing and said more investing was in order.

Angelides has been travelling statewide, promoting his
initiative ““ “The Double Bottom Line: Investing in
California’s Emerging Markets” ““ which emphasizes
moving $8 billion of overseas state and private investments to
low-income local markets.

“These are the best of times,” he said, referencing
a familiar Dickens quote. “We live in the richest state and
wealthiest nation on Earth.”

But despite the recent high-tech boom, there is a widening
disparity between the rich and poor, which Angelides called:
“The Tale of Two Californias.”

The solution lies in ethnic neighborhoods that have been
neglected though having great economic potential and are growing
exponentially, Angelides said.

“Four Korean American community banks are lending more
than Wells and Bank of America,” Angelides said. “We
now have a $20 million deposit with Korean American banks in Los
Angeles.”

Private investors can also receive aid from the state’s
pension, though this is rare.

“Magic Johnson came to the pension fund and was given $50
million to invest in inner-city communities,” Angelides
said.

He added, however, that had it not been for Johnson’s
celebrity status, the aid wouldn’t have been granted.

The lack of investments in these communities can be attributed
to a lack of information, Angelides said because foreign investment
opportunities are overshadowing opportunities locally.

“I am struck by the dichotomy that millions have been
invested in overseas emerging markets, and that our own emerging
markets have been overlooked,” he said.

The state treasurer said he wants to see California’s two
largest pension funds ““ the California Public
Employees’ Retirement System and California State
Teacher’s Retirement System ““ to remain local, rather
than to be invested in overseas. He proposed $5 billion of these
funds to be directed to California’s struggling
communities.

Professor Kenneth N. Klee of the school of law, who attended the
faculty colloquium, said the design of the pension plan was a great
idea and called it a “win-win program.”

“It is an enlightened view,” said Klee, adding the
pension plan serves a greater social purpose.

Angelides was invited to speak at UCLA by friend and law school
professor Ann Carlson. It was his second visit to the campus,
having previously spoken last year at a public policy course taught
by another long-time friend and former presidential candidate
Michael Dukakis.