This election season, The 9th Street Journal is sitting down with candidates to chat about their priorities — over frozen pops.
Our reporter Katelyn Cai spoke recently with Wesley Harris, a Democrat who is running for state treasurer. The interview has been lightly edited for length and clarity.
Katelyn Cai, The 9th Street Journal: Why do you think the race for state treasurer is important?
Wesley Harris: It’s one of the more powerful positions on the Council of State. It’s pretty much the chief financial officer of the state, and he controls the pension plan for all the state employees, controls the state health plan for the state employees and chairs the local government commission.
State agencies are the number one employer in 61 of our counties. Making sure that they have the benefits they need so we can recruit the best and the brightest is one of the important jobs in state government. It’s critical to making sure our state actually functions.
9th Street: You’ve mentioned your previous experience as a public economist, and you have served in the state House for three terms now. Why run for state treasurer?
Wesley Harris: A lot of it goes back to my background. Since my time in the legislature, I’ve seen us make some really short-sighted financial choices that not only have prevented us from growing as a state. We have everything going for us right now, except for a government that’s actually investing in our people.
I grew up in rural North Carolina, in a little county called Alexander County, and I am what I am today [because this] state invested in me. And I’ve seen so many of those opportunities start to disappear.
And so with my background as an economist and the stakes of this election, I feel like this was the right time to go. We don’t have that many years left to fix the shortcomings we’ve had over the last couple of years.
I live in Charlotte now, but I grew up in rural North Carolina. I think we’re one of the unique states with our urban-rural divide. Being able to bridge that in North Carolina is a template for how we actually solve politics around the country going forward.
9th Street: As state treasurer, you’d be managing pension funds over $100 billion dollars. What about your previous experience makes you especially equipped for the job?
Wesley Harris: My Ph.D. was in public finance, and before I got involved in politics, I was an international tax consultant. We valued complex assets all the time, making sure we understood what their portfolios were, valuing their assets for tax purposes.
So I have a lot of experience valuing complex assets, which is what the pension plan is. It’s making sure you’re valuing what the assets are and buying ones that have good value. And again, having a mom that was a lifelong public school teacher, and my dad was a local banker— put a banker and a state employee together, and that is the state treasurer’s job in a nutshell.
We have one of the best-funded pensions in the country, but it’s one of the worst-performing, and it’s because we’re holding a lot of cash. It’s not super-complicated. That’s the biggest trick finance people have, is try to make things seem so much more complicated than they are, so they can make a whole lot of money.
But it’s pretty simple, at the end of the day. Have a diverse set of portfolios, have a diverse set of assets between bonds and stocks, and get the rate of return our retirees need, have a cost of living adjustment and make sure they have a quality retirement.
9th Street: In the simplest possible terms, how are you going to change the way our pension fund is managed?
Wesley Harris: Invest the cash. We have a higher cash balance in our pension fund than any other pension fund in the entire country, around 14% — the average one has around 2% — and it’s just sitting there losing value.
Last year, the S&P 500 had a 24% rate of return. Our pension had an 8% rate of return. You have to take advantage of those good times so you can make it through the bad times. Just invest that cash into index funds.
The investments we have haven’t performed poorly. We just weren’t investing enough. It’s that simple.
9th Street: North Carolina is just one of three states that has this single person, the state treasurer, who manages all of these funds. You support the sole fiduciary model. Why keep it instead of moving to what the majority of states do?
Wesley Harris: This is really one of the big differences between me and my opponent. It’s about accountability and what the alternative is. In North Carolina, if you shift this to a committee, you’re giving it to the legislature. And the last thing our legislature needs is more power.
Right now we have a state treasurer that is accountable to the people, elected by the people. If the people do not like how they invest the money, they can choose somebody else. You give it to the legislature, it becomes a political appointment. People lose accountability in terms of choosing how our pension plan is invested, and it gets super-politicized.
Look at what’s happened to our UNC system and their board of trustees since they’ve been filled with political hacks. That’s what would happen to our pension plan — it would be filled with political hacks who are not accountable to the people. They’re accountable to the legislative leadership, which has already insulated themselves through extreme gerrymandering around the state.
9th Street: You mentioned your opponent; what do you most respect about him? What sets you apart from him?
Wesley Harris: He’s a smart guy, he’s a nice guy. We’re both Tar Heels, so that’s always fun. I look forward to, after this election, hearing him talking about R.J. Davis and what he’s going to do this year. He’s a nice guy, and he’s had a great career, but it’s a different level of experience..
The state treasurer is more than the pension fund. And most people in North Carolina don’t want Wall Street managing a pension plan, and they don’t want Wall Street managing our health plan. They want someone who understands North Carolina.
As the son of a state employee, I’m on the state health plan currently. We need a state treasurer that not only invests in our people, but also stands up to this legislature.
We actually had our debate last night, and it was very clear between us. His [view] was, the pension plan was all that matters, everything else is out of the purview of the office. It seemed like he was just going to lock himself in his office, let the legislature do whatever they were going to do and just focus on the pension plan, which is wild, because his main policy is to give away that power to the legislature.
We need a state treasurer who wants to invest in our people, who has a vision for what our finances should be, and can go around the state and show people what’s happening with their tax dollars. Because what’s happened to state government finance-wise, we’ve made such short-sighted decisions.
9th Street: What’s a recent book that really stood out to you?
Wesley Harris: I read a lot of audiobooks as I’m crisscrossing the state, and I’ve started looking a lot into globalization and the decline of globalization. The last book I read was called “The End of the World is Just the Beginning,” about what the implications are for the world order collapsing that we were under during the last 50 years, and what that means as the U.S. is becoming much more populist and isolationist.
We’re in a turbulent time. We need good leaders in government who understand what’s going on and have a vision of making sure that people buy into the system so we don’t go into the chaos that we saw at the early part of the 20th century or in the mid-part of the 18th century,or at the tail end of the ‘70s.
These things happen in cycles, and we’re at the tail end of one of those cycles right now. So we’ve got to prepare for that, and we need leaders who understand what’s coming well.
Above: Wesley Harris, candidate for state treasurer, chat with 9th Street Journal reporter Katelyn Cai at Pincho Loco. Photos by Kulsoom Rizavi — The 9th Street Journal
