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infrastructure and public works projects as well as invest-

ment in in-state businesses and local real estate develop-

ment.19  In addition, 23 percent of the pension systems have

prohibitions against investment in specific types of compa-

nies, including restrictions on investment in companies that

fail to meet the "MacBride Principles" for doing business in

Northern Ireland, companies doing business in Libya and

other Arab countries; companies that are accused of pollu-

tion, unfair labor practices, or failing to meet equal

opportunity guidelines; the alcohol, tobacco, and defense

industries; and even companies that market infant formula to

Third World countries.20

A nearly infinite list of current political controver-

sies would be ripe for such restrictions if the federal

government began investing Social Security funds.  Both

liberals and conservatives would have their own investment

agendas.  Should Social Security invest in nonunion compa-

nies?  Companies that make nuclear weapons?  Companies that

pay high corporate salaries or do not offer health benefits?

Companies that do business in Burma or Cuba?  Companies

that extend benefits to the partners of gay employees?

Companies that pollute?  Companies that donate to Planned

Parenthood? Investment in companies ranging from Microsoft

to Nike, from Texaco to Walt Disney, would be sure to

engender controversy.

Supporters of government investment suggest two ways to

avoid the problem of social investing.  First, they propose

the creation of an independent board to manage the system's

investment, a board that would operate free of any political

interference.  However, Alan Greenspan, who should be in a

position to know about board independence, has said that he

believes it would be impossible to insulate such a board

from politics.  Testifying before Congress on proposals for

government investment, Greenspan warned:

I don't know of any way that you can essentially

insulate government decisionmakers from having

access to what will amount to very large invest-

ments in American private industry. . . . I know

there are those who believe it can be insulated

from the political process, they go a long way to

try to do that.  I have been around long enough to

realize that that is just not credible and not

possible.  Somewhere along the line, that breach

will be broken.21

Indeed, the difficulty of shielding investment deci-

sions from political considerations was illustrated, unin-