Wall Street is awash in speculative capital but Main Street America has increasing trouble borrowing long-term to buy the equipment to stay competitive in the global economy. Ironically, much of that speculation is fueled by the pension fund dollars that belong to the guys and gals working on Main Street.

"Our Money, Our Jobs: Worker Saving Funds and Long-Term Investing in Manufacturing" was the subject of a path-breaking conference in Pittsburgh on June 14-15. Sponsored by the Steel Valley Authority, the Steelworkers, and the AFL-CIO's Industrial Union and Public Employee departments, the conference presenters provided a well documented case that managing our pension money is too important to leave to Wall Street.

Today American employee pension funds are worth about $5 trillion. They are the primary vehicle for family savings and are also the major source of new capital in the country. How pension funds are invested not only makes a difference for our well being when we retire, it also makes a difference for our well being today.

Unfortunately, the rapid growth in pension funds and the increasing short-term perspective in their investments have fueled the speculation in the financial market and not job-creating long-term investment in our industrial base. "Market participants trade more than $100 of stocks and bonds for every dollar invested in new plant and equipment," economist Regina Markey of the AFL-CIO Pension Department told the conference.

This has some shocking consequences:

• Pension money is fueling a huge increase in merger and acquisition activity which hit $378 billion in the first 10 months of 1995, exceeding the peak of merger activities in the mid 1980s. This merger and acquisition activity liquidates jobs and undercuts living standards for ordinary Americans -- whose pension fund money fuels the boom.

• Pension fund managers are increasingly shifting resources off shore in pursuit of higher rates of return in foreign markets. Our own pension money helps ship our jobs abroad!

• This rising speculation leads to an increasingly rapid turnover of stock in pension fund portfolios. The turnover for all private pension funds in 1993 was 40%, more than three times the 12% in the market in 1960. The bigger the fund, the higher the turnover; there was a 75% turnover rate for institutional investors with portfolios over $30 billion.

"I don't think that the average citizen knows that the money we own is being used to destroy our hopes, our aspirations, our lives," commented Leo Gerard of the Steelworkers.

At the same time, the banking sector has declined as a source of funding for corporate investment in plant, property and equipment in this country. Banks frequently turn to more speculative activities themselves, and they have ratcheted down the length of the industrial loans that they make.

This combination has created a major shortfall of investment funds for what the Steel Valley Authority's Joe Bute calls "the critical middle": closely held manufacturing companies doing $5 - $100 million in sales. These companies find their traditional sources of lending drying up or becoming far more expensive at the very time they need to invest more to stay competitive.

We need a serious public discussion of how our pension funds ought to be invested to provide not only a secure retirement tomorrow but also to provide secure jobs today. We need to target pension fund investment to:

• renew our industrial base and our infrastructure;

• to fill the investment gap for the "critical middle" -- those small and mid-sized closely held companies that provide the backbone of our communities' economic structure but which can't tap the financial markets;

• help average American employees buy their own businesses; and

• reinvest in the same communities where we live and work.

In short, we need to invest our pension assets in ourselves. It's our money.

George Becker, president of the Steelworkers, reminded the audience of the power of employee savings just north of our border. The Quebec Solidarity fund, Becker pointed out, "became the largest single source of investment capital in Quebec in only three years after it was created. Why can't we do that in the US? Think of all the potential this has. Think of all the plants and jobs we could have saved."