Pension investments

The original purpose of the stock market, so i have read, was for companies to go public to raise money for  the future. Say i own a car company and i want to build a second manufacturing plant. I know the plant will mean more money but i can't afford to build it. So i sell stock, raise money, build the new plant, make more money, stock prices go up, investors make money. So the original intent was to fincance industry. Today its not the case, most money in the stock market goes into speculating, like gambling, investors care little about aiding industry. They just want that quick buck.

After that set up, my thought is about pension funds. When i think of a pension, i think of industry, electrical unions, autoworkers union, teachers unions. And i am sure these pensions are invested in wall street, not in the old way, to fund industry, but in the new way, to speculate and make a quick buck. I even read a story about the mortgage crisis of a school who used its pension funds to by mortgage securities, that  turned out to be worthless.

So I'm thinking, why not use pension funds to buy local stocks. Say I am in the NYC teachers union, I would want my money invested in NY companies, companies that will invest and build in NYC, to create a future crop of new yorkers that will join my union. But i bet this is not happening.