How Corrupt Politicians Like Chris Christie Partner with Wall Street to Rip Off American Retirements

[xchrom]

http://www.alternet.org/economy/how-corrupt-politicians-chris-christie-partner-wall-street-rip-american-retirements



***SNIP


First, a little recap of how we’ve been screwed so far.

Private equity billionaire Pete Peterson is the Big Kahuna of Social Security-bashing, shoveling money toward folks like Alan Simpson and Erskine Bowles, co-chairs of Obama’s deficit commission, who have worked overtime since the financial crisis to con the American people into accepting cuts to the country’s most successful anti-poverty program under the threat that the deficit is growing —except, oops, now it’s actually shrinking!

Nonsense aside, Wall Street has gotten its way with Social Security before, such as the 1983 deal under Reagan, which, still unknown to many Americans, chopped the program and forced a higher retirement age onto young people who could not vote at the time, up two years, from 65 to 67. Ayn Rand acolyte Alan Greenspan, foe of Social Security and worshipper of Wall Street, was instrumental in getting that deal done.

Then there’s the 401(k), foisted on the American public 30 years ago as a rising tide of laissez-faire fanatics convinced policymakers to move us into do-it-yourself retirement plans. A study by the think-tank Demos revealed that the typical 401(k) steals an average of nearly $155,000 from a median-income, two-earner family over a lifetime of saving through hidden fees. The plans have also been shown to drive inequality and make ordinary people more vulnerable to economic shocks. Despite these dismal results, politicians across the country are pushing more Americans into 401(k)s. Republicans in Florida, Kansas, Illinois and elsewhere have been trying to move public workers into them, and Democrats with Wall Street ties have often joined in the effort: Former Democratic presidential candidate and U.S. senator from New Jersey Bill Bradley, who now advises an investment firm, was part of the (failed) effort to force Kansas state employees into 401(k)s, calling the effort to transfer investment risk onto workers “innovation.”

The innovative folks on Wall Street have also concluded that as long as you have pensions around, you might as well loot them. Financiers have aggressively promoted the idea of moving pensions from safe investments like treasuries into “alternative investments” on which they can charge ridiculous fees and deliver subpar results.

[malaise]

1. The reason Wall Street loves him is his willingness to let them

fugg up pensioners and their pension funds.

[xchrom]

2. +1

[yeoman6987]

6. My 401K is a yo-yo

One day up, the next down. Overall it is up since 2008. The only worry of course is when you are ready to retire and hope you don't have a big down turn in the stock market that lasts a long time. Do you think having a pension of 1500 a month is better than having a 401K that you can take out as much as you want and whatever monthly needs you have. I am split on that. The problem with the pensions are that sometimes they don't go up with COLAs. So 1500 in 2014 may be good, but 1500 in 2040 may not be. I like the idea of pensions overall of course because you can't run out of money (or supposedly) but if they do pensions, they need to do significant COLAs every year to keep up.

[malaise]

7. We lost thousand when the British company holding our

institution's pensions went bust.

[Scuba]

3. K&R

[Trust Buster]

4. Excellent OP

Wall Street successfully lobbied Congress and the States to repeal "the Prudent Man Rule" with regards to trusts and pensions. The Prudent Man Rule disallowed trust and pension administrators from using client money on speculative investments. With this new freedom in place, here's what Goldman Sachs did in 2008.

Goldman Sachs bought a huge position in "short term" oil contracts with their own house money. Then they had their analysts send out newsletters to their institutional clients predicting that the price of a barrel of oil was going to hit $200 a barrel and suggested that these trusts and pensions buy "long term" oil contracts to take advantage of the spike in oil prices. The huge flow of capital from the trusts and pensions into "long term" oil contracts made Goldman's "short term" oil contracts a self fulfilling prophecy. That's why the price of gasoline was at $4.50 a gallon in 2008 and carried the price of food up along with it. Oil supply and demand remained constant during this period.

Once Goldman cashed in on their "short term" oil contracts, they redirected client capital flows elsewhere sending the price of a barrel of oil plunging from a peak of $149 a barrel down to $40 a barrel and thereby sticking the trusts and pension funds with underperforming "long term" oil contracts. And these psychopaths pulled this stunt in 2008, at the very same time that our economy lay in ruins from their mortgage backed securities scams and we were rushing to bail them out.

[Enthusiast]

5. You have to read this.