if anyone needs further proof that the bush administration's plan for "personal accounts" in social security is a big boondoggle for the financial services industry, this should remove all doubt.
the financial services sector is now lobbying in washington for privatization. as reported in the business section of the new york times...
Wall St. Lobby Quietly Tackles Social Security
As President Bush prepares to disclose the details of his plan to funnel hundreds of billions of dollars of future Social Security funds into privately held investment accounts, Wall Street has begun a muted lobbying campaign, chastened by bolder forays that failed in years past.
continued...
...the industry is becoming a little more aggressive in pushing for private accounts, through a loose assemblage of trade associations, business coalitions and conservative research centers. These groups have lately begun trying to raise money from business interests and to marshal support on Capitol Hill, while also seeking to deflect criticism that Wall Street is behind the move simply to reap rich rewards for administering the accounts.
interestingly enough, much of the effort is in trying to convince the public that it's not a big windfall for them:
The first salvo was launched by the Securities Industry Association, which recently issued a research report arguing that the private accounts would not be a financial bonanza for Wall Street. In the paper, the association calculated that firms would collect at least $39 billion in fees, and perhaps considerably more, from managing such accounts over the next 75 years. But the group noted that the fees charged would be significantly below the fees that investment firms receive these days from low-cost mutual funds.
And even if the fees rose significantly as more people chose actively managed accounts, the association's report argued, they would still pale in comparison with the $3.3 trillion in revenues Wall Street firms are projected to earn from their core securities business over that period.
...[investment firm chairman Robert Pozen] argued, the program will not be the windfall its critics claim.
"The accounts are so small," he said, "that the vast majority of firms would not want to touch them. It's just not a bonanza for the industry."
gee, if it's not so great for them, one wonders why they're still pushing for it:
Behind the scenes, the Alliance for Worker Retirement Security, a business coalition advocating private accounts, has begun meeting with Congressional and White House staff members, pushing the idea that private accounts are not only good for the country but also good for business.
In November, Derrick A. Max, the alliance's executive director, met with Charles P. Blahous, a special assistant to the president who has been at the forefront in the White House on Social Security. They have a strong connection, because Mr. Blahous preceded Mr. Max at the alliance.
At the meeting were representatives from the Securities Industry Association, Charles Schwab & Company, and the United States Chamber of Commerce, all members of the alliance.
our old friends at the
club for growth are in on this one, plus some intellectual cover from the
cato institute, which we learn gets big funding from
amex and
AIG.
methinks the lady doth protest too much. the bottom line in this story is that many of the same guys that were pushing for privatizing social security a few years ago are back at it. they're the same ones pushing for this behind the scenes.
and it looks like they consider it payback. merrill lynch and morgan stanley were two of the biggest contributors to bush-cheney '04, and according to this the CEOs of merrill lynch, morgan stanley and goldman sachs met with the president at the white house last month, though they didn't bring this topic up, "according to a person who was briefed on the session." of course, with this administration, i doubt they had to.
one person who's calling them out is john sweeney of the AFL-CIO. good for him. if only workers and the unemployed had the kind of clout in washington to push for their benefits that fat-cat financiers do to beg for even more money in the form of wall street welfare.