Remember privatization?
It was George Bush’s number one priority for his second term—privatization of Social Security. Like the number one priority of his first term – the Iraq war – it was a disastrous idea that would have been disastrously bungled in its corruption-ridden implementation.
Wall Streeters dearly loved the whole concept—no doubt because it was theirs to begin with. And with the help of their lavish political contributions and their lobbyists, Republican congressmen and a few Democrats loved it, too.
Think of it!
Part of the individual’s Social Security account (They really wanted all of it, but this was a good first step) would go into a private investment account, with the promise of earning a higher return.
Billions, eventually trillions, would be funneled through the banks, brokerages, investment banks, mutual funds, and insurance companies – all of whom would scoop up a generous portion for themselves – and into investments that they happened to favor for reasons of their own (which might or might not have anything to do with the comfort and security of your "golden" years).
The economic principle is elementary. They were already getting most of your money. They just wanted the rest of it, that’s all, and they had found a way to cloak that objective in the irreproachable guise of "saving" Social Security and giving Americans a chance to earn more money for their retirement.
Right.
So how would we be doing?
If privatization had been enacted, billions in retirement savings would have gone into securitized subprime mortgages, thence up in smoke. Some would have been invested in giant, fortress-like stocks such as Merrill-Lynch, Citigroup, Wachovia, Fannie Mae, and Freddy Mac—all down by 70% or more—and possibly Countrywide, Bear Stearns, and Indy Mac, which have all but disappeared. Much of the rest would have gone into stocks of companies in the Dow Jones average, which has plummeted 3,000 points since October.
Meantime, much of your money and mine would have been channeled into management fees and transaction fees for the banks and brokerages, and from there into the bonuses of their top executives, who of course would be free to keep their money after you had lost yours.
Even if fired, they could retire in unimaginable luxury.
You couldn’t retire at all.
Another whore’s dream for America from the mighty minds of Wall Street wizards, kept congressmen, captive regulators, and a fun-loving, see-no-evil, see-no-bubbles, what-me-worry? Federal Reserve.