![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
acroyear(pun intentional)
This column @ the Post highlights some of my concerns with the new Privatization scheme (screw Bush's weasel words, I'm calling it for what it is).
In particular, the issues this raised for me involved concern the actual money itself. Not the "costs of implementation" (a figure nobody can agree on but all agree its HUGE) but more importantly, who's getting that money? Somebody is going to be paid that money to actually do the implementation, and THAT somebody is the name I want to know. Its the real "big secret", which I think is the reason why Bush's plan isn't actually on the table yet: it may reveal exactly who the political backers of this scheme really are.
I would note that its this way because its a social program that is utterly mandatory. You can't "opt out" of paying this tax the way you can your 401K or Health Insurance premium.
In effect, it will put tremendous lobby pressure on the Government to actually control the indexes instead of the Free Market since so much is at stake in their performance. Even if Bush's administration won't allow it, subsequent administrations WILL. There's no might about it. If it can happen, it will. There's too much at stake for it to just sit there, especially in this climate where moderation no longer has any meaning or influence and centrism is a dispised insult rather than the compliment it should be.
The great irony is this final nail in the coffin of any Republican ideal of "getting the government off our backs" (the mantra of Reagan's deregulation policies re-imlpemented by Bush Jr.). They eliminate regulation on the companies themselves, and then regulate the stock market itself that empowers those companies. CEOs of companies will flood money into the lobby industry to keep their corporation listed in order to keep getting a cut of that index investment, and CEOs of non-listed companies will lobby even more to get listed. They now have two ways to get in -- the old way, and through the legalized bribery we call the Lobby.
But this whole time, there's another lobby or two involved. Trading off the indexes means still trading stocks, and with that comes commissions (who's collecting that? another lobby will be sure to have a say) and money transfers. which bank gets to hold onto it? a major question now in that if the largest bank gets the lion's share of the interest in all of that, it may be the final nail in place to create One Bank to Rule Them All -- certainly every banking corporation is going to lobby for THAT job, too. Right now, my money sits on loan to the Federal Treasury, which has loaned it out in the form of Bonds to the rest of the world. But suppose instead my money sits as a cash cow pumping up the stock value of a bank allowing it to merge and destroy *my* bank that I've come to depend on? Should I have the right to say that's not how I want *my* money invested?
In this entire scheme there are boatloads of free money, MY money, to be made regardless of the performance of the market itself. Certain private elements of Wall Street are guarenteed to get rich even if the whole damn thing falls apart, and it wouldn't matter to them since they aren't depending on that social security money to live on when they're 84 on lifesupport. But many in this country are.
So who's really playing who here? Is Government setting themselves up to play Wall Street, or is Wall Street trying to set itselves up to play Government?
In either instance, they're playing with *my* money, and I don't think that's right.
This column @ the Post highlights some of my concerns with the new Privatization scheme (screw Bush's weasel words, I'm calling it for what it is).
In particular, the issues this raised for me involved concern the actual money itself. Not the "costs of implementation" (a figure nobody can agree on but all agree its HUGE) but more importantly, who's getting that money? Somebody is going to be paid that money to actually do the implementation, and THAT somebody is the name I want to know. Its the real "big secret", which I think is the reason why Bush's plan isn't actually on the table yet: it may reveal exactly who the political backers of this scheme really are.
The danger is that investment decisions would become unduly politicized and that the economy would consequently suffer. The rules governing which stocks could or couldn't be purchased for personal accounts might become irrational or counterproductive.
The role of Wall Street is to move investment funds to their most productive uses. If the process works well, the economy expands, living standards rise and the stock market advances. But inevitably there are losers, because Wall Street is an exercise in collective risk-taking. A free market means continuous trial and error.
By contrast, the welfare state is an exercise in collective risk reduction. It strives to provide some security -- aka the "safety net" -- against life's misfortunes and the economy's upsets. It aims to protect society's poorest and weakest members. We have many welfare programs. Social Security is the largest and most popular.
I would note that its this way because its a social program that is utterly mandatory. You can't "opt out" of paying this tax the way you can your 401K or Health Insurance premium.
The administration counters that it would allow accounts to be invested only in "index funds" -- for example, funds representing the Standard & Poor's 500 stocks. The idea is to minimize the risk of big losses on individual or speculative stocks. Sounds sensible. But it would bias the market in favor of existing companies, industries and technologies. It would discriminate against the new, exciting and different.This is a key observation. Stocks change, indexes change to match them, but now the interest in the indexes is no longer solely the concern of Wall Street. Its the concern of the whole country.
In effect, it will put tremendous lobby pressure on the Government to actually control the indexes instead of the Free Market since so much is at stake in their performance. Even if Bush's administration won't allow it, subsequent administrations WILL. There's no might about it. If it can happen, it will. There's too much at stake for it to just sit there, especially in this climate where moderation no longer has any meaning or influence and centrism is a dispised insult rather than the compliment it should be.
The great irony is this final nail in the coffin of any Republican ideal of "getting the government off our backs" (the mantra of Reagan's deregulation policies re-imlpemented by Bush Jr.). They eliminate regulation on the companies themselves, and then regulate the stock market itself that empowers those companies. CEOs of companies will flood money into the lobby industry to keep their corporation listed in order to keep getting a cut of that index investment, and CEOs of non-listed companies will lobby even more to get listed. They now have two ways to get in -- the old way, and through the legalized bribery we call the Lobby.
But this whole time, there's another lobby or two involved. Trading off the indexes means still trading stocks, and with that comes commissions (who's collecting that? another lobby will be sure to have a say) and money transfers. which bank gets to hold onto it? a major question now in that if the largest bank gets the lion's share of the interest in all of that, it may be the final nail in place to create One Bank to Rule Them All -- certainly every banking corporation is going to lobby for THAT job, too. Right now, my money sits on loan to the Federal Treasury, which has loaned it out in the form of Bonds to the rest of the world. But suppose instead my money sits as a cash cow pumping up the stock value of a bank allowing it to merge and destroy *my* bank that I've come to depend on? Should I have the right to say that's not how I want *my* money invested?
In this entire scheme there are boatloads of free money, MY money, to be made regardless of the performance of the market itself. Certain private elements of Wall Street are guarenteed to get rich even if the whole damn thing falls apart, and it wouldn't matter to them since they aren't depending on that social security money to live on when they're 84 on lifesupport. But many in this country are.
So who's really playing who here? Is Government setting themselves up to play Wall Street, or is Wall Street trying to set itselves up to play Government?
In either instance, they're playing with *my* money, and I don't think that's right.
![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
no subject
Date: 2005-03-12 04:52 am (UTC)