Scapegoating The Stock Market And Insulting The Intelligence Of The Electorate
By Pejman Yousefzadeh Posted in Barack Obama | Economic Ignorance | Economy | John McCain | Social Security — Comments (18) / Email this page » / Leave a comment »
It happens all the time; a Republican makes the suggestion that perhaps some Americans would like to be able to take some of their Social Security money and invest it in the stock market and their Democratic opponent(s) come(s) out and beats up on the stock market itself as a way of pouring cold water on the plan. It happened again in the Presidential race, as this story points out:
Obama also criticized McCain for being open to letting taxpayers invest part of their Social Security payments in private investment accounts.
"Imagine if your security now was tied up with the Dow Jones," he said, alluding to the recent slide in stock prices. "You wouldn't feel very confident about the security of your nest egg."
McCain, campaigning Friday in New Jersey, said Obama was misrepresenting his position.
"I will not privatize Social Security," he said. "But I would like for younger workers, younger workers only, to have an opportunity to take a few of their tax dollars, a few of theirs, and maybe put it into an account with their name on it. That's their money."
Indeed it is. What's more: The stock market never fails to bring in big returns over a long term period. And that is precisely what a stock market investment is supposed to be; a long term investment. As such, it is more than a little ridiculous to pick out a discrete period when the stock market may not be doing well and then proclaim that that period serves as a sufficient case study for how Social Security investments in the stock market would do in the long term.
What we are increasingly seeing during the course of this election cycle is that McCain would offer you the freedom to do what you want with what is rightfully yours--in this case, your money. The Obama campaign is implicitly telling you that you need to be protected by government from the stock market and from the ability to make your own investments. For your own good and because government is ever so much smarter than you according to the Obama campaign.
If that doesn't outrage or offend you, what will?
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Scapegoating The Stock Market And Insulting The Intelligence Of The Electorate 18 Comments (0 topical, 18 editorial, 0 hidden) Post a comment »
Everyone wants to make a quick buck. When the stock market is down, it becomes this evil-capitalist machine. When the stock market is up, everybody feels like the Obama-poster with the unicorn.
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They think we’re too stupid to understand that the markets have ups and downs and that, for the savvy, long-term investor, the corrections and bear markets are buying opportunities. Good stocks are on sale.
We’re too stupid to understand that a windfall profit tax on the oil companies will wind its way right back to us by way of the price at the pump.
We’re too stupid to realize that raising the corporate income tax (which is already the second highest in the developed world) will end up as a tax on us through higher prices for goods and services.
We’re too stupid to see through the smoke screen of “raising taxes only on the wealthiest Americans.” We don’t know that most small business owners (which account for 70% or so of the jobs in this country) file as individuals, and would fall into the top 1 or 2 percent. We’re too stupid to see how raising taxes on small business is going to cost jobs AND raise prices.
We’re too stupid to be aware that doubling the capital gains tax will kill us when we sell a home, a classic car, stock, or anything else that increases in value. We’re too dumb to know that it would affect our retirement accounts.
We’re just too stupid.
"The elites think we're too stupid.
They think we’re too stupid to understand that the markets have ups and downs and that, for the savvy, long-term investor, the corrections and bear markets are buying opportunities. Good stocks are on sale."
The elites may or may not think that the vast majority of people don't understnad this - but their actions scream that they don't. Retail investors have horrible records of short term trading (even in the mutual fund industry that is tailore made for buy and hold investing) that inevtiably underperforms the markets. A great way to look at it is compare investor returns and fund returns on morningstar - investor routinely trade in a way that they actually underperform the fund they are trading in.
Setting up Social Secuirty like a long term endownment which invests in a diversified protfolio is smart (I'm sure David Swensen would manage it if we asked); entrusting individuals to make smart investing decisions and not requrie us to bail them out down the line with additional social security funds not so smart.
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So far on most issues, as in SS, Oil, Terror, McCain gives his way of trying to fix things for the betterment of all of us. Obama response is almost to the point of him going "No thats a dumb idea" Yet he gives no reasons of his own.
Private companies seem to be doing a hell of alot better then our Government, so which is the good route and which the bad?
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If a young tax payer doesn't want to invest in the stock market for whatever reason, can they get those tax dollars back? Is it really Their money?
As a matter of ownership "and maybe put it into an account with their name on it. That's their money." President Bush lost this argument because he allowed the market to be demonized and the word "privatization" attached. Couching this with young voters as a property issue is the way to win the day.
"It's your property and we won't lose sight of that. Do you want to keep the money in your account with your name on it and an ROI attached or do you want to give it to Obama and his friends today with the promise they'll spot you that and then some, amount to be determined later, a half century down the road?" Youger generations love choices and the known. They'll go with ownership.
"Honor is self-esteem made visible in action." - Ayn Rand, West Point, 1974
Leave it to the mainstream media to leave out some of Obama's best quotes:
"You wouldn't feel very confident about the security of your nest egg. Instead, you should feel much better handing it all over to us Senators and Representatives, so we can take your money out and leave an IOU in the 'lock box' with your name on it for repayment. Better yet, leave it with the same people that will take more of your paycheck in taxes, spend it on special perks for our friends as they give us low interest mortgages and millions in campaign donations, and we'll toss in a few trillion in loans we'll take out with the Chinese and also put your name on the IOU."
That said, I'm increasingly amazed how stupid one must have to be to be enthralled with Obama. I've pointed out before how he wouldn't make the director-level cut at most Fortune 500 firms given his inexperience, but increasingly I'm noticing he doesn't really seem to have the intelligence either. His odd comments, especially when he's off the script given to him by his handlers, and very poor decision making, really suggest poor Barack is just plain dumb.
"Imagine if your security now was tied up with the Dow Jones."
One has to wonder where Obama keeps his retirement money. Real estate?
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NObama...no way!.....McCain '08 !
Senator McCain received on of the biggest round of applause of the meeting when he suggested that the "young" be allowed to put their own money into an account with their name on it. I was one of them enthusiastically clapping as im 26 years old.
He also once again "hoped" that Obama would accept the town hall debates. Although its unllikely, there was also an elder lady with a Hillary sign in the middle of the vets behind McCain with McCain stickers all over it.
Im not sure if all of his meetings are similar but Senator Lieberman opened up for McCain. Linsay Grahm was also there.
I was also please to see that the "protesters" waited until the town hall meeting was over before acting up.
1. About 3 17 year old girls held up a 20 foot sheet "We stand against imperialism" At the same time an Legal immigrant next to me, from Cuba said they would be thrown in jail for doing that in his former country.
2. The second antagonist painted his hands red and had a sign with something along the lines of Bush is a dictator, war mongeror, blah blah. A few Vets proceeded to walk over and rip it out of his hand and crumble it up.
All in all, the town hall was decent. I think it could have been longer. I also spoke to a friend of mine who works at a "Braddocks Tavern" where he said McCain held a luncheon after the town hall meeting. 10,000 a plate, there were about 20 people attending. Crab cakes with asparagus, Terra massue, and something else that I cant recall.
Moderation in temper is always a virtue; but moderation in principle is always a vice. ~Thomas Paine
or an investment club, it is an insurance program. US society collectively, through our government, seeks to insure those unable to save for retirement so they don't starve. It is about spreading risk across a population, like any other insurance program, not about individuals. Allowing private accounts decreases the amount of risk spread and undercuts the goals of the program. It would be like an insurance company offering to take your money and let you decide where to invest it. If you suffer a loss you are welcome to whatever money you've earned plus some nominal amount from a general pool. I know of no insurance companies that use this model. If it was such a great idea don't you think they would?
Perhaps it was designed as an insurance program but it has morphed for all practical purposes into a retirement or annuity program.
Were it really an insurance program, folks would have to continue to work and pay into it until something happened that physically prevented them from working (car crash, alzheimers, etc) and then it would pay out like a disability insurance program, but only as long as they continued to be disabled.
There would be no set age for withdrawal of benefits and you would have a whole industry spring up to verify recipients' continued disability.
Were it really an insurance program, the risk administrator would be raising the rates on the older participants relative to the younger participants to compensate for the increased risk/likelihood of them accepting benefits.
Were it really an insurance program, folks could opt out.
Its not run like an insurance program, regardless of the name, but like a mandatory pension program and it is viewed as such by 99% of the population.
Ergo: its a retirement plan
The greatest single cause of Atheism today is Christians who profess Jesus with their lips & then go and deny him by their lifestyle. That's what an unbelieving world simply finds..unbelievable -Brennan Manning
>>Were it really an insurance program, folks would have to continue to work and pay into it until something happened that physically prevented them from working (car crash, alzheimers, etc) and then it would pay out like a disability insurance program, but only as long as they continued to be disabled.
but it does
>>There would be no set age for withdrawal of benefits and you would have a whole industry spring up to verify recipients' continued disability.
ibid
>>Were it really an insurance program, the risk administrator would be raising the rates on the older participants relative to the younger participants to compensate for the increased risk/likelihood of them accepting benefits.
Only if the goal was to make money for the system, which it isn't. In some ways SS is more like Whole Life insurance (without the loan option, obviously) Everyone dies and beneficiaries collect on a whole life policy, but typically these policies have a flat premium structure, and then no premiums once the value of the policy has been paid in even though the policy holder is more likely to die the longer the policy is held. For SS not everyone lives to collect all the benefits, but if you are vested in the system the beneficiaries always get something and you stop paying when you stop working, but your return is relative to what you paid in.
>>Were it really an insurance program, folks could opt out.
I don't see how this logically follows. Just because other common forms of insurance are voluntary does not mean that all forms of insurance must be voluntary. This is akin to saying "were it really a swan it would be white" when faced with a black swan.
>>Its not run like an insurance program, regardless of the name, but like a mandatory pension program and it is viewed as such by 99% of the population.
I'd ask you for a source on the 99% statement, but it really doesn't matter since reality is not up for a vote. In light of this, please provide evidence regarding how SS is more like a pension program than an insurance program or retract the statement.
The point is that SS without private accts is pooled risk, with private accts it is individual risk (or at least more so). The goal of SS is for all members of the population eligible for SS to have a basic subsistence and pooled risk will do that more consistently than individual risk. It's the same logic behind mutual funds vs individual investments.
99% is a made up number - a WAG with some room to compensate for folks who look at technicalities (trees) while ignoring the big picture (forest).
When I go to a financial planner, they don't say "Let's look at your SS insurance benefits in the event you lose your ability to work". They say "Let's look at the SS retirement benefits you'll receive when you retire at 62 vs. 67."
If you asked 1000 people at random whether SS is an insurance program or a retirement program almost everyone, say 99%,(another WAG) would say "retirement".
The SS Admin even calls it "Retirement" in most of their online material.
OK, you asked. Some Evidence:
1. SSA Retirement Planner
2. Retirement Information
I looked real hard (actually, only for a second) and the words insurance just didn't jump off the pages at me. However, words like "Retirement", "Retirement Benefits", "How to start receiving your retirement benefits", etc are all over the pages.
Both links are pages at the SSA itself.
So, yes, your points are fine and some probably technically correct; I can agree with you from a technical perspective and we can avoid a silly semantic pissing match.
It swims, walks and quacks: From a practical perspective, its a retirement/pension program for most Americans and they see it as such, but you can call it a "risk pooled" "basic subsistence" "insurance program" if you like.
P.S. ..or retract the statement". That seems so pushy, demanding...so unneighborly. Theoretically, we are all on the same side here and should be able to debate/argue without being imperious. Welcome to RedState. I hope you stay a long time and make lots of contributions...and friends.
The greatest single cause of Atheism today is Christians who profess Jesus with their lips & then go and deny him by their lifestyle. That's what an unbelieving world simply finds..unbelievable -Brennan Manning
I suppose all those Union pension funds hold only T-bills?
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