Hampton, NH. It appears Newt Gingrich has thrown his hat into the Wall Street casino, recommending that younger workers throw their social security savings into private investment accounts.
I am getting so tired of politicians shilling for Wall Street and the private social security agenda most recently put forth by George W. Bush. The fact is that fat cats like Bush, now Gingrich and definitely Mitt Romney have all made a fortune leveraging Wall Street in one way or another.
How Gingrich can state that the program in Chile in privatizing was a success is beyond me. He is distorting the facts. As recently as 2006 Michelle Bachelet and Sebastian Pinera, two candidates for the presidential race there, admitted that their pension system was a mess. In 2005, the World Bank was highly critical of the Chilean pension system, where it was found that as little as 50% were covered under its retirement program.
What Chileans found then, and we are all aware of now, is that Chilean DC accounts (defined contribution) accounts were perceived as relatively risky investments. Our defined contribution systems, most notably the 401(k), which everybody from Goldman Sachs to Fidelity to Vanguard wants to manage, has proven to be a disaster like Chile’s. Target-date funds, the latest financial alchemy from the asset management industrial complex, the same folks who brought you the dot.com meltdown, subprime mortgages, student loans and now a social media bubble with Groupon, are the latest Wall Street offering, and another Hidenberg Zeppelin in the making. I wonder if Newt has one of these puppies. Probably does, as BlackRock now handles the index funds for the federal government thrift savings plan (TSP). www.tsp.gov.
Gingrich, like Romney, Bush and the rest of the Congressional wrecking crew, including the Federal Reserve, corporate executives and the nation’s banks do not rely on speculative market returns that New Gingrich is shilling for. They like sure things, like trading on inside information, guaranteed pensions, annuities and what have you.
The Childean approach is a disaster Newt. I hope to God he does not use the British experience, which was worse. The British system is a Highway to Serfdom.
Markets are not efficient and stocks can be an abyss of nightmares. I wonder if Mr. Gingrich has shares in say General Motors, Citigroup, Bank of America, Enron, WorldCom, Kodak, Research in Motion, NetFlix or Groupon. Or how would you like to be in General Electric or Cisco for a decade, and watch your equity in these companies melt like snowmen in the sun.
No worries for guys like Newt…they will get sweet government guarantees with their pensions, big fat lobbying assignments, book deals and what have you. Occupy the Truth, Newt.
