I have an appointment to look at my retirement money setup next week. Prompted by my ongoing problems with my neck and shoulder and the realization that I really don’t want to do this job for another twenty years, and made worse by the realization that my rollover IRA from my last two jobs is basically making no money at all. I mean, theoretically I have control over it and could have put it all on AAPL and rolled the dice, but that’s not supposed to be my job.
I mean, look what happened: they blew up conventional pension plans (I actually have one from my first job vested on seven years’ employment – not much but maybe it’ll pay for a monthly Coke in the retirement home) and replaced it all with 401K plans. Hey look, you save your OWN money and we’ll match it, and you can invest it however you like! You have the power! You have the control!
Unfortunately, it’s the same power and control a 15-year-old boy has the first time you give him a set of car keys.
I forget whether it was Amarillo Slim, or Doyle Brunson, or maybe just Matt Damon in Rounders, but the nugget of poker wisdom is true: if you’ve been at the table for thirty minutes and haven’t spotted the sucker yet, the sucker is you. The whole 401K stock-based retirement system works on two levels: either you’re the sucker and have to figure out how to make money playing the market against people who do it for a living, or you can trust your nut to one of those people and hope they work in your best interest.
And you can’t even count on that. 401Ks are basically a license for the financial system to go to Vegas with our bankroll. They’re going to get paid on the transaction fees and the percentage off the top no matter how the trades go, so there’s very little incentive for them to play smart or fair. Exhibit A: the London Whale, who managed to lose literally billions of dollars for JP Morgan while trading as part of their safe investments group. This is the safe money, the widows-and-orphans money, the reliable sound been-here-for-a-hundred-years stuff, and the biggest bank on Wall Street is putting it all on red and letting it ride.
But hey, they’re sick of playing it safe! How can you be a big swinging dick if all your money’s in government bonds and index funds? The biggest scam of the last quarter century was Wall Street swindling America into letting them play No Limit Texas Hold ‘Em with our old-age security. And just think, seven years ago, George W. Bush thought it was the best idea ever to 401K-ize Social Security. Wonder how that would have worked out three years later?
They skated. They wrecked the world economy, got bailed out, and promptly poured all their time and energy into fighting hard against the people who saved their asses. And it’s increasingly starting to look like their kept man might just wind up in the White House – and even if he doesn’t, Big Money’s kept catamites in Congress will continue to ensure the Whiffle Life continues for the chosen ones.
Or, to quote Charles P. Pierce over at Esquire:
“The nation is in crisis now, and The Deficit is not it. The nation is in crisis now because an irresponsible and unaccountable money power ruined the economy, and the political system was unwilling or incapable of either fully repairing the damage, or fully holding to account the people who caused it. Half-measures were the order of the day, and too many of them were based on the mostly unreasonable assumption that American corporations are in any way patriotic, and on the entirely unreasonable assumption that the American government today responds to all of its citizens, and not just to the ones who write the checks. We are, most of us, just one bad turn away from being part of the long-term unemployed. We are suckers, we are. We’re playing in a rigged game.”