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Tuesday, December 05, 2017

Why the left hates 401-k

On January 26, 2013, the Dow Jones Industrial Average closed at 12,487.02.

Clinton's labor secretary Robert Reich was alarmed.

Reich posted on Facebook the next day:
I don't give investment advice but I have to warn you: Stocks are way over-valued right now. The Dow and S&P are far higher than merited by economic fundamentals -- fueled by small investors who have finally decided it's safe to come back into the stock market. It's the same old story: Big investors -- including the big banks, hedge funds, private equity -- have made a fortune off of the recent bull market. They've lured small investors in. Now, I suspect, they're beginning to sell, while making bets against stocks in the future (short selling) -- which will leave small investors high and dry.
Less than five years later, both indices have doubled. The middle class mocks rich people and loves capitalism.

Reich and other lefties hate capitalism. They oppose 401-k plans because it enriches the middle class and allows normal people to reap the benefits of capitalism.

From on September 25, 2013:

It was a bad idea from the get-go but new research shows that America’s 401(k) revolution has left us even worse off than we thought. Here’s a look at how we got into this mess and where it will take us if we don’t wise up.
Thirty years ago, as laissez-faire fanaticism took hold of America, misguided policymakers decided that do-it-yourself retirement plans, otherwise known as 401(k)s, would magically secure our financial future in the face of gyrating markets, economic crises, unpredictable life events, stagnant wages and rampant job insecurity. It was an extraordinary shift in thinking about public policy: Instead of having predictable streams of income from traditional pensions, ordinary people with little financial expertise would suddenly transform themselves into financial gurus, putting money aside and managing complicated investments in tax-deferred accounts.
There were red flags along the way for our 401(k)s. They were originally supposed to supplement pensions but clever corporate cost-cutters decided that voluntary individual accounts would replace them. Big difference!
Vive la difference. People are better off with a 401-k than with a "traditional" pension plan because so many of those pension funds are underfunded.

There is a fellow I know, let's call him Ron Rurber.

He worked for a company for 30 years. After 20 years there, liberals bought it out.

Within four years the liberals stopped paying into the pension plan -- and has since enjoyed the corporate welfare of the Pension Benefits Guaranty Corporation, a federal government entity that takes over failed pension plans. The PBGC took over the pension plan, allowing the liberals who bought the company to be off the hook.

But his 401-k accumulated enough money. Each month, he now pulls down twice what his pension is without touching that nest egg. His 401-k payments are larger than his Social Security.

Isolated case? Maybe. But the stock market has been very good these last 30 years, and should be good for the next 30 years.

From the Investment Company Institute:
As of June 30, 2017, 401(k) plans held an estimated $5.1 trillion in assets and represented 19 percent of the $26.6 trillion in US retirement assets, which includes employer-sponsored retirement plans (both defined benefit (DB) and defined contribution (DC) plans with private- and public-sector employers), individual retirement accounts (IRAs), and annuities. In comparison, 401(k) assets were $3.0 trillion and represented 17 percent of the US retirement market in 2007.
That $5.1 trillion is split among 54 million people. That is a lot of money that will mean financial independence when they retire.

And independence -- self-reliance -- is the last thing lefties want for America.

Which is why they want to trash the 401-k plans.


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  1. From my own personal standpoint I used to get looks of pity from nurses and surgical techs who knew what neighborhood I was living in during my peak productive years of practice. They thought I wasn't making any money. Then a few years before retiring I bought one of the nicest homes in town for cash. I made more money off the stock market this year than the university was paying me when I retired, and I'm not even drawing on it. The strategy is to live off tax free mutuals as much as possible before age 65.

    The productive middle are the kulaks of America. The Marxists need a large class of propertyless wage slaves in order to get what they want. To get that they also need to be rid of kulaks. And they've already proved that in order to get that they are willing to kill kulaks.

    That's compassionate liberalism for you.

  2. That Ron Rurber fellow was smart. No wonder the elites hate him.

  3. FWIW even Trump thinks the markets are over-valued (as do I).

    But, yeah, the Lefties hate the idea people are doing well.

    PS It's Vive la difference.

    From the French, not Spanish.

    1. Thanks. I shall fix
      (Sings) Viva, viva Las Vegas!

  4. You want to get wealthy? Listen to what Robert Reich and Paul Krugman advise and do the opposite.

    BTW, Dimocrats are eyeing those 401-Ks and IRAs. If we let them get into power again look for them to seize them for the "common good" and redistribute them to the poor because poor people didn't have the chance to save money. - GOC

    1. This is why I mock Paullie "The Beard" Krugman.

    2. I have even less use for Robert third Reich than I do for The Beard. He is a waste of good air. During the election, I often would see my liberal cousin posting video clips of him either speaking or voice overs of him. I can't believe just how wrong he is, on so many things. It is like he is actually trying to get things wrong, just to see if anyone is paying attention. My cousin is of course the typical college educated liberal. But at least we are able to have civil discussions as she educates herself on the topics she cares about, and she is willing to be decent in the manner with which we discuss things. So we can have good solid disagreements without getting angry.

  5. Just wait. Defecrats will show their patriotism by demanding all our 401ks be handed over to wipe out the national debt - 20T in national debt => 20T in 401ks. It's a perfect match. In return they'll guarantee a slow growth / low interest payment in return. You know? Socialist security.

    C'mon. It's for the higher good - is what they'll argue. Where's your "love of country"?!

    It's coming.