Who controls your money?

There is a good editorial in the Times today on investors, and that the Facebook fiasco may well be standard procedure and not the outlier they would like us to think it is. It’s worth following the link to Gretchen Morgenson’s great reporting on the subject. The monied class really doesn’t want to let the rest of us play with them on a fair playing field.
This is an issue that is so entrenched it’s barely talked about anymore. The stock market is really for the rich. The main way by far that ordinary people invest in the stock market (or should I say gamble) is through 410K plans. And we do this because the financial industry has made it pointless to just save. When I first opened a savings account when I was eight or so and dad took me to the bank, the interest rate was between 5 and 6 percent. Just putting your money in a savings account was a viable option. And for a long time now, a savings account will get you at best around 0.5% interest. So they have forced us to gamble in the stock market. And they like it because there is a lot more money in the market to move around and play with. And that’s what they do, and they use our money to do it with, by running those funds you pick for your 401K–it’s rare that small individual investors buy individual stocks.This is also what is behind the move to privatize social security. It would be a huge flood of money to the market. So much more of the public’s money for the fund managers to play with. Because that is what it would be. They would manage the funds and the social security money that would now be gambled in the stock market. You can be sure that would happen and that there would not be millions of new individual investors trying to manage their own money. A couple years ago I was talking to a banker friend and he nearly salivated with excitement over the prospect of getting social security privatized and having all that new money to play with. Of course, in the end, when they lose their gambles, as they will, for that is the nature of the beast, they may get hurt a little bit, but the people whose social security money was gambled away would be destroyed.

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About JP

We're two guys who met in college, in 1980. We've stayed in touch, and like to talk politics, current events, music and religion. JP is nore liberal than Sid, but not in every way. We figure that dialogue stimulates ideas, moderates perspective, and is in general friendly. These are things we need badly in these dangerous times. The blog name is taken from a song by Bruce Cockburn.
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