On Saturday’s Forbes on Fox (12/22/12), David Asman crowed about how he and his panel “all agree” that the “solution” to pension problems is to privatize them. Oh, they didn’t use the word “privatize.” Instead, they talked up switching from pension plans to 401(k)s.
In April, The Week reported about 401(k)s
They’re failing to provide enough money for older Americans. As the country’s principal way to save for retirement, the 401(k) program allows employees to set aside a portion of their paychecks, often supplemented with matching funds from their employers, and to defer taxes until they start withdrawing funds. But most of the nearly 80 million baby boomers — the oldest of whom are just now starting to turn 65 — haven’t put aside nearly enough, and are in danger of exhausting their savings within a few years of retirement. “It has already become clear,” said Karen Friedman, of the Pension Rights Center in Washington, D.C., “that 401(k)s have failed millions of Americans.”
Somehow, that never came up in the discussion.
Steve Forbes said, “The nice thing about a 401(k) is you reap what you put in there, eat what you put in there. And that way, if you make a grand promise, and you don’t put the money in, everyone knows it’s a false promise. Let’s have some honesty and so when you are promised something, you know you’re going to get it.”
Host David Asman, who’s supposed to be the objective one, wasn’t. He said, “Rick (Ungar), a lot of people have 401(k)s, they’re doing pretty well with them.”
Ungar was the lone doubter. But he seemed resigned. “Yeah, you know, this is the way we’re heading whether we like it or not. Look, I can remember as a very young lawyer writing some of the first ERISA plans where we had very high hopes that by forming these multi-corporation pension plans, you’d have smart people as trustees running them, they’d make lots of money. It didn’t work out that way. They weren’t that smart, they lost money.” At the end, he was nodding along with the rest of the group.
Mike Ozanian laughably said, “Let’s take the politics out of this.” He added, “What a 401(k) does, David, it doesn’t guarantee you a huge return, but it forces an honest debate on how much taxpayer money you’re willing to put towards public employees because that money is paid that year, and as Steve pointed out, not some crazy promise in the future that’s never going to come true.”
Asman added, “You know what I like about 401(k)s, as opposed to these massive pension plans, is that it gives more discretion to the individual. The individual decides what’s best or not for him.”
Bill Baldwin said, “What if the individual wants a classic traditional defined benefit pension? I wouldn’t outlaw pensions, I would just outlaw the bailouts… If Delta wants to ladle out lavish benefits to its pilots, fine, but don’t come to me the taxpayer when it doesn’t work out.”
Rich Karlgaard said, “The better idea is to move people to 401(k)s, and you can take the risk. Steve has talked about this before, by limiting the options that people have so they’re not going to get great returns, but they’re not going to lose money either.”
“Objective” Asman added, “Steve, they’ll get better returns than the Social Security’s giving them right?”
Forbes agreed. “By 2-3 fold if you start out as a young person, and this way too, you have sensible rules... None of this one size fits all.”
Asman concluded by saying, “This is a nice Christmas segment. Even Rick is nodding his head, we all agree on this, terrific, we’ve got the solution.”
Privatize the profits!
Ho ho ho!
This guy gave a piece of advice that most people sitting in that room nearly swallowed there tounge’s.
No you shouldn’t take that money out or try to move it, YOU SHOULD BE PUTTING MORE OF YOUR OWN MONEY INTO THOSE INVESTMENTS.
Even us midwest hicks can smell a fraud when we see it. Right or wrong, this is how I see the investment world from my small midwest town. They will say anything to make a buck off of us(the lowly investor) even if it hurts people, particularly those close to retirement.
Remember when they, the Republicans, talked about “privatizing” Social Security?
Letting Wallstreet get there hands on that money would be even worse than 08’.
When they get what they want, I hope they don’t slip on the ice.
Hey, it’s been 4 years since everybody lost 1/2 their 401k/403b money during the Bush Administration. Americans won’t remember THAT.
News to Conservatives:
Attention Deficit Disorder is an affliction that effects people, ages 3-17, (non voters) NOT working class 18-65 year olds (voters). For 2 1/2 years, every month, I not only lost every contribution I made into my 403b, but I also got principle pulled, probably to pay for these peoples bonuses.
These self serving people think of nothing but the money THEY can make off of these funds. And they make it weather you lose all of YOUR investment or not.
Maybe we should stop worrying about our schools teaching Creationism, and force them to teach Aesop’s Fables. There’s a good one about the ‘Fox guarding the Henhouse’.
Yes, discretion. Do I want to “hand over” this much money($$$) to Wallstreet, or do I want to “hand over” this much money($$$$) to Wallstreet?
Choices, choices, choices…
And, Mr Baldwin, might I ask your opinion of when the COMPANY EXECUTIVES rob the pension funds to help pay out “bonuses” for the self-same executives or they simply “borrow” from the funds to pay for other things, then simply “forget” to repay the “loan” before they go into Chapter 13 bankruptcy? Or when the company gets that “bailout” and turns around and pays millions to both the executives who were responsible for needing the “bailout” in the first place and to the shareholders before paying off their remaining debts (which they got reduced to pennies on the dollar during the bankruptcy hearings)?
I’m sure you don’t have problems with the CORPORATE “pensions” being paid for by the taxpayers—just the “overpaid” proletariat who seem to think they should have access to luxuries like affordable housing and healthcare and fresh produce and toasters and microwave ovens and toothpicks. No. Let’s ensure that the Delta CEO doesn’t lose his three summer houses and his four yachts and his two private jets and his ski lodge when Delta needs a bailout—but heaven forbid that a taxpayer bailout go to the pilots’ and flight attendants’ and baggage handlers’ pensions. Isn’t that right, Mr Baldwin?