Who really wins under Social Security privatization

Regardless of whether you believe Ron Suskind's article that Bush is planning to privatize Social Security in January, the fact is that Bush has made no secret of his wish to at least partially starve what he regards as that particular beast.



In a rare instance of cutting through the bullshit by a financial reporter, Paul Farrell of CBS Marketwatch reveals the REAL winners of Social Security privatization. [Hint: It isn't you, Mr. Age 25-34, nor is it me (age 49), nor is it my mother (age 75+)]



Excerpt:

Based on past research, this is how I suspect special interests would justify voting in favor of privatization, assuming we could get Wall Street and others to tell us honestly why they feel so passionate about the issue:



Wall Street bankers love it ...



"Don't act naïve Paul, the media knows the game. You worked for Morgan Stanley. Wall Street is obsessed about getting rich, fast, any way we can. Conflicts of interest? So what! Our personal interests always come first, not the investors. That's been the name of game since the exchanges were formed in 1752. Same motto today: 'Greed is good!'"



"The more assets we get under our control, the more fees we can charge. Privatization is our baby. We prefer millionaire clients. But privatization gives us a new way into the pockets of little mutual fund investors so we can siphon off extra fees."



"How will we pay for the $2 trillion in federal deficits when all those Social Security contributions are diverted into private accounts? Nobody knows. But we do know Wall Street is in trouble today, so we need more assets now! Let future generations bail themselves out."



Fund-company owners love privatization ...



"You don't look like Michael Moore. No cameras either. Okay, Paul, we'll answer your poll. Fund owners get rich whether the market goes up or down. Remember, during the 2000-2002 bear market our shareholders lost 30-40 percent and still our income and net worth rose. Today we need more assets to generate more fees, like the banks. We'll get it by donating big bucks to Congress so they pass privatization. Campaign contributions are an investment for us, the way to get around voters."



Fund portfolio managers love it ...



"We make an average of $436,500 a year, ten times what the average investor makes, Paul. And we get it even when investors lose money. Plus we don't have to disclose all the perks. So you bet we voted for privatization. And stop mentioning conflicts of interest. We don't care. The truth is, investors come second, our own families first. Besides, investors get 'enough.' And they're going nowhere, they're stuck with us."



Mutual fund directors love it ...



"Before all the new SEC governance rules, we were paid $252,500 annually for part-time work. Just five weeks work, Paul, the full-time equivalent of $2.5 million a year. We'll work more under the new rules, but we'll make more. So we love privatization!"



Special interests lobbyists love privatization ...



"Paul, lobbyists are merely doing our job representing the special interests of organizations like the Investment Company Institute, the owners and managers who actually run your $7.5 trillion fund industry. ICI has a $30 million annual budget and pays us a lot to get Congress to do what they want. Maybe in a perfect world lobbyists should represent the best interests of America's 95 million mutual fund investors. But that's too idealistic, ICI represents the personal interests of fund owners and managers, not voters, it's that simple."

Ah, but think of all the JOBS all this additional money flowing into brokerage firms will create............in Bangalore.



By the way, as of this writing, the Dow is down 44.47 at a two-month low of 9853.15, on worries about oil prices.



Isn't this what you want to bet YOUR retirement on?