Considering we’re heading into a solvency crisis, he’s right. At least with current bankruptcy laws pensioners and workers get first dibs on the assets which creditors like investors and mutual funds taking a hair cut. The problem has been for a long time is that we refuse to let the rich take a hit on anything.
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Exactly, one of the nobles realized how close we are to SHTF between a third of renters not being able to pay landlords and most companies being nearly insolvent, right now the best answer for capitalists is to do a debt jubilee and start over. But they won’t do that because they whine about their return even while they have their own fancy palaces with vineyards all over the world and stockpiles of food, clothes, money, and medical care to attend to their whims.
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Common sense is common, it‘s just not the specific insights you have.
Maybe you’ll find interesting how Gramsci describes common sense as as enabling cultural hegemony:
The bourgeoisie developed a hegemonic culture, which propagated its own values and norms so that they became the “common sense” values of all. People in the working-class (and other classes) identified their own good with the good of the bourgeoisie, and helped to maintain the status quo rather than revolting.
That is exactly what‘s happening here with the anchor.
Socialists often distinguish between common sense, and good sense. That‘s what you mean, I assume.
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Since most pension funds and retirement savings are also tied up in the stock market, which is also speculative, I assume that it’s also our fault if we’re wiped out as well.
I’m on board with not bailing out companies, but I’d prefer that the fact that if I no longer have savings to support me when I retire and that the government ends up too indebted to provide any meaningful support in my old age isn’t also turned into some sort of commentary on my character flaws for failing to plan for catastrophes like this.
The fellow’s points are real - every investment is a risk and you sign up for the possibility of total failure when you choose to invest. It is the responsibility of every person with investments to understand that. However, that lesson doesn’t just apply to the ultra-rich. In fact, I’d say it applies more to people like myself, who don’t have other assets to fall back on. But unlike the poster above, I’m not going to point to my colleagues and go “ha-ha”.
[Just to clarify, my personal retirement savings are not heavily exposed to the stock market, having no pension, and being very risk averse. I’m just not big on heaping blame on my coworkers who chose to take a risk to better improve their retirement life over my one-step-above-catfood risk-averse strategy.]
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Is this your way of saying that he’s ripe for the presidency? I mean, he’s got the orange part goin’ on already.
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Nah, schmoes like that only think they’re royalty because they often spend time in the same rooms.
There’s a scene in Ron Howard’s “The Paper” where the crusty old editor-in-chief (Robert Duvall) tells the social-climbing and polished managing editor (Glenn Close) a story about an expensive restaurant in Grenoble and Picasso to make the following point:
The people we cover, we move in their world but it is their world. You can’t live like them. You’ll never keep up.
She dismisses his point, but later on gets a hard lesson about her position by the paper’s publisher (Jason Robards).
From his astonished reaction in the clip, I doubt this anchor ever saw that movie.
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The only individual investors I feel truly sorry for in this situation are people who were transitioning toward retirement and didn’t do their planned portfolio re-allocation in time. That’s bad luck, especially since they might not be able to keep working five more years than they expected. Those retirees who made the transition in time should be fine with a little belt tightening.
Otherwise, I can’t shed tears for younger, still-working people whose aggressive portfolios took a hit – they have time to recover. Nor do I have much sympathy for people of that age with bond-heavy portfolios wringing their hands over the prospect of government bailouts for critical industries* and individuals and other Keynesian stimuli impacting their investment strategies. Both have time to recover if they don’t panic or get emotional.
[* to be clear, this is not an endorsement of the no-strings corporate welfare that neoliberals are wont to hand out in these situations – the kind this anchor thinks are acceptable]
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OK. Fine. I’m going to be that asshole.
Our current “Retirement” system in the USA is the biggest piece of shit ever designed for only one purpose: to enable wealthier people to steal retirement savings from a larger number of people.
To expect people to be able to wisely invest money in the stock market on a general, everyone basis is so ridiculously stupid when even the experts in the field often fail miserably. To expect Joe the guy who bags my groceries or Jane the woman from Accounts Payable or Jim the carpenter or any of us to be able to beat the market or even come close to meeting the market is ridiculous when John the Daytrading Stockbroker can’t. (I mean, on an individual basis, some people can. But my carefully curated, corporately mandated funds from a major 401(k) provider offered roughly the same return as the First National Bank of Mattress during a historically long bull market; and that should be grounds for a malpractice lawsuit, not business as usual.)
We need a return to pensions. Are they expensive? Yep. Too fucking bad. Labor is expensive; get over it. And we need to do it via the government to stop companies from vesting people at 7 years and firing them at 6 years and 9 months.
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I absolutely agree, and don’t think you’re close to an arsehole for pointing it out. Unfortunately, it’s too late to create (or re-create) a proper pension system now, but perhaps this crisis will spur positive change in that regard.
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The first (and only) time I worked for a company that offered 401(k), an HR rep from Paychex or ADP came in to walk us through how it worked. Because I had been entirely ignorant of it before, I asked a lot of questions. My initial excitement dimmed as she spoke and by the time I left the meeting all I could think was “that is the biggest fucking scam I’ve ever heard of”. The people with all the assets get to gamble with my retirement, it isn’t really secured in any way that can’t be liquidated and, if I’m lucky, I still have to pay fucking taxes on it.
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Are people whose retirement are tied to pension funds blameless? If there’s the wide-spread collapse of many sectors of the market as I expect there will be, then those funds will be in deep trouble and their parent companies pension liabilities ended with their liquidation.
Anyway, my point was that I find quite a large difference between your “I can’t shed tears” and sentiment expressed by
even if they amount to the same policy decision.
Practically speaking, I find trying to nail the ultra-rich while sparing the upper-middle class (say $60K+) a bit like trying to stop welfare fraud while preserving the benefits of those who truly need it.
It’s easy to find the low-hanging fruit to start. But every step further you take to punish the guilty harms more of the innocent. The danger of becoming obsessed with the miscreants is that it makes allows you to ignore the damage you do to those you presumably want to benefit.
Policies to let wide spread sector failures fail do have a positive effect on market discipline. But let’s remember this policy will hit the rich hard, and the upper-middle class only slightly less hard. At least that’s how the depression in the 30’s went, and I expect this to be much, much worse.
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If United Airlines collapses, it’s assets will be bought by another company that will hopefully do a better job of running it. Incompetent CEOs should rot in their own filth.
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The thing is, these companies aren’t stupid, and phrase helping them as helping the people on Main Street. I remember in the 2008 bailouts they were basically threatening to make every pension worthless unless they were bailed out. They were particularly threatening to tank various Teachers’ Pensions.
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Call it gambling and have done with it.
If the result is that the gamblers lose their stakes, so be it. Especially the gamblers with huge stakes.
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Solid, real defined-benefit pension funds are built to weather these situations and have the added advantage of institutional clout and billions’ worth of assets under management. Due to strict fiduciary duties and ultra-long-term outlooks, their allocations and picks and diversification strategies take corrections and major crises into account in a way that 401ks and individuals can’t or don’t.
Their beneficiaries will be hit hard, but will come out a lot better than those in 401ks or the DIY amateurs or others in the penny ante casino sector of investing (the sector neoliberalism reserves for the middle class suckers). On a proportional basis, they’ll take a dent similar to the ones experienced by HNWIs with assets under active management – tough but survivable. But after 40 years of Reaganism of varying degrees you basically have to be a unionised public sector employee to be on one of those pension plans.
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so thats what they mean by fecal economy …or is it fiscal? …
While I agree with most of what this Chamath fellow says, he’s definitely not “my kind of billionaire.” If he were, he wouldn’t be around to give interviews.
And chances are, he’s simply another expression of the current “I got mine, fuck the rest of you” mentality.
Your remarks are spot on. Unfortunately the current incentive system is for corporate management to maximize shareholder return (and management pay structure) at the expense of the long term health of the company. Companies that allow themselves to get too cash heavy find themselves either in line for a leveraged takeover, or with shareholders clamoring for them to pay out more in dividends. Sometimes they go on an acquisition spree to use up their cash, not always wisely. Apple is in the fortunate position of having the smarts and the clout to avoid having to do that, but a lot of the cash they accumulated was overseas, as you have noted, specifically to avoid taxes.
I think the chances of the US initiating a real universal pension system are zero. We are barely hanging on to the Social Security system now, as the GOP tries everything that they can to kill it. The biggest single thing that we can do now is to insist on a universal healthcare system run by the government. That takes the profit motive away, saves 20% off the top of costs right away, and allows a single buyer to start negotiating hard with the pharma industry, saving much more. It also allows people to move from job to job without worrying about retaining health coverage. It will be a fight, but the ACA was a start in that direction, and we have to make it happen. If nothing else, in the next pandemic everyone would be covered.
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Me too, I wanna be rewarded by the market for risks I take but then blame somebody else if they go bad
Am I doing this right?
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With that attitude you have a bright future in investment banking (and indeed in the executive ranks of many major American industries).
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