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The modern 401k laws are a giveaway to the financial industry. They stipulate extraordinary restrictions on what investors can/must _invest_ in and fundamental

The modern 401k laws are a giveaway to the financial industry. They stipulate extraordinary restrictions on what investors can/must _invest_ in and fundamentally transfer tremendous economic power and influence to “advisors” and the financiers attached to them.

lastofthemojito 5y ago
The popularization of 401(k) plans (as well as 529 college savings plans, etc) got Main Street on the same page as Wall Street. My parents couldn't have cared less if the stock market tanked. Dad's retirement was a traditional pension, and their savings was in a money market account. Now if the stock market tanks, I watch my retirement account and the kid's college savings plan tank with it. Now that so many of us are participating in the stock market (in one way or another), we're more likely to support policies that Wall Street tells us will keep the market booming. Wall Street won by winning over Main Street.
- ghaff 5y ago
  The alternative perspective on that is that "Main Street" got to collect its interest payments from the local Savings & Loan or from US Government Savings Bonds while Wall Street did whatever fancy stuff it did with exotic investments like equities--which were mostly gated by expensive full-service brokers and other financial people.
- the_optimist 5y ago
  This is true. It does align risks much better in the sense that US unions have always been far more antagonist, hyberbolic, and aggressive than their foreign counterparts, which lead to severe impairment/destruction once the protected industries they existed in were exposed to foreign competition. The most powerful unions now, of course, are the public sector unions, which have a similarly deleterious effect but are immune to competition, direct and indirect.
sokoloff 5y ago
While what you say is true, I think this is something like 7 parts benefit to tens of millions of W-2 employees and 1 part benefit to a much smaller number of financial industry workers. I wouldn’t want to give up the 7 to prevent the 1.

lastofthemojito 5y ago

The popularization of 401(k) plans (as well as 529 college savings plans, etc) got Main Street on the same page as Wall Street. My parents couldn't have cared less if the stock market tanked. Dad's retirement was a traditional pension, and their savings was in a money market account. Now if the stock market tanks, I watch my retirement account and the kid's college savings plan tank with it. Now that so many of us are participating in the stock market (in one way or another), we're more likely to support policies that Wall Street tells us will keep the market booming. Wall Street won by winning over Main Street.

ghaff 5y ago
The alternative perspective on that is that "Main Street" got to collect its interest payments from the local Savings & Loan or from US Government Savings Bonds while Wall Street did whatever fancy stuff it did with exotic investments like equities--which were mostly gated by expensive full-service brokers and other financial people.
the_optimist 5y ago
This is true. It does align risks much better in the sense that US unions have always been far more antagonist, hyberbolic, and aggressive than their foreign counterparts, which lead to severe impairment/destruction once the protected industries they existed in were exposed to foreign competition. The most powerful unions now, of course, are the public sector unions, which have a similarly deleterious effect but are immune to competition, direct and indirect.

sokoloff 5y ago

While what you say is true, I think this is something like 7 parts benefit to tens of millions of W-2 employees and 1 part benefit to a much smaller number of financial industry workers. I wouldn’t want to give up the 7 to prevent the 1.