Friday, May 27, 2005

The magic of private investment accounts

Sorry for my extended absence, but Beta gave me a couple of those nice big rawhide bones, so I've been sidetracked. I like it though, because I can gnaw on 'em for a while and then just put my head down and think a bit.

A couple stories on the talking box caught my attention the last few days: one was about the Northwest Airlines pension fund, and the other was about the Minneapolis teachers pension fund. The way it sounds to me, both of them are going belly up (which to us dogs just means we're making ourselves vulnerable. I don't understand why you insist on distorting that).

What they have in common, I think, is that they are both carefully managed accounts that are designed to supplement Social Security, and they are both threatened by not having enough bones to give all the dogs who were promised bones. And, maybe most importantly, they were both created as a way for management to say "Hey, we'd really like to give you more bones to take home everyday, but we just can't - we don't HAVE that many bones right now. But here's what we'll do: if you agree to keep on working for the bones we're giving you now, when you get old enough to just stay home and lie in the shade, we'll make sure you get a big juicy bone to chew on every day."

Fair enough. We dogs are pretty much trusting sorts, so we go along. We believe the stock market (whatever it is) will deliver those big juicy bones.

And then, come to find out, the stock market isn't going to deliver the bones.

The part of the whole thing that makes me snort is that the head dog in Washington actually has people believing his story about carefully managed investment accounts being a good thing for every dog. Who won in these two cases? The management teams that promised the juicy bones: they got all those years of less expensive labor (so they got to keep more bones) and they get out of paying off their promises.

There, my friends, is the real magic in private investment accounts.

That's it for now. There's a bush in the yard that needs marking.

Français/French Deutsch/German Italiano/Italian Português/Portuguese Español/Spanish 日本語/Japanese 한국어/Korean 中文(简体)/Chinese Simplified Tagalog/Filipino


Post a Comment

<< Home