Juggling Dynamite

The more we individuals avoid debt, spend less than we make and commit to regular savings plans, the less we need financial magicians and risky bets.  The “retirement crisis” is fixable in simple, tangible steps. It’s not rocket science.

The retirement crisis is anything but imaginary.  According to research conducted by Professor Teresa Ghilarducci, head of the Department of Economics at the New School in New York City, only 44% of workers in the United States have access to a retirement plan at work. Except for workers with defined benefit plans, most middle class U.S. workers will not have adequate retirement income — 55% of near-retirees will only have Social Security income at age 65.

A labor economist, Ghilarducci’s work focuses on the need to restore the promise of retirement for every American worker. Her research documents the many problems people now face in planning for retirement: decreasing coverage and contributions, increasing investment risk, portability, leakage, high fees, and the drawdown of benefits in retirement. This body of work led her to put forth a bold reform idea – the creation of Guaranteed Retirement Accounts (GRAs) – to provide a secure retirement to an additional 63 million people. This of course goes against the prevailing trend in our government’s treatment of pensions, particularly public pensions, which governors have persistently raided to avoid the more politically unpalatable option of raising taxes to support the viability of these plans. As she discusses in the interview below, she issues a clarion call for policy makers and political leaders to find a way to save retirement, “a necessary- if now threatened – feature of civilized societies.” As Ghilarducci eloquently notes, all people – rich AND poor – deserve a decent retirement income after a long working life. Are our leaders up to the challenge?

Here is a direct video link.

Brooksley Born is the lawyer who was chairperson of the Commodity Futures Trading Commission from August 1996 to June 1999 when she lobbied Congress to give the CFTC oversight of the off-exchange markets for Derivatives.  In doing so she became enemy number one of the financial sector and their representatives, Treasury Secretary Robert Rubin, Larry Summers, and Fed Chair Alan Greenspan. Her battle for transparency and prudent controls in this area,  was profiled in the 2010 FRONTLINE expose, “The Warning”, which is excellent and can be viewed here.  In the end, the bankers won, Congress rejected regulation of the derivatives market, and Born resigned.

In her talk this week at the Finance & Society conference, Born updated on the ongoing battle to bring Wall Street under the rule of law.  And warned about “the fallacious beliefs championed notably by Alan Greenspan that financial markets are self regulating and that financial firms are capable of policing themselves.” Here is a direct video link to her speech on Wednesday (which starts at 6:32 on the play bar) It is followed by some excellent comments by Anat Admati, professor of finance and economics at Stanford University, who helped organize the conference, and then a discussion between the two.  All well worth watching.  Honest assessments by such knowledgeable insiders in finance, are rare and valuable. (Born’s talk starts at 6:32 on the play bar)

Author and Wall Street historian, Nomi Prins, has researched and documented the facts entwining bankers and politicians in patient detail. Her conclusion is that Hillary Clinton is likely to be just as supportive of the finance cartel as her husband was before her.

Lest we forget, it was Bill Clinton who signed the bill that repealed the Glass Steagall Act in 1999; much to the joy of applauding bankers.  We, the people, have been paying the price ever since.

See more detail on all of this here: Wall Street owns the Clintons: why Hillary can’t outrun her husband’s presidency

“To grasp the dangers that the Big Six banks (JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley) presently pose to the financial stability of our nation and the world, you need to understand their history in Washington, starting with the Clinton years of the 1990s. Alliances established then (not exclusively with Democrats, since bankers are bipartisan by nature) enabled these firms to become as politically powerful as they are today and to exert that power over an unprecedented amount of capital. Rest assured of one thing: their past and present CEOs will prove as critical in backing a Hillary Clinton presidency as they were in enabling her husband’s years in office.

In return, today’s titans of finance and their hordes of lobbyists, more than half of whom held prior positions in the government, exact certain requirements from Washington. They need to know that a safety net or bailout will always be available in times of emergency and that the regulatory road will be open to whatever practices they deem most profitable.

Whatever her populist pitch may be in the 2016 campaign — and she will have one — note that, in all these years, Hillary Clinton has not publicly condemned Wall Street or any individual Wall Street leader. Though she may, in the heat of that campaign, raise the bad-apples or bad-situation explanation for Wall Street’s role in the financial crisis of 2007-2008, rest assured that she will not point fingers at her friends. She will not chastise the people that pay her hundreds of thousands of dollars a pop to speak or the ones that have long shared the social circles in which she and her husband move. She is an undeniable component of the Clinton political-financial legacy that came to national fruition more than 23 years ago…”