Today, I’m announcing the beginning of MarxismWatch™. I founded MarxismWatch™ to decode the writings of today’s Marxist professors and Wall Streeters for the average American so that we can all get on the same straightforward and proven path to a prosperous present for a select few of us (by us I mean 'them' and by 'them I mean Wall Streeters and economists and the bureaucracy).
The below commentary is in response to an article published on January 26, 2018 at MarketWatch (no affiliation with MarxismWatch™) by Teresa Ghilarducci - known for not taking the tried and true babystep "boil the frog slowly" approach to promoting cradle to grave government safety nets, but preferring bold ideas that fly miles beyond Marx himself - and Tony James - who manages money and wants to manage all the money but, unlike what he says about financial advisors in the Part 1 article, he and his firm add value to his client relationships and certainly all Americans will recognize that value and realize what he knows about their financial advisors today (no value, negative value, really bad value) once the Government Robo-Advisor program is implemented under "current infrastructure" (wink, wink).
MarxismWatch™ comments in . James and Ghilarducci in "". See the original and buy their books at Amazon!
Update 1/28/18 - You can also read here my comments on the 2016 Ghilarducci / James plan and concepts present in the previous Ghilarducci plans - which seem far less created on a 'design' and more about trying any concept that may make taking over retirement accounts palatable. The current 2018 plan seems to be based on the recent news cycle discussing 'poverty' to throw a damp rag on economic growth stories. The basic idea that the poor need stocks and hedge funds I find not as credible as the reality that this is a plan to take over retirement accounts.
"There’s a better way forward for our country. It is a journey we can start today, drawing on straightforward, proven ideas."
[Peachy! A ‘journey’ makes me think of things like The Bachelor, The Bachelorette, and Bachelor Pad, but, OK let’s dive into the details of those “proven” ideas].
"It’s a way to ensure every full-time worker can save enough to guarantee his or her standard of living in retirement."
[Sounds great!... But, I’m wondering about the word “worker” instead of American. I’m sure it’s not a plan to transfer the wealth of entrepreneurs and the unborn to today’s ‘workers’ though… can’t be.]
"A way to save for retirement with a tool that delivers a higher and safer rate of return than the typical 401(k) or IRA."
[I was just told about one of these things the other day… is it an Equity Indexed Annuity?]
"A way to address a national crisis without adding a dime to the deficit or creating any new government infrastructure."
[MarxismWatch™ style analysis – Good use of political talk to shut down the parts of our brain that may be skeptical.]
"We have designed a retirement system that meets all of these specifications and delivers a retirement plan to 85 million Americans that don’t have one today. And our solution is simpler than you might think. It is called a Guaranteed Retirement Account, or GRA."
[Oh! It's a Government Robo-Advisor (GRA)! Got it! Of course! Those don’t cost anything and are super profit centers. Why didn’t someone think of that like decades ago?!]
"The GRA is a pragmatic way to ensure that all workers can save enough to retire. The plan moves our retirement system from an inefficient hodgepodge to a unified, sustainable, high-performing, pro-growth framework for fail-safe retirement. Our plan is built for bipartisanship, drawing on the best ideas from both parties."
[MarxismWatch™ style analysis - Combining tough words and political gobbledygook… parsing… parsing… computing… OK, bipartisanship, it must be good then like the bipartisan scraping of the national budget has been nothing but good. I'm sure future government shutdowns won't impact my Government Robo Advisor, right?]
"A universal retirement solution
GRAs offer everyone, from Uber drivers to CEOs, their own fully portable accounts. Under our plan, 85 million Americans who currently do not have a retirement plan would receive one."
[Everyone’s the same. Huh. But, can’t we all invest in a Robo-Advisor today? What’s so special about the Government Robo-Advisor (GRA)?]
"A helping hand (not a handout)
The GRA is a personal retirement savings vehicle, not a government entitlement. It delivers via individually owned accounts and uses existing government infrastructure."
[Yes, I read that above… still not sure what it means. Hoping to see some "proof" of the "proven" ideas, but maybe it's in the book.]
"A plan that keeps you in control"
[MarxismWatch™ editor's note expert - We may do a follow-up asking Theresa and James what the definition of "in control" is. Or maybe the Robot is there to keep "you" from taking too much and therefore you're under their control. Gotcha, the public is kept "in control" when the robot taking their retirement money frightens them.]
"Our plan is built on convenience, personal choice, private ownership, and effective investment. You accumulate your money in your own account. If you die before retirement, your savings are passed on to your heirs."
[Choice. Like it. And we at MarxismWatch™ would like to congratulate the authors on the bold change to their original idea of passing the accounts at death to the government. Or, by passing it on to our heirs do they mean through the government? Because they have a Government Robo-Advisor account too? I'm sure the final bill will totally not have any surprises like that old plan of yours...]
"A GRA represents lifelong retirement security. Each account is converted into a government paid annuity that assures postretirement income and a set standard of living as long as the retiree lives."
[Like Social Security? I’ve got that already (not really). What happened to choice, private ownership, and control? I’m starting to think “portable” isn’t true either. Or the part that we won’t get the prior version of the plan that includes a massive death tax.]
"A mandated gift"
[??????? Even the experts here at MarxismWatch™ don't know what a "mandated gift" is.... ]
"Although mandatory, a GRA is essentially cost-free for employees earning less than the U.S. median salary. With an annual matching $600 tax credit for all workers contributing to their GRAs, households earning up to $40,000 per year have their savings fully reimbursed. Higher-earning individuals also receive this $600 tax credit and deduct the balance of their 1.5% contribution from their taxes."
[Huh? A gift? So, you’re going to take Social Security and now this from my pay, and it's a "gift"?
Since we’re borrowing today from our kids and grandkids and China to fund our government today, I guess I can wrap my head around it being a “gift” from a future generation and from China… still not computing why it needs to be withheld, that sounds awfully expensive and would require a big increase in government infrastructure. Wouldn’t it just be easy to “gift” it all from the unborn and just print more money?!]
"Not another form of Social Security"
[A retirement check from the government based on money that goes in based on my "gift" contributions... sounds like another form of Social Security.]
"This is your own money in your own account, outside the government’s purview. Each individual gets an annuity with personally accumulated retirement savings. What’s more, the plan leaves Social Security unburdened."
[Sounds a lot like the withholding is under the government’s purview. And, the investments are going to have to be, I mean, you said in Part 1 that financial advisors can’t help me.
It is an Equity-Indexed Annuity! Knew it! I’ve done some research on those. They don’t work like advertised.]
"Not another new government bureaucracy
GRAs use existing government infrastructure to deliver annuity payments, and nothing more. Individuals contribute to a pooled trust managed by a pension manager of their choosing. Returns are higher and administrative fees are lower than in individually directed accounts. Account- holders decide when to retire and convert their savings into lifelong income."
[So, we are going to what, go to Social Security offices to get advice. I don’t know if you know this… but… they aren’t always known for giving advice on payments or fixing problems without ‘cost’… yeah, I think you may not have thought through this ‘no new bureaucracy’ thing.
“Returns are higher”… this is starting to sound like a Hedge Fund scheme. The S&P 500 Index just beat a Hedge Fund manager over 10 years. ]
"Not a source of new taxes or a larger deficit"
"The plan’s tax credits are paid in full by redistributing existing government subsidies from the wealthiest Americans to the entire taxpaying population. In addition, by tackling the retirement crisis head-on, the plan creates future government savings."
[No (wink) new (wink) taxes (wink). It’s a “gift” from the future (wink, wink).
MarxismWatch™ technical analysis – They’re saying they want to take your 401(k) or 403(b) plan away and but they don't get out of their social bubble to realize more than the “wealthiest Americans” have 401(k)’s and IRAs.
MarxismWatch™ economic analysis – “Creates future government savings” means you’re gonna pay more in taxes. To the Marxist, bigger government savings = bigger government spending.]
"Our plan requires all U.S. workers to contribute along side their employers into an account wholly owned and controlled by the worker. Because GRA savings are invested by regulated professionals into a diversified portfolio of high-performing assets, they can grow substantially over time. The accounts are pooled, so they leverage rock-bottom fees and other economies of scale. A principal protection guarantee buffers savers against economic and market meltdowns."
[So, this “gift” is from your paycheck directly, but also from your “employer” (wink) which means expect a lower salary and bonus.
Starting to sound like you’re giving my money to a Hedge Fund, Wall Street type like James and also the insurance companies.]
"GRAs are fully portable, with balances unaffected by moves to different employers or states. And GRAs are immune to the erosion that is endemic to 401(k)s; employees are barred from withdrawing their money before they stop working. Upon retirement, GRAs produce consistent income, month to month and year to year, ensuring people’s quality of life by filling the gap between Social Security and the cost of living. They provide a reliable pension equivalent, paying out a steady stream of income over the entirety of the worker’s life—the biggest single missing piece in today’s defined-contribution plans."
[MarxismWatch™ translation expert – “Fully portable” here does not mean you can move it to yourself or anyone else. It just means that when you’re fired and need your account to live on, tough luck! The Government Robo-Advisor only gives your money when they say!
Get a bad diagnosis from the doc and want to taste a little bit of the account you and your grandchildren and future immigrants have been "gifting you" before you croak? Nope! That’s being transferred in a very “portable” manner to “your heirs Government Robo-Advisory account” at your death for them not to taste either!]
"A healthy and secure retirement system has three components. The first is a Social Security system, which keeps existing benefits secure. The second is a Medicare system, which guarantees health care to all retirees. And the third is a pension-style retirement income delivered by our plan. The GRA represents the critical missing step toward fixing our broken retirement system."
[There are robo-advisors and EIAs today, but the Government Robo-Advisor is going to fix them by removing them and firing all their workers.]
"GRAs are not a replacement for Social Security, an essential safety net that may soon need shoring up. Our plan supplements Social Security. It is an alternate approach that empowers workers to save enough for retirement when Social Security falls short."
[Social Security isn’t working? So, you’ll need more from my paycheck? So, we’re looking at 12.4% today, plus this Government Robo-Advisor “gift”, plus more?]
"Our GRA plan leverages the best practices of Canada, Australia, and other countries that have successfully secured retirement for their populations. GRAs enhance both individual savings and lifetime retirement benefits, and advances an idea both political parties can support: government-backed accounts under individual control that do not swell the budget, raise taxes, or create new government bureaucracy."
[We want to model Canada. I think that’s just Teresa's sense of humor coming through.
Yes, governments do agree with taking more of my money, but I’m still not sure the cost sounds like it’s going to do much for me, and I may not ever get to spend it.
And, it’s really not more convincing the 8th time saying it has no cost, no “tax”, and no one needs to run this Government Robo-Advisor. It’s the opposite of convincing.]
"We know there is demand for a solution to our coming retirement crisis [from politicians who want you not to have money to leave the system, listen to the social media news feeds you want, etc.]. The vast majority of Americans want policy makers to address this challenge. In national focus groups conducted across different regions and demographics, our plan received overwhelming support. Overall, 71% of participants supported our policy recommendations for a national retirement system so simple it could be enacted tomorrow"
[Riiiiiiggggggghhhhhtttt…. Let’s just see the participants in that one! Enough with the polls of Teresa’s students, family, employees, Bernie, the Hedge Funds lobbying for this, etc.].
"All Americans stand to benefit from a smart, fiscally sound retirement system—one that is built on personal responsibility [“gifts from your paycheck and from the future”], facilitates personal savings [that we may “gift” you some back one day!], harnesses the benefits of economic growth for all [especially hedge fund managers that support the 'right' kind of politics], and guarantees that full-time workers will be secure in their retirement" [I'm feeling like there's an * coming with the official plan... guarantees are only good for today’s workers - but not the young ones who certainly will have to pay in more... this guarantee expires when the funds are mismanaged, invested in the next socialistic solar panel company failure... we will only invest in companies that say the right things on social media news sites... and will also end if there is a shortage of expected “future gift givers” by disincentivizing citizenship and baby making].
So, I have to admit to not usually having ideas that are more extreme than Ghilarducci and James, but I'm just wondering why go with the Robo-Advisor? It's very 2015.
By the time we get everyone's money to James and Wall Street we're going to have self-aware robots, artificial intelligence, the singularity, and what's going to stop Canada's GRA or a GRA v2.0 from blowing up our robots and gifting our money to their citizenry?
It's an all new technology, who can say what might go wrong with a simple Robo advisor? I know Theresa will say, "but the government runs it like they do already on existing infrastructure like they do for health care and Social Security"... sure, but those probably had a few bumps when they were started.
We've all seen what can happen when someone messes up code on the blockchain and wipes out your virtual currency and maybe someone 'accidentally' loses my Government Robo Advisory account if the tech is outdated.
Let's think to the future and use those "gifts from the future" and all current 401(k) money and invest in AI technology and not robos.
It could be our "gift to the future" from the money from the future!
Surely that will be a good investment use of the funds - I'm sure James can "gift" fund a start-up. Perhaps MarxismWatch™ can sponsor a part of GRAv2.0 because with all these robots paying our bills we're going to have to look at robots to grow our food and change our diapers when those of us still under 40'ish are finally able to tap into these accounts and Social Security and I'm going to need a job in the future, James.
And, I have ideas for that too. Since farms, farmers, grocery stores, and pizza joints make up something like 98 Gazillion of current and future economic activity that's just a waste - I mean it makes that little $17B number that Theresa thinks financial advisors are wasting look like nothing! - and that a robot will no doubt do in the future, let's invest in that technology today and use the Government Robo-Accounts to fund a food robo.
Remember it was my idea James and Theresa... Don't turn off my future retirement "gifts" please!!!
In all seriousness, my purpose above is to criticize, comment, report, and educate the public on the consequences of economic ideas when it comes to the impact on their personal lives and finances.