In an article about 401(k) plans, and the plans of some Democrats to take them away, the L.A. Times tells us:
But even Noble Prize-winning economists have admitted that they don’t closely monitor their 401(k) statements — allowing an initially well-balanced portfolio to become dangerously overexposed to stocks as those investments grow faster than bonds.
Yeah, but who really cares about the thoughts of an economist whose top honor is winning an engineering prize?
Hooray for the four layers of editors!
On a serious note: James Rainey recently mocked Rush Limbaugh for warning that Democrats have been talking about taking away your 401(k):
In a time when the nation calls out for cool leadership and rational discussion, Limbaugh stirs the caldron, a tendency he proved in a particularly grotesque way last week when he accused Obama’s party of plotting a government takeover of 401(k) retirement plans.
“They’re going to take your 401(k), put it in the Social Security trust fund, whatever the hell that is,” Limbaugh woofed. “Trust fund, my rear end.”
A slight problem with Limbaugh’s report: Obama and the Democrats have proposed no such thing.
The proposal, in fact, emanated from a single economist, one of many experts testifying to a congressional committee.
The president-elect has thus far shown as much interest in taking over your 401(k) as he has in moving the capital to Nairobi.
That may be, but that’s not quite what Rush said. Limbaugh’s specific accusation — that “[h]is [Obama’s] party is now talking about a government takeover of 401(k)s” — is supported by today’s front-page article, which tells us:
“The current 401(k) system has not turned out to be as secure as we want it to be,” said Rep. George Miller (D-Martinez), chairman of the House Education and Labor Committee. “It has not provided the returns that we want it to. And it’s not provided the level of savings that we want it to. It’s kind of failing on a number of fronts.
“Should there be a serious reassessment? Absolutely,” he said.
Miller’s committee already has held two hearings on the effects of the financial crisis on retirement savings plans. At one, a professor from New York’s New School for Social Research called for creating government-backed retirement savings accounts that would offer a guaranteed, inflation-adjusted 3% return. The government would contribute to the accounts using money gained by eliminating the annual tax breaks for 401(k) savings — about $80 billion.
The idea has not been embraced by key lawmakers, perhaps in part because abolishing the tax break on 401(k) savings could reduce participation.
But the fact that the idea received a serious hearing before Congress is a measure of how much the crisis has shaken confidence in the 401(k) approach.
“In July, my plan was looked on at best as a noble idea . . . but completely unrealistic,” said the plan’s author, Teresa Ghilarducci, a professor of economic policy analysis at the New School and a longtime critic of 401(k) plans. “I was viewed as thinking out of the box, and now I’m in the box.”
(Doesn’t she mean a “nobel idea”?)
It’s reassuring to know that someone who wants to kill your 401(k) plan considers herself to be “in the box.”
P.S. Rainey is the same guy who told us not to worry about the Fairness Doctrine. They’re not going to take away your 401(k), Rainey assures us, and “nobody” is talking about implementing the Fairness Doctrine. Nobody! [Said in the rushed tones used to disclose onerous loan terms at the end of a radio commercial for refinancing:] ExceptforChuckSchumerJeffBingamanDickDurbinandafewotherDemocratlawmakers.
I imagine Rainey will still be mocking conservatives even after Democrats have convened hearings on the subject, and supporters of the Fairness Doctrine are describing themselves as “in the box.”