Sunday, February 28, 2010

Matt Steinglass beats the Market

and thinks his investment manager is a genius. Matt makes an obvious point that seems completely lost on the GOP,
I invest with one of those Warren Buffett-style “values investor” types. I started putting money into the market in significant amounts back in 2000. Today I took a look at how he’s doing with my money, and I saw that at some point over the past few weeks, my overall stock performance, since I started putting money into the market, had edged into the black. Since 2000, overall, I’m up a bit less than 1%.

In other words, my investment manager is a genius who is beating the market by over 20%. 10 years ago, the S&P was at 1346. It’s down 22.5% in the past decade.

So I’m with Paul Ryan: I think we should take our Social Security funds and start investing them in the financial markets. Right?
Social Security was created after the Stock Market collapse of 1929 as an insurance policy for future generations against collapsing stock markets. The basic social contract is to provide some income in retirement for those who spent their life working hard and contributing to our economy. Every developed country in the world has a form of social security.

Our Social Security was never intended to be the only retirement income for anyone, although for the working poor, it often is there only income.

Social Security is also insurance against ignorance. Remember the thousands of Enron retirees who had invested 100% of their 401(k) in Enron stock only to be whipped out? They all still have Social Security. What would they have if they had been allowed to invest their Social Security savings?

What is the value to society and our economy retirees have income in which to provide for themselves and what would the cost be if they were destitute?

What moral obligation do we have to those who worked a lifetime paying taxes and contributed to our economy?

What would happen to todays retirees who lost 22.5% of their social security savings in the last 10 years?

What would happen to equity markets if they were flooded with hundreds of billions of new dollars each and every year by social security investors?

Would the Republicans running Wall Street banks and investment houses reap huge riches from those hundreds of billions of new dollars pouring into equity markets each and every year? Of course they would and perhaps this is why the GOP advocates destroying social security never mind the best interest of the country or it's working class.

My guess is nothing is lost on the GOP.

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