Monday, May 07, 2012
A Familiar American Story, with a Moral, Even
Once upon a time a woman decided that with 25 or so years to go till retirement, she'd better get her affairs in order, as they say. She did what her fellow educators did and set up a tax shelter annuity plan with a company known for working with people in her field.
Time clipped along, as time so often does. When she moved to another state, she took her account with her and kicked up her contributions to the maximum allowed by law.
Along the way her company changed its name from VALIC, for Variable Annuity Life Insurance Company, to AIG Retirement, which stands for Awful Insurance Group.
Then one day the stock market tanked, and with it, her AIG Retirement account. She watched her lovely figures be lopped by half.
Not to worry, said people much more in tune with the acquisition of wealth than she. The market will go up and down. You'll see. She continued to salt money away and hope for the best. She had to have faith in The System!
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In the meantime, the entire economy, envious of all the attention the stock market was receiving, decided to tank as well. Our graying lass watched the government bail out AIG, which had gotten into some bad debt of its own.
Magically, the company changed her retirement account back into a VALIC account, the better to draw new and naive educators into its lair. Her account wobbled back into the range it had been eight years ago, but certainly no higher. She watched the numbers go up and down, like a disturbing pinball game.
When she finally met with an adviser (who wasn't happy that she'd retired and therefore was investing no more in her VALIC/AIG/VALIC account, she told her that her account would "supplement Social Security."
Supplement Social Security!
It turns out that the Social Security, which Wall Street wants to use for its video game fodder (pinball games having become passe), has proved the sure thing. The retirement account, not so much. For more on how this came to be, I recommend Michael Lewis' book, The Big Short. Don't expect it to have a happy ending.
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People who worship at the altar of the free market economy have been led to one of the falsest idols of all.
Labels: AIG, privatization, Social Security
# posted by Lulu Maude @ 8:50 AM 
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Enjoyed Big Short and Boomarang from him too, about how our meltdown hosed people round the world. Now reading Stiglitz's Freefall. He says AIG paid off Goldman Sach's credit swaps at 100%while lesser creditors got thirteen cents on the dollar. Some animals are still more equal than other animals.
Speaking of free market economy.... my mortgage lender GMAC sent notice of their impending bankruptcy.
the letter they sent was "everything is just fine" & in bold print something like "and you;d better damned well keep making your mortgage payments".
Do as they say, not as they do.
They would gladly foreclose on non payers, while looking to bail out of their own financial obligations.
yep, everything is just fine....
the letter they sent was "everything is just fine" & in bold print something like "and you;d better damned well keep making your mortgage payments".
Do as they say, not as they do.
They would gladly foreclose on non payers, while looking to bail out of their own financial obligations.
yep, everything is just fine....
Thanks for posting such useful items. I’ve been reading his blog with much interest. This post is Well Organized and Informative.
Methinks the little old lady you described has the initials SS.
I plan to start drawing my late husband's Social Security in 4 months when I hit age 60.
That with my military widow's pension and my part time job will feather my nest, albeit with those shitty kind of feathers with the rigid spines that poke you through the pillow case.
Entrusting your money to virtually any non-governmental entity is a crap shoot and the dice are loaded.
It's fucked up but their cadre of lobbyists make sure politicians legislate to suit their interests.
When President Hillary Clinton and her Vice President Michelle Obama take office, maybe they will have the balls to do something about it.
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I plan to start drawing my late husband's Social Security in 4 months when I hit age 60.
That with my military widow's pension and my part time job will feather my nest, albeit with those shitty kind of feathers with the rigid spines that poke you through the pillow case.
Entrusting your money to virtually any non-governmental entity is a crap shoot and the dice are loaded.
It's fucked up but their cadre of lobbyists make sure politicians legislate to suit their interests.
When President Hillary Clinton and her Vice President Michelle Obama take office, maybe they will have the balls to do something about it.
# posted by 
: 7:22 PM
: 7:22 PM << Home
