Monday, May 07, 2012
A Familiar American Story, with a Moral, Even
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.
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.