Social Security Privatizer Larry Fink of Giant Asset Manager BlackRock is a Clinton Treasury Secretary in Waiting

David Dayen at The Intercept has ferreted out that Larry Fink, CEO of the giant asset manager BlackRock, is keen to become Treasury Secretary, and has positioned himself accordingly. He’salready has such a strong influence on Hillary’s Clinton’s thinking to the degree that even Andrew Ross Sorkin has taken note of how she closely she echoes on financial service industry matters: “…“could have been channeling Laurence D. Fink.” This might seem to be a happy coincidence were not it not for the way Fink has curried favor with as having strong ties to Treasury by virtue of having hired former staffers. Per Dayen:

Fink’s most telling hire, however, is Cheryl Mills, arguably Clinton’s most trusted confidante. Mills was Clinton’s chief of staff at the State Department, was deputy White House counsel in the Bill Clinton administration, and is on the board of directors of the Clinton Foundation. Fink hired Mills for the BlackRock board of directors in October 2013, in what observers mused was a ploy to insinuate himself into the Clinton inner circle.

Among other BlackRock officials with ties to Clinton: Senior Managing Director Matthew Mallow is a “Hillblazer” who has helped raise $100,000 or more in donations. Clinton held a fundraiser earlier this month at Mallow’s New York City home. There is no indication of Fink himself contributing financially to the Clinton campaign.

Now the not giving money to Clinton could be a bigger deal than it seems. When Bill became President, he went to great lengths to appoint people who had been loyal donors, particularly long-standing donors, down to low-level roles. Someone I knew who wound up as the #2 in one of the major departments was quite open in saying how he was unqualified for the role, the only reason he got it was for being a early Clinton contributor, and described in some detail how the incoming Administration was rewarding its backers. I am pretty sure the only reason he told me was that this was common knowledge in DC at the time.

Now the Clintons may have moved on from these loyalty tests, or Fink could have satisfied them via other means, say by giving to a PAC or the Clinton Foundation. Nevertheless, he’s also cultivated ties with Treasury through various hires, such as long-estalished banking industry dealmaker Ken Wilson, and Chris Meade, former Treasury general counsel.

As Dayen stresses, Clinton has not ruled out a Treasury Secretary from Wall Street. Indeed, she would probably argue privately that the job requires one, since they need to be able to talk to the markets, and the Bush Administration Treasury Secretaries who were mere corporate executives, like John Snow and Paul O’Neill, were generally scored somewhere between lightweight and lousy.

But appointing someone from Government Sachs or the other Bob Rubin haunt, Citigroup, might be a bit too controversial. By contrast, asset managers like BlackRock are almost never in the headlines outside the business section, and even there, not very much. But that’s no reason to be encouraged.

First, BlackRock, along with Pimco, managed to escape being designated a SIFI, meaning systemically important financial institution. On one level, that may not seem so crazy, since asset managers aren’t part of the central plumbing of financial markets (the payments system and capital markets trading). But that line isn’t as tidy as it seems. Asset managers were bailed out in the crisis just past, via the extension of guarantees to money market funds. But the flip side is that the usual risk-reduction approaches for being a SIFI are measures like holding more equity, which make no sense in the fund management context (the risks are at the fund level, and funds hold no equity; holding more equity at the parent level is not going to do much if destabilizing runs were to take place at funds, which are legal entities they merely manage, not own. Admittedly, there are other checks, like on counterparty risk, that would be germane). Nevertheless, it may be a mistake to be so sanguine, since the effect of Dodd Frank and other post-crisis interventions has been to shift risks out of the banking system on investors….which include asset managers like BlackRock. And who would be better able to plead their case than someone with deep knowledge of that industry?

Second, the big cause for pause is Fink’s devotion to the idea that Social Security should be privatized. From Dayen:

Fink has also promoted the privatization of Social Security, while mocking the idea of retiring at 65, which is easy for a business executive who sits at a desk all day to say, rather than working on an assembly line or as a waiter. Fink owes his initial backing at BlackRock to Pete Peterson, the former commerce secretary who has been at the forefront of the campaign to cut or privatize Social Security. He sat on the steering committee of the Campaign to Fix the Debt, a stalking horse for Peterson’s ideas.

Privatizing Social Security is another big business looting opportunity. Social Security is extraordinarily efficient from an administrative standpoint, even before you get to the fact that a retirement plan ultimately depends on the future earning power of the economy. But rather than focus on things that support that, like wage growth and productive investment, our elites promote the barmy logic of trying to starve the economy by limiting or even more insanely, eliminating Federal government debt.

Private accounts will always be worse due to the much greater costs of running them. And that’s why Wall Street salivates over the idea of privatizing Social Security: retail investment is the highest fee part of the market, so the more they can do to get policymakers to drive assets in that direction, the more big financiers will make.

And there’s every reason to doubt Clinton’s claim that she won’t cut or privatize Social Security. Bill was ready to privatize Social Security, but l’affaire Monica intervened. Ordinary Americans need to thank her for her service, in both senses of the word.

Measures that lower Social Security payouts in real terms, like chained CPI, have been given the Orwellian label of “strengthening Social Security.” As Lambert said in a 2015 post, Hillary Clinton on Social Security Expansion: Words are Wind. A Cold Wind.:

In summary:

  • Clinton will not commit to Social Security expanson
  • Clinton would like to turn Social Security into a welfare program, destroying it
  • Clinton would like a Social Security Commission, and past such commissions have produced unconscionable results.

In other words, if Clinton wins the Presidency and announces Larry Fink as her Treasury Secretary nominee, NC readers will recognize this as a Timothy Geithner moment, that electioneering promises have just been repudiated. Be warned.

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48 comments

  1. DakotabornKansan

    “Something is rotten in the state of Denmark.” – Marcellus to Horatio, Hamlet, William Shakespeare

    It’s the corruption, stupid!

    Shakespeare portrayed Denmark as a breeding ground of political as well as spiritual corruption, a courtyard of human villainy.

    Hillary Clinton calls it the “artful smear.” Trust her. Voters say they want honesty, when they also admire a ruthless leader.

    With BlackRock’s Fink in the Clinton camp, it is a fish that rots from head to tail.

    Her voters just don’t get it. It’s the corruption, stupid!

    Surely this is the best of all possible worlds. If the great Dr. Pangloss were here, he might say something of the sort: Truth is a precious commodity. That’s why I use it so sparingly. Lots of folks confuse bad management with destiny.

  2. ambrit

    I’m not too sanguine about this. I’m approaching Social Security ‘time’ myself, so this directly affects me. How many other ‘me’s’ are there in America today? AARP showed the way, before it fully transmogrified into an insurance sales entity. I can well see a “Son of AARP” coming along to give ‘retirees’, I’m trying not to laugh just now, something to focus their anger through.
    I’m reminded of Mack Reynold’s story “Relic.” An ageing and ‘warehoused’ Tarzan finally has had enough with the American ‘retirement’ system and decides to stalk the halls of Washington with his trusty ‘Iron Tooth.’ Direct democracy at it’s most basic.

    1. Jim Young

      AARP vs “60 Plus Association” (an example of a sponsored group more interested in fake grass roots politics, than seniors’ real interests)?

      I have many very conservative friends, especially from back when I was still a Republican. I left the party, though, about the same time Elizabeth Warren did, and after a fund raiser asked us to “Fight Dirtier than Democrats.” Part of the strategy they wanted us to use was described in what I recall as a Cato Institute suggestion to use “Leninist” propaganda (and implied soft sabotage), exemplified in the 1996 Newt Gingrich/Frank Luntz GoPac memo, “Language: A Key Mechanism of Control.”

      Part of the propaganda seemed creation of astro-turf groups like, to me, the greatly inflated descriptions of the suspiciously sponsored “60 Plus Association” as a supposedly preferred alternative to AARP (which they attacked for some other motives not revealed to the public, but using their sales of insurance policies as a major “public” criticism), even though some checking revealed the 60 Plus Association seemed far more focused on insurance sales to the exclusion of the far more comprehensive activities AARP participated in than just insurance sales.

      By the way, very many business entities aimed at seniors seem to concentrate on insurance sales, or include ads linked to insurance sales. You need to judge for yourself which are opportunists vs worthy stewards of seniors’ interests and financial well being. I started by comparing the actual number of members vs the secret sponsor’s implied numbers.

      1. HotFlash

        Mr Young, (and you may be a relative through my 100% Republican and 50% Young mother :)), thank you for this. Hadn’t heard it before, I will bear it in mind. Makes sense of a lot of things that didn’t before.

    1. HotFlash

      And who do you think Trump’s Treas Sec might be? Defense Sec? Housing Sec? Atty Gnl?

      I figure that if I vote for a criminal, that makes me an accessory. Legally and morally. So far as I know, Jill Stein hasn’t killed anybody, or even threatened to, so if you can’t in conscience vote D or R, why not G, if it comes to that? Meanwhile, seems like Bernie is still a better bet to beat Trump, than Hillary.

      1. John

        Neocons hate trump because he won’t start wars.
        Rep establishment hates trump because he is not in bank/Corp pockets.
        He will not appoint people they want, bound to be better than Clinton, who would.
        Bernie first, I’ll vote for him even if not on ballot because my state will anyway go dem, but would vote trump if necessary to keep that grifter out of office.

        1. fds

          Here Here! That’s some good analysis. When I was younger, and liberals made fun of the old saying, “No enemies to the Left,” I thought it was the usual elitist SOP. But in a world where the Western “Left” is strictly PC code for anti-Caucasian racism, is a world where the centuries old Left-Right paradigm no longer applies…

  3. bkrasting

    I think Yves is right – Fink is a likely T-Sec if Clinton wins. The guys is a gazillionaire. He’s already done everything at Blackrock that can be done. So he’s got his sights on something bigger.

    But Yves is wrong about privatizing SS. I don’t believe that it could be even considered today. The fact is, there’s nothing left to privatize.

    Through the Clinton and Bush years SS wracked up huge annual surpluses – Trillions in total. During those years it was very tempting to carve off a portion of this huge pile of new savings and divert it to Wall Street.

    But that all ended in 2010 when SS started running annual cash flow deficits, From 2011-2015 SS had a drain of cash of $363B. The annual cash deficits at SS will grow rapidly in the next decade. Between now and 2030 the cash shortfall will come to more than $3Trillion.

    It is not possible to privatize a negative cash flow concern. There are no excess annual revenues that could be diverted. SS is redeeming its bond holdings on a monthly basis.

    So worry about Fink? Maybe. Worry that Fink/Clinton will privatize SS? Not a chance.

    1. watermelonpunch

      Oh I thought the angle here was that if they push to have SS made into just a welfare program for the poor, it would have a similar effect that privatization of SS would’ve had years back.

  4. Brooklin Bridge

    Great heads up about Larry Fink.

    That said, for me, the moment of truth that Hillary Clinton is going to break any and all of her campaign promises to her non rich constituents, particularly regarding the social safety net, is the moment she takes the oath of office. For presidents, that has been the bedrock test since at least the 1970’s.

  5. Anne

    The knot in the pit of my stomach tells me that this is where she really is on the economic policy spectrum, her recent efforts to try to eat Sanders’ lunch by appropriating some of his economic message notwithstanding: there’s a reason why she gravitates to someone like Fink. There’s a reason Cheryl Mills has been rewarded with a seat on BlackRock’s Board of Directors.

    Whether or not Fink is or isn’t a contributor to the Clinton campaign, that he is being floated as a possible Treasury Secretary is an example of how the money she has “earned” on the speaking circuit has influenced her thinking.

    Either way, I don’t know how she continues to credibly defend the conflicts inherent in her relationship with the financial industry, nor do I know how she credibly continues to portray herself as a champion of the 99%. I don’t believe her, and I certainly don’t trust her.

    Telling for me have been some of the recent interactions with voters who have questioned her record on criminal justice and diversity; there’s an attitude of how-dare-you-question-me that has crept into her tone and body language that isn’t disguised by her unbelievably phony smile: it reveals the depth of her ambition and her anger at having to work this hard for a nomination that was not supposed to be challenged.

    So, the Fink thing for me, is just one more thing I always suspected and feared was waiting in the wings; I shudder to contemplate what else is in that Pandora’s Box.

    1. rich

      There’s a growing volume of managed ETF portfolios….derivatives of derivatives…BlackRock (BLK), the largest provider of exchange-traded funds, has a long history of nurturing big ETF investors.

      So it’s no surprise that the asset manager has finally quantified the hottest sub-trend in the ETF industry: building ready-made ETF portfolios.

      BlackRock on Tuesday estimated that some $350 billion in assets are tied up in so-called ETF managed portfolios. The fund company contends that this number will double by 2020 as more investors buy into pre-packaged portfolios in particular and as “multi-asset” strategies, including target-date mutual funds, use more ETFs generally.

      BlackRock’s estimate is big, much bigger than previous estimates.

      What does this mean for ordinary investors? Know that more and more investment products, including actively managed ones, will start to use ETFs if they don’t already. This blogger found some recent research that suggests this isn’t necessarily a good thing.

      http://blogs.barrons.com/focusonfunds/2016/03/01/blackrock-etf-managed-portfolios-are-way-more-ubiquitous-than-previously-estimated/

      help us, help you, help us???

    2. meeps

      Also, BlackRock is making headlines outside of the business section. BlackRock was admonished endlessly in Spain’s unaffordable housing protests and the name has been dropped in other cities with similar housing crises. The dark underbelly of the misleadership class…

  6. John Wright

    Those who defend Social Security should focus on the net present value of the income stream. The well off have defended lower estate taxes by talking about “death taxes” and destroying family businesses.

    If, whenever another cut in benefits is proposed, a calculation in NPV terms were done and a headline produced that Obama/Clinton Administration plans to strip say, $25000 in future value from the typical Social Security account, we might see more protest similar to the “Death Tax” people .

    A cut in SS benefits is a real tax increase that all the anti-tax people should rally against.

    For the privatizers, a secondary advantage of removing the SS funding from the direct labor of current workers, which should make current Social Security recipients prefer future workers to be well paid, is that this converts Social Security stakeholders into equity holders who want higher profits, driving costs (including labor) from their equity investments.

    Then the new class of Social Security contributors will become minor “maximize shareholder value” advocates, pushing for wages to come down and more supportive of offshoring of manufacturing and American jobs.

    The “we have to destroy Social Security to save it” people have been very effective in getting Social Security to be referred to as an “entitlement” rather than “saved for and well earned benefit”.

    Meanwhile, Medicare is the real elephant in the room as far as funding problems, but those funding problems represent future profits for the well-connected medical industry.

    Here are some stats from https://www.ssa.gov/news/press/basicfact.html

    Social Security benefits represent about 39% of the income of the elderly.

    Among elderly Social Security beneficiaries, 53% of married couples and 74% of unmarried persons receive 50% or more of their income from Social Security.

    Among elderly Social Security beneficiaries, 22% of married couples and about 47% of unmarried persons rely on Social Security for 90% or more of their income.

    ****************
    It is reasonable to expect Hillary Clinton to appoint a Wall Street oriented committee to “Save Social Security” in her first 100 days.

  7. allan

    Will Josh Marshall, who was so instrumental in rallying opposition to SS privatization under Bush,
    now explain, if and when Clinton is elected, why it’s the sensible, responsible, pragmatic thing to do?

    1. ROM

      Will Josh Marshall…Yes.
      This has been another episode of Simple Answers to Simple Questions.

  8. Roquentin

    Sanders should be hammeringthis day and night. It could bring about a coalition of the old and young, kids getting screwed by the ridiculous cost of tuition and student loan debt, and those already retired or approaching retirement who are going to have Social Security taken from them. It’d be an unstoppable coalition, leaving out only people in early to middle age making too much money to care.

    1. Code Name D

      Sanders should appoint a “forward cabinet,” start building his cabinet in advance. The advantages are huge.

      1) This will lend further credibility of his platform to the skeptic as well as give an opportunity to vet his candidates in advance, building to the credibility of his message.
      2) Add greater resolution to his agenda as his cabinet picks will have greater expertise on the subject and backing up said position with more academic muscle. He wouldn’t be quite so helpless when being assaulted by hack economics such as the gang of four.
      3) Adds to the manpower he can add to the campaign. Assuming he can recruit them to the campaign trail. Instead of just his VP, this is really little more than a spokes person. Cabinet picks can be deployed to shore up battle areas.
      4) On winning, now the forward cabinet has a degree of vetting from the voter, making it harder for the Senate to vote the pick down. The people already know who they are and what they are about.
      5) If gives fuel for Senatorial races. Senatorial candidates can declare their support for Sander’s nominee in advance as use that as a plank in there own platform.
      6) One taking office, Sanders could hit the ground running. With a cabinet already in hand, the only thing he needs is approval from the Senate.

  9. Mickey Marzick in Akron, Ohio

    All Cabinet members are nominated by the President and then presented to the Senate for confirmation or rejection by a simple majority – Wikipedia

    Senator Elizabeth Warren and a few others [Sanders, Sherron Brown] might challenge the nomination of Fink… and would Hillary risk a confrontation with Warren et al so early in her administration? The stink over Fink would be telling… Privatizing Social Security is a political minefield with opposition likely from both sides of the spectrum as it enjoys widespread support.

    And to the extent that Hillary would likely seek reelection to a second term, privatizing Social Security in her first would jeopardize, if not kill, her prospects. But once a lame duck…

    1. Jim Young

      Raise a Stink over Fink to make it impossible for her to do such a thing.

      I very much prefer Bernie, and will most likely follow his lead if it looks like Hillary would do even half the actual damage any republican (of the sort that took over my old party) would.

      Electing “a woman” is not, by itself, a worthy enough goal. I wouldn’t vote for Sarah Palin, Carly “Phonyria,” or Margret Thatcher (though I did write in Sheila Bair in the last presidential election).

      I wonder what Bernie would think of daring to nominate the rare honest Republican, Sheila Bair, for Vice President, or other high office.

      1. watermelonpunch

        I was thinking the same thing. Get ahead of it.
        Though I hadn’t thought of that funny line rhyme. ;)

  10. Jim Haygood

    ‘a retirement plan ultimately depends on the future earning power of the economy’

    That’s why all modern pension plans hold some equities.

    An individual’s cost to own one diversified equity fund and one diversified bond fund is about 0.1% per year. Whereas the expected benefit (compared to SocSec’s all Treasury portfolio) is about 3.0% annually.

    The seminal research pointing to an equity premium was done in the U.S. in the early 1960s, resulting in Nobel prizes for several participants. A half century on, their work has had zero effect on the politically petrified SocSec system — 20% funded, headed for zero in 2033.

    1. GlennF

      Please supply links to documents supporting your statements of fact:

      “An individual’s cost to own one diversified equity fund and one diversified bond fund is about 0.1% per year. ”

      “the expected benefit (compared to SocSec’s all Treasury portfolio) is about 3.0% annually.”

      “The seminal research pointing to an equity premium was done in the U.S. in the early 1960s, resulting in Nobel prizes for several participants.”

      “A half century on, their work has had zero effect on the politically petrified SocSec system”

      “20% funded, headed for zero in 2033.”

      Thanks

      1. Jim Haygood

        Total bond market fund, 0.07% annual expense ratio (not a reco; just one example):

        https://personal.vanguard.com/us/funds/snapshot?FundId=0928&FundIntExt=INT

        Large cap index fund, 0.05% expense ratio (again not a reco, just an example):

        https://personal.vanguard.com/us/funds/snapshot?FundId=0968&FundIntExt=INT

        Equity premium of 6% gives 3% net benefit (vs. 100% Treasuries) in a 50/50 mix with bonds:

        “The equity premium, which is defined as equity returns less bond returns, has been about 6% on average for the past century.”

        http://www.investopedia.com/terms/e/epp.asp#ixzz41rIVV14V

        Seminal research — Fisher/Lorie paper of 1964, establishing the equity premium and founding CRSP which serves as the database for nearly all U.S. equities research:

        http://www.crsp.com/50/images/rates%20of%20return%20paper.pdf

        Nobel Prizes 1990 — Harry Markowitz, Merton Miller, William Sharpe — for Modern Portfolio Theory, which implies in conjunction with the equity premium that the optimal risk-reward portfolio should include equities:

        http://www.britannica.com/topic/Winners-of-the-Nobel-Prize-for-Economics-1856936

        Zero effect: “Since the beginning of the Social Security program [in 1935], all securities held by the trust funds have been issued by the Federal Government.”

        https://www.ssa.gov/oact/progdata/investheld.html

        Headed for zero: “The dollar level of the theoretical combined trust fund reserves declines beginning in 2020 until reserves become depleted in 2034.” — SocSec Trustees Report 2015, page 3.

        https://www.ssa.gov/oact/tr/2015/tr2015.pdf

        (The 2033 depletion date was from last year’s trustees report; sorry.)

        1. likbez

          This all is “water under the bridge.” Called Naïve Siegelism

          http://softpanorama.biz/Skeptics/Financial_skeptic/Protecting_your_401K/Protecting_401K_from_yourself/naive_siegelism.shtml

          Can you spell “secular stagnation” ? And can you explain to us what returns are expected for stocks in the “secular stagnation” regime in comparison with bonds?

          And what will you do if S&P500 drops to 660 like it did in 2008. And stays at this level for a couple of years like oil prices recently did.

          BTW LTM was also founded by Nobel price winners:
          https://en.wikipedia.org/wiki/Long-Term_Capital_Management

          LTCM was founded in 1994 by John W. Meriwether, the former vice-chairman and head of bond trading at Salomon Brothers. Members of LTCM’s board of directors included Myron S. Scholes and Robert C. Merton, who shared the 1997 Nobel Memorial Prize in Economic Sciences for a “new method to determine the value of derivatives”.[3]

  11. roadrider

    Fink has also promoted the privatization of Social Security, while mocking the idea of retiring at 65, which is easy for a business executive who sits at a desk all day to say, rather than working on an assembly line or as a waiter.

    Yes, I know this is Dayen’s quote and not Yves’.

    But I’m disturbed every time I see this argument about “desk work” vs “manual labor” WRT working longer. Its true of course but fails to recognize that many who sit behind desks are also being forced out of their jobs (and yes, this includes “business executives” too) well before 65, have little chance of being hired for anything else and thus don’t really have a choice to work longer. Unless you’re part of the super elite you’re not much better off than the manual laborer when it comes to staying employed past your mid to late fifties, let alone your mid to late sixties.

    1. RUKidding

      I’m extremely lucky (and know it and am grateful) to have what is viewed as a “desk job” as I approach my golden years. I am able to and plan to keep working possibly into my early ’70s. Why? Well for one thing: because I can. For another, to save as much as possible just in case. Child of Depression Era parents, yadda yadda. And if I can pass on something to my nieces and nephews… well good.

      The problem as I see it is not so much that I am able to continue working into my 70s but that my ability to do so, combined with that sinking feeling that I really should and need to due to current circumstances, is that I am preventing someone younger from ascending the ladder. And at this time, someone would definitely be hired or promoted to take my place.

      Well it’s dog eat dog and I gotta think about my own needs at this stage. Ergo, here I stay. And someone younger will have to wait.

      Not great. If I felt more secure about SS & Medicare, I would be more willing to retire sooner, rather than later. But not the way things look now.

    2. Jim Young

      Can’t find the details but I think I recall some startling tid bits about W.T. Grant advising Reagan’s commission on overhauling military retirement pay (part of which was greatly increasing allowances for food clothing and housing that were not included in retirement pay calculations). We had the odd situations of retirees that retired early enough (grandfathered, I think), that got higher retirement pay (based on 50% of base pay which, for them, was a far higher percentage of their total pay) than those of us who retired later, at higher total pay, but a lower percentage of base pay, such that the earlier retirees cost of living raises outpaced our keeping up with inflation).

      After the deed was done, I thought I heard that only four or five W.T. Grant employees that had built up substantial seniority that would have provided healthy retirement pay were able to remain employed until they reached 65 years of age (and that they were essentially senior executives at or near the top).

      The more common case seemed to be like my friend’s father, a master of many trades, seemingly a most effective employee in any position assigned, as well as being a well regarded President of the Lions Club and active in other civic minded organizations, promoted into a management position at Uniroyal, seemingly to exempt him from union protection. They found his capabilities “inadequate” at 17.5 years, just when he would have started accumulating substantial retirement benefits.

      He was more than mildly successful in his own landscaping business after being forced out, but the way he was treated will forever remind me of what advantage some corporations will try to get away with, and has always persuaded me not to invest in my own company’s, less protected 401(k) selections (in my case, the once great Kodak).

  12. Paul Tioxon

    CLOSE THE TAX LOOPHOLE FOR THE RICH

    The famous Obama/Clinton debate moment over Social Security is on youtube. It shows Obama flat out saying the simple reform for SS is to remove the income cap, currently at $118,500 to bring in more revenue without making people work longer or raising the rates of contribution. The income cap is a tax loophole, letting some of the upper middle class off the hook and all of the wealthy millionaires and billionaires. This is inequality, this is a tax dodge, but never referred to as such, an income cap? SHUT DOWN THE TAX LOOPHOLE FOR THE RICH. That would be the truth, instead of the bloodless actuarial speak.

    Bernie Sanders also challenges Hillary on the Social Security reform front, and there seems to be some bending of the financialization curve towards austerity and back to providing for a dignified, equitable income in retirement coming from SS. As I have said before, the destruction of capital from stock buy backs, over a $TRILLION/yr needs to balanced by a doubling of the monthly SS payout. Why, buybacks represent wage suppression. Buybacks are cash fueled by pension fund underpayment. Buybacks are cash transfers to shareholders out the hide of expanding payrolls and stable benefits. The private sector takes the shares after it gives the cash from its balance sheet and then destroys the equity. Where does it go? It goes toward economic contraction due to lack of demand, the consequence of wage suppression and job destruction due lack of capital investment for expansion and replacing obsolete or worn out plant and equipment.

    Paying out greatly expanded monthly payments from the SS Trust Fund would balance this income inequality engine to a degree, as a good first start. From the Feb debate exchange:

    ““I think it’s fair to say we don’t have a disagreement,” Clinton insisted. “We both believe there has to be more money going into the Social Security system.”

    Clinton said she is considering Sanders’ proposal — a provision sometimes nicknamed “scrap the cap” — but is also looking at other options, such as taxing “passive,” or unearned, income that currently does not go toward the popular social insurance program.”

    http://www.huffingtonpost.com/entry/democratic-debate-social-security_us_56bd5161e4b0b40245c607cd

    This is an improvement from the time Obama wanted to scrap the cap when Hillary responded with only silence and blank looks. The issue won’t go away and neither will the line in the sand between the austerity cutbacks and deferred retirement age crap and what is the real solution to give more god damn money to the SS Trust Fund by closing the tax loophole for the rich. Sanders has a proposal in writing to do just that. Where is Hillary’s pledge on DAY ONE to demand this be passed by Congress so that she can sign it into law?

  13. RUKidding

    Never heard of this parasite, so thanks for the heads up. I’m sure HRC will find some very useful role for him in her admin.

    Privatizing SS & Medicare? Shazam! Let’s do it!!11!!

    BlackRock is a blight. Ugh. Just gets worse by the day.

  14. Tyler

    “Ordinary Americans need to thank her for her service, in both senses of the word.”

    Yves, after reading a couple of articles about the climate crisis, I needed this giggle and smile. Thanks!

    1. sd

      Maybe we should start a fantasy cabinet of the worse possible people.

      First question is who would be the Vice President.

  15. Benedict@Large

    Privatizing Social Security will balloon stock prices, which will be great for investors already fully in. But once the privatization swing is over, the reverse will happens. It will be the retirees this time who feel the swing … back in the other direction. Then of course, Wall Street will sigh, “How could we have known?”

    1. Jim Haygood

      Yes, if Soc Sec just plunges in, cannonball fashion.

      Not so much, if equity investment is phased in over 20 years, using a dollar cost averaging approach.

      If it don’t happen soon, the point becomes moot, since Soc Sec won’t have any reserves to invest after 2034.

      1. reslez

        Social Security doesn’t need reserves. The reserves are a fiction, the government paying itself. SS is a transfer program, nothing more. What is needed is a vibrant economy and workers with well-paying jobs. Losing sight of this for industry propaganda is so predictable and sad.

        1. Carla

          Well, a vibrant economy and workers with well-paying jobs are not an option.

          Jobs are over. Between offshoring and automation, they’re gone and never coming back.

          Not that there isn’t WORK to be done, there’s always work, and very important work to be done. Raising and conscientiously educating children, taking care of the sick and the elderly, growing nutritious food, creating the other essential goods and services that a post-consumer society will need, and doing so right here (or right wherever they will be needed). It’s just the well-paying part that’s the stickler.

          We’re going to have to figure out how to lead meaningful lives in a jobless world, and how to meet our needs for basic necessities, and nobody’s even talking about it.

          Easier to build a wall along the southern border — it’s gonna be great!

  16. armchair

    Sounds like a great talking point for Drumpf. Armchair prediction here: Drumpf will be attacking Hillary from her left just as much as he attacks from the right, because why not hit her in her weakest spots, like Social Security privatization?

  17. EndOfTheWorld

    The reason I will never ever vote for HRC is that every single thing that comes out of her mouth is horse manure. It’s so easy for her to say, “I will raise taxes on the rich”, for example, knowing full well that later she can just say “we tried, but it was not politically possible” due to any of a hundred reasons. Her campaign promises now are totally meaningless. I’m interested in possible third party candidates McAffee and Jesse Ventura, who could actually win the election, but if I have a choice between the Donald and the Hildabeast, I will choose Trump.

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