I was out this weekend but a colleague sent me a couple of articles that fit into what I've been posting or commenting on over the past year . . . First up is this article ("The Failure of Our 401(k)s") from the LA Times, which outlines how the 401k program that we were sold back in the late 1970s became the financial smoke & mirrors that corporate America needed to start defunding corporate retirement plans. Their argument ran something like this: "Hey, you already have a 401(k), why do we need to fund you again?". The real stroke of genius lay in how the 401(k) plan allowed industry executives to shelter income (which reduced their tax load) while funneling money into the financial sector that otherwise would not have gone that way.
Moral of the Story: Wall Street got a free injection, which made them feel like masters of the universe; today we get less purchasing power, and a perilous private retirement system.
The next LA Times article ("Financial Scoundrels Have Little to Fear from the Law") makes it clear that, whatever the final outcome of the current economic mess, few of the perpatrators will actually be fingered and/or sent to jail. The reason is quite clear. Unless you were really reckless (like Enron's Ken Lay or Bernie Madoff) there really is no law against being greedy or criminally stupid.
Moral of the Story: White Collar crime pays, especially if it's tied to being criminally stupid.- Mark
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