the fed's new powers
I am really worried about the president's plan to privatize social security...or at least to allow the public to put it into funds to then be invested in the stock market. he question comes to this -- who's going to be there to hold the fund managers accountable?
It seems to me that the proposal has plenty of possibilities to be abused. Say, for instance, that the government were to use the investment into a company's stock as leverage in a bidding process. Imagine that firm A currenty is being invested in by the SS fund at an amount that equals, say, 5% of it's total stock ownership...now imagine that the government opens bids on some large project that firm A can do...what's stopping the government from strong-arming firm A into a lower than low bid lest the SS fund pull out of it's 5% stake in the company thus destroying it and all other investors? Furthermore, what's stopping the government from promising to invest heavily in firm B if they offer the lowest bid on a contract? What's stopping a Republican President from calling for the removal of SS investment in a Dem-lead company (i.e. CostCo.) or a Democratic President doing the same to a Rep-lead company (say, Sinclair broadcasting)?
The questions as to the implications of a market crash (or adjustment) have been asked all over the place, but it seems to me that the ethics of the situation are open to even more dire consequences.
And then there is the bigger question that I only have a cyncial answer to...why are Republicans, fiscal conservatives as they say they are, have so much desire to pour trillions of government-controlled dollars into the stock market where they will be used to, by the stock market's nature, buy into privately run companies -- thereby leading to partial government ownership of the largest of American corporations? Besides the potential windfall in the pockets of those Americans who are already well off enough to have a large portfolio that will explode with the trillions of dollars being dumped into the market if this thing goes through, I have no answer.
It seems to me that the proposal has plenty of possibilities to be abused. Say, for instance, that the government were to use the investment into a company's stock as leverage in a bidding process. Imagine that firm A currenty is being invested in by the SS fund at an amount that equals, say, 5% of it's total stock ownership...now imagine that the government opens bids on some large project that firm A can do...what's stopping the government from strong-arming firm A into a lower than low bid lest the SS fund pull out of it's 5% stake in the company thus destroying it and all other investors? Furthermore, what's stopping the government from promising to invest heavily in firm B if they offer the lowest bid on a contract? What's stopping a Republican President from calling for the removal of SS investment in a Dem-lead company (i.e. CostCo.) or a Democratic President doing the same to a Rep-lead company (say, Sinclair broadcasting)?
The questions as to the implications of a market crash (or adjustment) have been asked all over the place, but it seems to me that the ethics of the situation are open to even more dire consequences.
And then there is the bigger question that I only have a cyncial answer to...why are Republicans, fiscal conservatives as they say they are, have so much desire to pour trillions of government-controlled dollars into the stock market where they will be used to, by the stock market's nature, buy into privately run companies -- thereby leading to partial government ownership of the largest of American corporations? Besides the potential windfall in the pockets of those Americans who are already well off enough to have a large portfolio that will explode with the trillions of dollars being dumped into the market if this thing goes through, I have no answer.
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