Who owns the vast wealth of the United States? Old people. According to the Federal Reserve, households led by people over the age of 55 own 73% of the value of household shares, and the same share of the United States' total wealth. Households between the ages of 65 and 74 have an average net worth of $ 1,066,000, while those aged between 35 and 44 have less than a third as much, at $ 288,700.
A socialist can see injustice in that inequality. But the elderly know that this wealth gap is the difference between the beginning and the end of a career with work and economy, making the last mortgage and retirement rather than the first. 72 percent of the value of all domestic shares is owned by pension plans, 401 (k) and individual pension accounts, or held by life insurance companies to finance annuities and deaths. This wealth accumulated over a lifetime and is for the benefit of all Americans.
That means it's your life savings down the line ̵
Most recently Elizabeth Warren.
Her "Accountable Capitalism Act" would wipe out the greatest legal protection that pensioners today enjoy – the requirement that corporate executives and fund managers act as confidential on behalf of investors. In order to prevent union bosses, money managers or politicians from raising pension funds, the 1974 Employee Security for Retirement Act requires that a trustee manage a plan "solely in the interests of participants and beneficiaries. . . with the exclusive purpose of providing benefits to participants and their recipients. “The Securities Commission places similar requirements on investment advisers, and state laws impose trust-elected responsibilities on state chartered companies.
Sen. Warren would blow up these conscripts by rewriting the charter for each company with gross revenues of more than $ 1 billion. Each company, proprietorship, partnership and limited liability company of that size will be forced to register as a federal company under a new regulatory framework. Under this new Warren Charter, companies currently dedicated to the interests of shareholders will be rearranged to serve the interests of many new "stakeholders," including the "workforce," "the community," "customers," "the local and global the environment "and" social and social factors. "
Eliminating companies' duty to exclusively serve investors and force them to serve political interests would represent the largest government to have taken in American history. Sen. Warren's so-called responsible capitalism attacks the returns that wealth gives its owners, most of whom are present or near retirees. This undermining of capitalism would have hijacked Americans' wealth to earn many new masters who, unlike shareholders, do not have their life savings at stake in the collectivized companies.
After dividing the retirement earnings of eight ways to serve the politically favored, the Warren Charter continues to require "no less than 2/5 of the directors of an American corporation be elected by the employees." mandate to share profits with seven other interest groups and 40% of the board elected by non-investors, does anyone doubt that investors' wealth would be quickly consumed?
At best, every US company with gross revenues above $ 1 billion will suddenly be forced to act as a not-for-profit. But unlike legally recognized benefits, companies will be redirected to several competing purposes. A new US corporate office would decide – and lawyers would sue to decide – whether those interests were satisfied, and only then would retirees receive the remaining crumbs. Only in late Warren's socialist heaven would workers continue to sweat and sacrifice while their rewards go to publicly favored groups.
It is the fiduciary responsibility of any investment adviser, pension fund, 401 (k), IRA and life insurance company to tell clients what will happen to their investments under Sen-Warren's expense. Her plan would destroy the revenue-generating capacity of every major company in America and decimate the market value of the process.
If the bill was passed, pension plans and investors could try to sell their shares and find new investments where their money would still work for them. They could sell their shares in the large companies that are subject to late. Warren's dispossession and buy in smaller companies with receipts below the $ 1 billion threshold, or look for investment abroad.
The problem is that everyone else would try to do the same. Investments built over a lifetime would be sold in a fire sale, with limited options purchased in panic purchases. Although no econometric model could provide a reliable estimate of the wealth, no savvy observers could doubt that an economic disaster would follow such a policy. "Responsible capitalism" would hit the current and near-retired first and hardest, followed by American workers and the rest of the economy.
Sen. Warren wanted to roll back the financial information that gave us private property and financial freedom, and threw us back into the communal world in the dark ages. Like the village, guild, church and crown of yore, government-controlled special interests would once again be allowed to extort labor and thrift. When capital is no longer protected as private property and is instead redefined as a common asset, prosperity and freedom will be the greatest casualties.
Socialism always destroys wealth; it does not distribute it. Unfortunately, this great truth is far from self-evident. Whether the current and the near-retired will rise up and fight for retirement savings will effectively measure the survival instinct of our country, and our willingness to preserve the economic system that built it.
Mr. Gramm, a former chairman of the Senate Banking Committee, is a guest fellow at the American Enterprise Institute. Mr. Solon is a partner in U.S. Policy Metrics.
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