Obama Wants to Take Care of Your Money…Like he’s so good at it?
You’ve got a 401K so you’re not in the same boat as the public employees whose retirement funds are going to go bust in Illinois and California for starters. You’ve been responsible and saved for your retirement. You’re a schmuck. At least that’s what Barack Obama and his Department of Socialist Labor think.
We’re from the government and we’re here to help.
The Department of Labor has a thing called a “Fiduciary Rule.” That means they will force financial advisors to act in the best interests of their clients. Now that may not sound so bad, but keep in mind that the Department of Labor – currently a bunch of far left Obama socialists – are going to decide what is in your best interest. Guess what? Your best interest is going to collide with the best interest of the Obama administration.
Here’s the bottom line from the Wall St. Journal.
What Labor doesn’t say is that the rule carries such enormous potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts. Middle-income investors may be forced to look elsewhere for financial advice even as Team Obama is enabling a raft of new government-run competitors for retirement savings. This is no coincidence.
Labor’s new rule will start biting in January as the President is leaving office. Under the rule, financial firms advising workers moving money out of company 401(k) plans into Individual Retirement Accounts will have to follow the new higher standards.
Again, what’s wrong with higher standards for investments? Especially retirement investments? After all, the Department of Labor will apply those standards to everyone, right?
But Labor has already proposed waivers from the federal Erisa law so new state-run retirement plans don’t have the same regulatory burden as private employers do.
Keep in mind that financial investment firms are already the most regulated group of people in the nation. This just adds to the regulatory burden and drives the point that bureaucrats in Washington know better how to help you prepare for your retirement than you do.
Keep in mind, the same people who want to control your investments have driven the Social Security and Medicare programs into the red to the tune of about $107 trillion in unfunded future benefits. That’s almost six times the current national debt of about $20 trillion.
As the Journal notes, the only sure thing that will come of this is very low returns for private investors. Don’t be surprised if federal regulators find a way to protect the public investors who have driven places like Detroit, Chicago, California, and Illinois into a deep hole. If those people were private investors the SEC would have them in prison. But hey, they’re “public servants.”
This program is so bad that the Department of Labor is actively working to chase away the people who are actually charged with regulating investments, the Securities and Exchange Commission.
Tom Perez, the Secretary of Labor, is telling anybody who will listen that they are working closely with the SEC and the Treasury Department. In fact, according to the Wall St. Journal, Senator Ron Johnson did some digging into agency email (there’s THAT word again) and discovered an official from the Labor Department telling an SEC official, “we have now gone far beyond the point where your input was helpful to me.” In other words, “shut the hell up.”
Word to the wise, don’t plan on retiring.