“Eighty-seven percent of upper-income Americans -- those making $75,000 or more annually -- own stocks, as do 83% of postgraduates and 73% of college graduates.”
Overall a little over 50% of Americans are invested . . .
Absolutely true! And I think this is a fabulous idea.
Back in 1963 I ran into a couple of Soviet graduate students in economics wandering the campus of Cornell University, where my father was taking his Ph.D. in Business Administration. Calling them "graduate students" was probably giving them short shrift, because each of them already had a Ph.D. back in the old USSR, but they were charming and smart and they had a very different point of view on things than anybody I knew, so I brought them home for dinner and conversation with the family.
They were indeed shocked to learn that so many ordinary folks were invested in the stock exchange; it wasn't common knowledge in the Soviet Union, not even among party members, which both our visitors in fact were. Dad took them for a visit to the local supermarket — in retrospect, a bit of a patronizing thing to do — and showed them the variety of options available. They were impressed. He even showed them the dog food section, the canned dog food — they didn't see the need for such a thing in the soviet union at the time — and then the monster-sized fifty pound bags.
The senior soviet economist looked at the bags, looked at dad, looked at the bags again and said in one of the driest comments I've ever heard, "Oh," he said, with the pronounced Russian accent, "for parties!"
We ran into them again a few times over the next year or two; both were dear guys. In conversation, one of them acknowledged that he himself would have liked to own his own private car. I'm afraid it might have gotten him in trouble with the other. I hope not.
But I'm afraid, in our own eagerness to sell our own system to them, we might have misrepresented it slightly. The number of people who own stock is right, though I don't think that they own it because they've bought it themselves. I think a lot of them have it because they are members of a retirement program that has invested in the stock market for them, it has often done a pretty good job of it. Technically these folks own stock, but to suggest they have any actual competency at the market is a gross exaggeration. I know I don't.
And there are people who are extremely interested in getting their hands on the money of people who can be talked into giving it to them to invest.
While there are loads of wonderful, ethical and competent folks in the industry, there are also a fair number of people who are not and who would be thrilled to tell you what to do with your money. During times when the market is doing well, it seems to any fool can make a million bucks by sneezing.
During times when the economy is tanking, the reality of the situation becomes a bit more starkly drawn. For folks with much investing experience, it is clear that the hype about what happens even during boom times has been more than slightly misrepresented, and that some skill is needed in order to even break even, let alone to do well. This is not a skill that I have or even pretend to have.
It is not a skill that many investors have either.
This would be the time that I would gently remind anybody who's read this far of the Republican plan to dismantle the social security system and turn the money over to you, the private investor, to double, triple and quadruple the shabby returns that social security offers you as return on your hard earned money. I would ask you, humbly, what would have happened to you and your social security supplemental retirement funds if they'd been taken out of social security in the year 2000 and if you'd put them into the market at that point, perhaps into the hot computer stocks at that time. Where was the market then, and where is it now? And what do you think your money at that time would be worth today if you'd followed the Republican advice?
If you'd been a particularly lucky insider, perhaps you'd have done well, of course.
Would you have been one of them?
Or do you think that you'd have been smarter to use money that would not have been in a social security account to make speculative investments of these sorts, in retrospect?
Is there some reason for regular folks to be a little bit miffed with the way people are running wall street and the banks and the investment houses. I'm not waving any sign around, myself, but I believe we have not been doing a great job in policing the antics there. How many people were charged and tried in the Savings and Loan scandals, and how many, in comparison, were investigated and charged in this latest round of economic woe. How many investigators were assigned in one case, and how many were assigned in the other?
If you wonder about upset about Wall Street, then it would seem to me that the answers to those questions might offer some answers, if, in fact, there is any interest in getting answers before calling names and setting up the gallows begins. I haven't noticed any, myself.