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Friday, August 27, 2010

The Myth of the "Conservative" politician

They abhor "wealth redistribution". Unless it is from you to them, which has been the case since the Reagan borrow-and-spend years, accelerated by Clinton and blasted into outer space by GW Bush & his Congressional toadies.

They advocate fiscal restraint in government. Unless it takes benefits away from their owners, I mean, campaign contributors.

They hate taxes. Unless someone else pays them.

They decry government regulations. Unless such regulations give them unmerited dominance in the marketplace or squash their competitors.

They advocate a free market. Unless the market is sending their corporate leash-holders the message that their product or service is no longer needed.

They are the models & purveyors of morality.
Unless doing the right thing would harm their re-election prospects.

They want freedom for all. Unless you're the wrong color, sex, sexual orientation, religion, economic strata, nationality, or any of dozens of irrelevant characteristics.

Tuesday, August 10, 2010

What's a "Fiduciary"?

Even though I disagree with most of Forbes' editorials, Neil Weinberg had a mostly excellent article in the August 9th issue. He begins,
"Everybody hates Wall Street and it's easy to see why. While one in six workers can't find a job, investment banks are hiring thousands. Goldman Sachs Chief Lloyd Blankfein recently bought an apartment on New York City's Central Park West for $26 million-in cash. How are you doing with your mortgage payments?"
He goes on to say that, after the industry wide $700 billion taxpayer bailout, New York City's financial sector awarded itself $20 billion in bonuses, an average of $124,000 for each banker, analyst & secretary. BONUSES, not wages. Bonuses. He adds, "Say, how is your 401(k) holding up?"
But here is where I really agree with Mr. Weinberg: he says it's our own fault for not standing up and insisting on real reform, for not holding our Congressional representatives accountable to us.
For example, initial versions of the recently passed financial reform bill required "fiduciary" standards for all financial advisers, including stockbrokers. "Fiduciary" means the adviser must put the client's interests above his own. That provision didn't survive, after heavy lobbying from the industry. Brokers can continue offering expensive crap that makes them the most money as long as we're dumb enough to keep buying it.
This, too, Weinberg places squarely in our own laps: Why would we continue dealing with people we know don't have our best interests at heart? Why not deal only with true fiduciaries, such as RIAs (registered investment advisers, like me)?