Hypocrisy? Nah.
The AARP claims that privatization is a bad thing.
Call it what you want-"privatization," "personalization," "carve-outs," "private accounts," or "personal accounts"-the fact is that this would hurt the financial health of Social Security and poses a threat to the retirement security of millions of Americans and their families. (Emphasis added.)The threat, of course, comes from the inherent scary risks in the stock market, as they take care to inform us:
Can't I do better by investing on my own?Hm.Maybe, but maybe not. Market averages are just that-averages. If you put one foot in boiling water and the other in ice-water, on average the water is comfortable. The reality, of course, is very different! Personal accounts come with a host of risks. The majority of mutual funds under-perform the market average. The stock market goes down as well as up, and sometimes it stays down for quite awhile. Many retirees who thought they were set financially are having to cut their budgets dramatically or even return to work because the value of their portfolios has declined significantly over the past few years. (Emphasis added again.)
So if stocks and mutual funds so risky that the AARP feels compelled to warn its members against them, then what the hell is it doing advertising and taking a cut from selling its members mutual funds? James K. Glassman calls bullshit.
[The AARP] says that stock and bond investing is like playing a slot machine at the same time it promotes stock and bond investing by selling 38 mutual funds to its members and taking a cut from each sale. ...Freaking demagogues. They don't want to protect their members; they want to control them.AARP Services, Inc., the lucrative business arm of the AARP, entered into a deal with Scudder Investments to sell mutual funds to its members as part of a special affinity program. According to a prospectus, Scudder pays AARP an annual fee for the use of its trademark that ranges from .05 percent to .07 percent of assets. That can come to a lot of money. One fund alone, Scudder Growth & Income AARP, manages $5 billion.
The hypocrisy is breathtaking.
Posted by Matt at March 10, 2005 5:21 PM
