President Obama made the first attempt at reining in financial advisers who peddle investment packages that benefit them at the expense of consumers. After heavy lobbying from insurance companies that market their interests over buyers', Congress honored its remit of a representative plutocracy by shooting down the proposal.
Late last year, President Biden renewed Obama's attempt. It's dead already, same assassins. The "populist" party awoke from its long policy slumber and went to work fighting for the multibillion-dollar industry of financial services, one of which is lavishly servicing Congress. Joining House Republicans and costly investment peddlers were two federal judges, one of whom, Jeremy Kernodle, is named in The Washington Post story. Care to guess who appointed him to the bench?
Like Obama's, Biden's proposal was simple, sensible, and needed: Insurance firms' financial advisers should operate as fiduciaries — those whose cardinal aim is the buyer's benefit, more so than the adviser's (through higher commissions and fees). "The effort primarily aims to protect the millions of Americans who leave their jobs, or otherwfise need to roll over their retirement savings, and opt for tax-advantaged accounts such as IRAs," writes the Post.
Here's a straightforward matter in which government can act as a force for good, saving investors in annuities alone "about $32.5 billion over the next 10 years," says the fiduciary firm of Morningstar.
House Republicans have a different view of government's worth — that being to render it worthless. "In July [they] took the first step toward using legislation to overturn the fiduciary rule," reports the Post.. Rep. Virginia Foxx, a respected innovator in Republican incoherence, said Biden's proposal would "eliminate options for working-class Americans, reduce their ability to retire and limit their access to financial advice."
How would sensible simplicity limit access to advice? No one knows. But that's the talking point from both Republicans and the financial services industry. The American Council of Life Insurers, National Association of Insurance and Financial Advisors, Insured Retirement Institute and National Association for Fixed Annuities issued a joint statement that's due for entry in the Annals of Historic Befuddlement:
“If allowed to take effect, this rule would deprive millions of consumers access to much needed retirement financial guidance and protected lifetime income products, replicating the considerable harm suffered under a similar 2016 DOL [Dept. of Labor] regulation vacated by a federal court in 2018. The stay of the effective date provides consumers with a needed reprieve from these devastating consequences."
Bill Sweeney, vice president for AARP's government affairs, offered some clarity on the mega-rich lobbyists' diplomatic dispatch: "What they’re saying is, the only way they can operate is by giving you advice that is not in your best interest."
Mr. Sweeney's analysis applies to more than just insurance companies engaged in the profitable anarchy of screwing investors. It's the spot-on definition of the "populists" in control of "The People's House" — the Republican Party, whose members fit Voltaire's three-part takedown of the Holy Roman Empire: they're neither populists, nor people-minded, nor republican.
Makes you want to stuff whatever money you have for retirement into a mattress.
Posted by: Anne J | August 13, 2024 at 12:49 PM