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Tags: elizabeth warren | democrat | retirement accounts

Elizabeth Warren Wants to Devalue Your Retirement Account

Elizabeth Warren Wants to Devalue Your Retirement Account
Democratic presidential candidate, Sen. Elizabeth Warren (D-MA) speaks at the Polk County Democrats' Steak Fry on September 21, 2019 in Des Moines, Iowa. (Scott Olson/Getty Images)

Michael Dorstewitz By Monday, 23 September 2019 12:19 PM EDT Current | Bio | Archive

Sen. Elizabeth Warren, the Massachusetts Democrat who’s also a top-tier presidential hopeful, revealed that it’s not just the wealthy she has her eyes set on — she also aims to reduce the value of everyone’s employee retirement account.

In a scheme she calls “Empowering Workers Through Accountable Capitalism,” she proposes that large corporations — which she defines as those having greater than $1 billion in annual revenue — should be chartered by the federal government rather than by the states.

She would also mandate that the employees of such corporations elect 40 percent of their board of directors. The scheme is based on a failed bill she introduced in the Senate last year.

Warren’s proposal would further require the board to not merely act in the best interests of its shareholders, but also in the best interest of a laundry list of other entities.

Elizabeth Bauer reported in Forbes that those additional interests would include “employees, suppliers, customers, the local communities where the companies locations are based, and others, with the fundamental premise that such a corporation ‘shall have the purpose of creating a general public benefit.’”

Stated differently, Warren aims to turn corporate America into a new army of social justice warriors, fighting for truth, justice, and the American way — as defined by Warren.

That ignores the true “fundamental purpose” of any business entity, which is to make a profit for its owners. That’s true whether the business is a corporation, a partnership, or a sole proprietorship. Businesses can’t long survive without profit as the No. 1 objective.

Matthew Yglesias analyzed Warren’s 2018 proposal for Vox, in a piece headlined “Elizabeth Warren has a plan to save capitalism,” and observed that it really wasn’t all that new — similar schemes are mandated by several European countries, including Germany.

He concluded that under such a proposal, “share prices could fall by 25 percent,” and that’s where retirement plan devaluation comes into play.

Retirement plans, whether they’re IRAs, 401(K)s, or pension plans offered by an employee’s company or labor union, invest in large part in corporate stock. Bauer, who’s a Chicago-based actuary and self-described nerd, observed in her Forbes piece that “50 percent of U.S.-owned U.S. equities are owned within retirement funds.”

That fact didn’t appear to trouble Yglesias, however. He believed that “for the vast majority of people who earn the majority of their income by working for wages, cheaper stock would be offset by higher pay and more rights at work.”

But he ignores the fact that most employees don’t work for the nation’s largest corporations — especially those with greater than $1 billion in annual receipts. The Small Business Administration reported that as of 2006, about 51 percent of the private, non-farm U.S. workforce worked for small businesses — those with fewer than 500 employees.

Warren’s proposal is neither about elevating the lot of the American worker nor improving corporate responsibility. It’s about removing power from corporate boards and transferring it to the federal government through greater oversight. It’s ultimately about giving government more control over American lives.

Many grand schemes have similar ulterior motives. Rep. Alexandria Ocasio-Cortez’s chief of staff admitted in July that the New York Democrat’s massive, multi-trillion dollar Green New Deal had little to do with the environment. It was instead more of a “how-do-you-change-the-entire economy thing.” It was about moving power from the private sector to the public sector.

Even though Warren’s proposals — including “free” college education and Medicare for All — are far removed from the mainstream, she recently surged ahead of national Democratic frontrunner and former Vice President Joe Biden with Iowa voters. A CNN/Des Moines Register/MediaCom poll released Saturday had Warren at a 22 percent favorability as compared to Biden’s 20 percent.

However, voters are beginning to see through the Democratic Party’s smoke and mirrors. An NBC poll that was also released over the weekend found that voters were generally more enthusiastic about re-electing President Donald Trump than they were about any of the Democratic hopefuls. This was despite the fact that most voters find the president to be generally unlikeable.

In January, Warren announced she was dissatisfied with merely taxing income, so she proposed a tax on wealth, targeting the top 0.1 percent of households — those that provide the very jobs for the rest of us.

With this latest insult she’s attacking the wealth of ordinary American workers and retirees. And by devaluating everything they’d worked for to provide for their own futures, she would make them all the more dependent on the government for their survival.

It’s about power and control ... and a sprinkling of social justice.

Michael Dorstewitz is a retired lawyer and has been a frequent contributor to BizPac Review and Liberty Unyielding. He is also a former U.S. Merchant Marine officer and an enthusiastic Second Amendment supporter, who can often be found honing his skills at the range. To read more of his reports — Click Hee Now.

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Sen. Elizabeth Warren, the Massachusetts Democrat who’s also a top-tier presidential hopeful, revealed that it’s not just the wealthy she has her eyes set on — she also aims to reduce the value of everyone’s employee retirement account.
elizabeth warren, democrat, retirement accounts
Monday, 23 September 2019 12:19 PM
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