What about those collapses? Seems to me they came on fairly suddenly.

Vanguard did a study of the ACTUAL returns on investments for individuals. Turns out individual investors are so bad, that during the entire 1982-2000 bull market their average returns were 2.7% annually! People would've done better parking their money in CD's.

I've seen studies where pensions also outperform 401k's by a wide margin. I didn't bother to put that in this diary though. I guess I should have because when I cross-posted this to DKos it went over like a lead balloon.
The overwhelming opinion to this diary was negative, even hostile. It's sort of like when I started posting diaries that gave a negative outlook to the real estate futures back in 2005. The sheeple were fully invested in real estate and they didn't want to hear that they may have made a mistake. Same goes for 401k's.

My real fear of 401k's I didn't bother to put in this diary because it sounds a little paranoid - it's the Argentina scenario.

Argentina in 2001, like America today, had a huge current account deficit, overvalued currency, and no industrial base.
When they defaulted on their debts they lost access to borrowing money, so the Argentinian government looked around for any large pool of money they could get their hands on. That money was the retirement savings of the middle class. They seized that money and forced it into government bonds - so it wasn't technically theft.
However, the currency lost 70% of its value in a matter of months. Thus people's life savings were wiped out.

Will this happen in America? Probably not, but I can't say for certain. And since 401k's are so illiquid (do you really want to quit a good job just to get at it and pay a 10% penalty?) that would be the first place I suspect a government would look.

Agree with Bob Oak's comment re privatising Social Security. And of course, the same baby boomer selling pressure will pressure the financial markets at large, not just via their 4-1k withdrawals.

Also, Vanguard did a study of the ACTUAL returns on investments for individuals. Turns out individual investors are so bad, that during the entire 1982-2000 bull market their average returns were 2.7% annually! People would've done better parking their money in CD's. Here's the link"

The returns incurred by the average equity fund investor since 1984 have averaged just 2.7% per year, a shocking shortfall to the 9.3% return earned by the average fund. The result is that the average fund investor has earned less than one-quarter of the stock market’s 12.2% annual return. Compounding these annual returns over the 1984-2002 period presents a dramatic picture of the plight of the typical mutual-fund investor: As the chart nearby shows, $1,000 invested at the outset would have produced a profit of $7,910 in the stock market itself, a profit of $4,420 for the average equity fund, and a profit of just $660 for the average equity-fund investor.

P.S. Midtowng, I think you publish under a different handle over at dK. Glad you've decided to crosspost here. Welcome aboard!

I'd say unions are probably the #1 thing that has increases wages for all, worker rights for all, jobs. Their strength was from 1934 to the 1970's when active attempts to union bust at every level have gone on.

So, don't throw the baby out with the bath water on this one.

You know the SEIU split from the AFL-CIO and this might be one of the reasons. Now in the SEIU case I am seeing more and more dissent like the above and certainly their pushing comprehensive immigration reform bills, loaded, positively loaded with every guest worker Visas imaginable, across the occupational spectrum would have decimated working America if passed.

Just so you know the AFL-CIO opposed those bills.

(yes they are both for "amnesty" but it's becoming more evident to me at least the AFL-CIO is paying attention to their members, wages, job security with regard to this policy area).

Why is it Colbert's comedy makes more economic sense than most news shows? Has a reference to Jim Cramer in this clip.

Basically Paulson in an obscure 218 report is not going to have any more regulation of the financial sector.

they lost their tax base to do anything about it, so they are just sitting there, turning into crack/meth houses, rat infestations and so on.

I would prefer they turn them into public housing for people in need. There are millions of homeless out there.

I posted it in the forum and I agree and yeah, let's make it the front page. All of that very hard work, trying to elect representatives actually interested in representing the American people and this is what we get and such an obvious royal screw job.

And everyone wonders why the Obama-Clinton split is in essence, 50-50. Well trying to yank out an epsilon of policy that just might be in the national interest, working America's interest when it's like looking for a needle in a haystack is a very tough call!

I feel your pain I try to keep emotionalism off of here normally but in this case I just wanted to scream.

Sell out bastards.

Thanks for the reply, Weaver. I understand what you're saying about labor costs being retarded in developing countries. There is some element of truth to what you're saying.

However, when we examine our trade data closely, we find that, of the top twenty per capita trade deficits in manufactured goods, only two of the top ten deficits are with nations with per capita purchasing power parity less than $20,000 per person. Only seven of the top twenty deficits have purchasing power parity less than $20,000. In other words, our worst per capita deficits tend to be with rather wealthy nations - Ireland, Japan, Taiwan, Switzerland, Malaysia, Germany, Austria, Denmark, Mexico, Korea and Italy. (Yes, Mexico's per capita purchasing power parity is $23,600.)

However, like I said in the original post, 18 of the top 20 deficits are with nations much more densely populated than our own. Clearly, population density plays a much more dominant role in driving our trade deficit. While labor cost can be an initial draw to lure away manufacturing jobs and establish a trade deficit, the deficit doesn't reverse as the workers earn more money. Take Japan for example. Decades ago their workers earned very little. Today, Japan is one of the wealthiest countries on earth, yet we have a per capita trade deficit in manufactured goods with them that is more than four times worse than our deficit with China.

Ricardo's theory may work when applied to nations of roughly equal population density, but it completely breaks down when attempting to trade freely with nations whose markets are stunted by over-population.

Pete Murphy
Author, Five Short Blasts

A sudden increase in jobless claims to ~400,000 is one of the hallmark signs of the onset of recession.