Unbelievable. Five years after Enron and WorldCom went down, taking not only thousands of jobs but most of their employees' retirement savings with them, we are hearing the same old song: Bear Stearns 401(k)s were crammed full of company stock. And they're not alone:
- One-third of employees eligible to invest in company stock through their 401(k) have more than 20% in their company's stock.
- Almost 9% of them have more than 80% invested in their employer.
- For employees in their 60s, almost 20% hold half of their 401(k) savings in company stock.
What is the proper amount of your investment portfolio to have in your company's stock? In my opinion, zero. Your paycheck and your retirement savings should not all depend on one firm. It sure as hell shouldn't be 20%, much less 80%. But your company is in great shape, you say? Bear Stearns was trading at $150 not very long ago. It's fine to hold a little company stock, but it shouldn't be the funding mechanism for anything crucial, like the food you're planning to consume in old age.
The catch is, if pension contributions are not largely invested in the company that they work for, it also means the company has much less interest in contributing.
Net Net: less lucrative pensions.
You can't have your cake and eat it too.
Having said that, that is why a lot of people like Delta pilots bailed on early retirement just before Delta went bust.
The larger question: Employer pensions were a great idea when companies were large, stable, and likely to have a long life span. Is it still a good idea when most companies are unlikely to be around in 40 years?
Even larger question: Rich and lush pensions from the public sector (where someone can work sometimes for as few as 10 years for an organization because they get 'credit' for having been in the military, etc.) that are defined benefit. Are they still a good idea and affordable when economies around those public sectors (like the towns, counties, states, dwindle), and when average life expectancy is growing by the year, and when local economies are flat or contracting?
Huge question: Should people be allowed to double, triple, quadruple dip by collecting multiple pensions from different plans?
This may be one of the biggest injustices in the American economy --- the tyranny of vested interests manipulating pensions.
I've made it a point not to add any of my employer's stock to my 401K. It just isn't worth the risk, however small the risk may be.
Couldn't agree more but you have to realize that in some 401K plans the company match is in the form of company stock and doesn't vest immediately. Also, lots of bonuses are in company stock with, say, five year periods when you can't dump it. So, yeah, a Bear Stearns employee could have $500,000 in comapny stock but there might be little she could do to cash out.
(I've got some $50,000 in my company stock that I can't get rid of unless I quit or retire.)
Megan: This article suggests that Bear Stearns did not provide any of its stock through its 401(k) program. Rather, all of the stock was offered through an ESOP and stock option/stock purchase plans.
Also, could not find any 11-k filing on Edgar (public companies must make these filings for 401(k) stock contributions if they are offering newly issued shares to the plan. Since that is simpler than having the plan always buy shares on the open market, employers nearly always make this filing when offering company stock to a 401(k) plan).
This suggests that the economist ... and Suzie Orman ... are repeating a canard.
Get on the phone with one of your Bear Stearns friends and ask about whether their 401(k) did or did not offer Bear Stearns stock.
D's point about municipal pensions is a great one. This is really a wealth transfer from middle class private sector workers to public sector workers. If I were a guidance counselor in a high school, I'd tell every kid who didn't have either the academic chops to go to an elite college or the unquenchable zeal to be an entrepreneur to enlist in the military for two years and then apply for every police, firefighter, DPW, etc. job he could find. When you take into account the present value of pension benefits municipal workers often start collecting in their fifties, why be an expendable cubicle drone in the private sector?
You are right, oh right. After more than 40 years in the investment business, I have seen far too many horrible examples. Having said that, efforts to convince individuals that they are overconcentrated in their own company stock range from the futile to the merely inefective.Only the rare success makes the effort worthwhile. Effective risk management is often a thankless task.
I don't see the harm in having some company stock. As much as you would have in it if it weren't your home company.
All those other companies are just as likely to tank as yours in the abstract.
The larger question: Employer pensions were a great idea when companies were large, stable, and likely to have a long life span.
Remember that "likeliness" is an adjective about the state of mind of the people regarding that firm, not about the firm. They were only "likely" to have a long span if they could count on the government to keep out competition so that the firm could earn monopoly rents sufficient to pay an unfunded plan.
Is it still a good idea when most companies are unlikely to be around in 40 years?
Absolutely, it can be, so long as the pension is funded, as ALL pensions should be funded, in advance through a separate trust. Each time an employee's pension value goes up, so should the value of the trust, on a running-average, termination basis.
Of course, on this (honest) funding standard, pensions would be unfeasible to fund.
Even larger question: Rich and lush pensions from the public sector (where someone can work sometimes for as few as 10 years for an organization because they get 'credit' for having been in the military, etc.) that are defined benefit. Are they still a good idea and affordable when economies around those public sectors (like the towns, counties, states, dwindle), and when average life expectancy is growing by the year, and when local economies are flat or contracting?
Same as above: fund them in advance, and there is no problem except the life expectancy issue. IMHO, any plan without stipulation of order-of-payment in the event that funds are insufficient is necessarily fraudulent. Plans should hold hedges against gains in life expectancy, and tell people what will happen to their benefits if actuaries underestimate life expectancy.
Huge question: Should people be allowed to double, triple, quadruple dip by collecting multiple pensions from different plans?
Yes. I don't see what the problem is. That's like asking, "Should people be allowed to earn money from second and third jobs?"
What is the proper amount of your investment portfolio to have in your company's stock? In my opinion, zero.
To be pedantic, to properly diversify your portfolio, you should probably either be short your employer's stock, or at least buy put options on it. Unfortunately, neither of those are really workable for long-range investing.
Toxic - the reason for owning zero company stock is that you already are heavily invested in whatever company you work for, as your job is there. So if you have stock in the company you work for and it goes bankrupt you lose both your job and your stock, which makes the overall risk far higher.
Of course if you have headhunters beating down your door and are just about to accept a job offer from another company, then this doesn't apply to you.
Toxic,
I agree, and I'm sure so does Megan. Her statement works better if you replace "your company's stock" with "any single company stock"
She has even told us before that she believes mutual funds to be too risky/unreliable/unable-to-beat-the-market. Index funds all the way, she advises.
I think employees should buy company stock, particularly when the company offers a discount or options along with it, as many do. If you accumulate enough company stock, it's almost as if you are working for yourself. In this way, ESOPs and other programs that increase employee stock ownership are effective in aligning the interests of employees and employers. Owning company stock also gives you a hedge against your company getting bought out (not, of course, bought under like in Bear Stearns's case) and you getting laid off as a consequence.
Bear in mind, too, that most workers will work at a half dozen companies or more in their career, so they will have company stock accumulated from several different employers (although these may all be in the same sector).
Certainly one shouldn't put all of his money in his employer's stock, but the other extreme of holding none of it makes little sense either.
Public section pension plans are almost impossible to change until it is too late. In Pittsburgh, they are raising taxes & cutting services to pay those pensions and haven't even been able to up the employee contribution from new hires, let alone the existing employees. And, this is in a city that is essentially bankrupt.
I don't see the harm in having some company stock. As much as you would have in it if it weren't your home company.
Toxic, no, you should definitely have less in your own company stock if you're an average worker at a large company.It's simple hedging. If your company goes bankrupt or suffers massive losses, you're likely lose your job. No reason to compound that problem with massive investment losses.
In this way, ESOPs and other programs that increase employee stock ownership are effective in aligning the interests of employees and employers.
But as an average employee at a large company where the employee's efforts are only an incredibly small portion of the company's success, I doubt that it's too effective at aligning interests. If I'm an engineer at giant defense contractor, my best efforts will only make a tiny marginal difference at best in the stock price. The case for executives and people at small private companies where their shares can be significant and their own efforts can affect the share price significantly is different.
The only case where it really makes sense is when the company offers a significant discount for company stock purchases, and even then one should diversify out as soon as it vests.
"But as an average employee at a large company where the employee's efforts are only an incredibly small portion of the company's success, I doubt that it's too effective at aligning interests."
You'd be surprised. It's a point of pride for a lot of average employees (e.g., at XOM, or at my local utility PEG, etc.), and it's been a profitable strategy for them to boot. Even if as individuals they may play a small part in their company's success, a lot of workers feel good owning part of their companies. It feels a lot better than sitting around thinking about how insignificant you are. To use an imperfect analogy (as all analogies are), your vote in November's election will be essentially meaningless, by itself, but I doubt you'd feel better if you didn't vote.
Partially right, partially not so right.
I believe that having a company stock fund as an investment option for rank and file workers is an ERISA lawsuit waiting to happen, and the company will probably deserve it.
But we all want employers to provide a match to 401k contributions, right?
Let's say Bear Stearns' employees exposure to their stock was through a match. Isn't a match in the form of company stock better than no match at all?
There are a lot of plan sponsors out there who would LOVE to jettison their 401k plans altogether, anyway - it's a headache and a liability to them.
I do believe that workers ought to be able to sell their vested company stock immediately, on the open market, if they so choose (though some companies may react by creating a side account that's not subject to those liquidation rules).
Maybe senior management should be REQUIRED to hold company stock. They might have a healthier appreciation of risk management.
But be careful what you wish for with calls for additional regulation. DB plans have largely gone the way of the DoDo bird; the same could happen with 401k plans, too - or employee matches, if we squeeze too hard. Not every company has cash to match with. Some of those may have equity to match with, and that's ok.
If you want to look at the details of the Bear Stearns plan, you can find their ERISA filing at www.freeerisa.com
Even if as individuals they may play a small part in their company's success, a lot of workers feel good owning part of their companies. It feels a lot better than sitting around thinking about how insignificant you are. To use an imperfect analogy (as all analogies are), your vote in November's election will be essentially meaningless, by itself, but I doubt you'd feel better if you didn't vote.
If it makes them feel good, fine. But at a practical level, the stock price has little direct lining up of incentives. One worker can do a lot to make her section or department profitable, which affects raises and layoffs and hiring locally, but not an entire 200,000 strong company. Pride of work, getting along with your co-workers (and a feeling of responsibility to them), affecting raises and performance reviews, keeping your job, and making your own unit more profitable are, I think, stronger motivations than the stock price of the entire company. One can take pride in the overall company and work towards its success without owning shares.
I work hard despite it being "essentially meaningless" to the company's stock price because, among other things, it makes me feel better about myself. But it does materially affect my raises and my job prospects. (The latter not just because I could be fired for doing poorly, but because my work could affect my 100 person department in a way that it does not the larger company, and we could fail to expand or have layoffs separately from the entire company if our department is not profitable.)
Bear Stearns did and does not offer its stock through its 401(k) program, only through an ESOP.
That noted, Megan is correct on the bigger issue of employees buying stock in their own company. It is irrational to buy too much and the holding should probably be less than the value of shares they hold in their major competitor.
"I believe that having a company stock fund as an investment option for rank and file workers is an ERISA lawsuit waiting to happen"
That would be interesting, considering that there's no law preventing a company from having an ESOP and no 401(k).
Considering that booms and busts often disproportionately affect few sectors (e.g. home builders, mortgagers now), I would think diversification should go further and avoid one's sector of employment.
Thaler and Goolsbee must be having a melancholy-tinged chuckle. Is this more evidence that we're all so irrational (or just plain bad at dealing with risk) that we need to be protected from our own failed instincts? (Like whether to have the option to sign in or to sign out of 401k's to start with.)
Should we feel sorry for Enron/Bear employees who put 20 or 80 percent of their pensions on Enron/Bear shares? There was plenty of advice out there to NOT do that. I certainly do NOT feel sorry about traders/analysts/executives etc who did it: they are financially savvy. Perhaps some employees who can not be expected to have known better? OK, I feel sorry. Which leads me to my modest policy proposal:
Some high-school course should work hard at teaching people a three-step lesson:
1. Out of each paycheck, first deal with expenditure needs; then with long-term savings; and only then, if you want to gamble, allocate a % of the remaining income to it. Stick to that % as an iron-max (and never as a min!)
2. Dealing in individual shares is gambling, no matter what, period.
Corollary: if your employer offers stock-purchase incentives, that is nothing but subsidized gambling (but gambling, nevertheless). You allocate accordingly, given the shift in relative returns shifting. But out of gambling money.
3. 401k = LONG term saving = BROAD index funds, where you can park the money and forget about it until retirement starts getting close.
funny that Salomon Brothers, a Partnership, never blew themselves up.
Hayek was right, Employees are a threat to Liberty.
The catch is, if pension contributions are not largely invested in the company that they work for, it also means the company has much less interest in contributing.
Why would the company care where its employees invested (from a purely economic standpoint, at least)?
At most, I could see a company having some kind of conflict of interest policy prohibiting investment (by senior managers, anyway) in its direct competitors.
But requiring the rank and file to invest in itself? Why?
Don’t believe one optimistic word from any public figure about the economy or humanity in general. They are all part of the problem. Its like a game of Monopoly. In America, the richest 1% now hold 1/2 OF ALL UNITED STATES WEALTH. Unlike ‘lesser’ estimates, this includes all stocks, bonds, cash, and material assets held by America’s richest 1%. Even that filthy pig Oprah acknowledged that it was at about 50% in 2006. Naturally, she put her own ‘humanitarian’ spin on it. Calling attention to her own ‘good will’. WHAT A DISGUSTING HYPOCRITE SLOB. THE RICHEST 1% HAVE LITERALLY MADE WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. Don’t fall for any of their ‘humanitarian’ CRAP. ITS A SHAM. THESE PEOPLE ARE CAUSING THE SAME PROBLEMS THEY PRETEND TO CARE ABOUT. Ask any professor of economics. Money does not grow on trees. The government can’t just print up more on a whim. At any given time, there is a relative limit to the wealth within ANY economy of ANY size. So when too much wealth accumulates at the top, the middle class slip further into debt and the lower class further into poverty. A similar rule applies worldwide. The world’s richest 1% now own over 40% of ALL WORLD WEALTH. This is EVEN AFTER you account for all of this ‘good will’ ‘humanitarian’ BS from celebrities and executives. ITS A SHAM. As they get richer and richer, less wealth is left circulating beneath them. This is the single greatest underlying cause for the current US recession. The middle class can no longer afford to sustain their share of the economy. Their wealth has been gradually transfered to the richest 1%. One way or another, we suffer because of their incredible greed. We are talking about TRILLIONS of dollars which have been transfered FROM US TO THEM. All over a period of about 27 years. Thats Reaganomics for you. The wealth does not ‘trickle down’ as we were told it would. It just accumulates at the top. Shrinking the middle class and expanding the lower class. Causing a domino effect of socio-economic problems. But the rich will never stop. They just keep getting richer. Leaving even less of the pie for the other 99% of us to share. At the same time, they throw back a few tax deductible crumbs and call themselves ‘humanitarians’. Cashing in on the PR and getting even richer the following year. IT CAN’T WORK THIS WAY. Their bogus efforts to make the world a better place can not possibly succeed. Any 'humanitarian' progress made in one area will be lost in another. EVERY SINGLE TIME. IT ABSOLUTELY CAN NOT WORK THIS WAY. This is going to end just like a game of Monopoly. The current US recession will drag on for years and lead into the worst US depression of all time. The richest 1% will live like royalty while the rest of us fight over jobs, food, and gasoline. So don’t fall for any of this PR CRAP from Hollywood, Pro Sports, and Wall Street PIGS. ITS A SHAM. Remember: They are filthy rich EVEN AFTER their tax deductible contributions. Greedy pigs. Now, we are headed for the worst economic and cultural crisis of all time. Crime, poverty, and suicide will skyrocket. SEND A “THANK YOU” NOTE TO YOUR FAVORITE MILLIONAIRE. ITS THEIR FAULT. I’m not discounting other factors like China, sub-prime, or gas prices. But all of those factors combined still pale in comparison to that HUGE transfer of wealth to the rich. Anyway, those other factors are all related and further aggrivated because of GREED. If it weren’t for the OBSCENE distribution of wealth within our country, there never would have been such a market for sub-prime to begin with. Which by the way, was another trick whipped up by greedy bankers and executives. IT MAKES THEM RICHER. The credit industry has been ENDORSED by people like Oprah Winfrey, Ellen DeGenerous, Dr Phil, and many other celebrities. IT MAKES THEM RICHER. Now, there are commercial ties between nearly every industry and every public figure. IT MAKES THEM RICHER. So don’t fall for their ‘good will’ BS. ITS A LIE. If you fall for it, then you’re a fool. If you see any real difference between the moral character of a celebrity, politician, attorney, or executive, then you’re a fool. No offense fellow citizens. But we have been mislead by nearly every public figure. WAKE UP PEOPLE. THEIR GOAL IS TO WIN THE GAME. The 1% club will always say or do whatever it takes to get as rich as possible. Without the slightest regard for anything or anyone but themselves. Reaganomics. Their idea. Loans from China. Their idea. NAFTA. Their idea. Outsourcing. Their idea. Sub-prime. Their idea. High energy prices. Their idea. Obscene health care charges. Their idea. The commercial lobbyist. Their idea. The multi-million dollar lawsuit. Their idea. The multi-million dollar endorsement deal. Their idea. $200 cell phone bills. Their idea. $200 basketball shoes. Their idea. $30 late fees. Their idea. $30 NSF fees. Their idea. $20 DVDs. Their idea. Subliminal advertising. Their idea. Brainwash plots on TV. Their idea. Vioxx, and Celebrex. Their idea. The MASSIVE campaign to turn every American into a brainwashed, credit card, pharmaceutical, love-sick, celebrity junkie. Their idea. All of the above shrink the middle class, concentrate the world’s wealth and resources, create a dominoe effect of socio-economic problems, and wreak havok on society. All of which have been CREATED AND ENDORSED by celebrities, athletes, executives, entrepreneurs, attorneys, and politicians. IT MAKES THEM RICHER. So don’t fall for any of their ‘good will’ ‘humanitarian’ BS. ITS A SHAM. NOTHING BUT TAX DEDUCTIBLE PR CRAP. In many cases, the 'charitable' contribution is almost entirely offset. Not to mention the opportunity to plug their name, image, product, and 'good will' all at once. IT MAKES THEM RICHER. These filthy pigs even have the nerve to throw a fit and spin up a misleading defense with regard to 'federal tax revenue'. ITS A SHAM. THEY SCREWED UP THE EQUATION TO BEGIN WITH. If the middle and lower classes had a greater share of the pie, they could easily cover a greater share of the federal tax revenue. They are held down in many ways because of greed. Wages remain stagnant for millions because the executives, celebrities, athletes, attorneys, and entrepreneurs, are paid millions. They over-sell, over-charge, under-pay, outsource, cut jobs, and benefits to increase their bottom line. As their profits rise, so do the stock values. Which are owned primarily by the richest 5%. As more United States wealth rises to the top, the middle and lower classes inevitably suffer. This reduces the potential tax reveue drawn from those brackets. At the same time, it wreaks havok on middle and lower class communities and increases the need for financial aid. Not to mention the spike in crime because of it. There is a dominoe effect to consider. IT CAN'T WORK THIS WAY. But our leaders refuse to acknowledge this. Instead they come up with one trick after another to milk the system and screw the majority. These decisions are heavily influensed by the 1% club. Every year, billions of federal tax dollars are diverted behind the scenes back to the rich and their respective industries. Loans from China have been necessary to compensate in part, for the red ink and multi-trillion dollar transfer of wealth to the rich. At the same time, the feds have been pushing more financial burden onto the states who push them lower onto the cities. Again, the hardship is felt more by the majority and less by the 1% club. The rich prefer to live in exclusive areas or upper class communities. They get the best of everything. Reliable city services, new schools, freshly paved roads, upscale parks, ect. The middle and lower class communities get little or nothing without a local tax increase. Which, they usually can't afford. So the red ink flows followed by service cuts and lay-offs. All because of the OBSCENE distribution of bottom line wealth in this country. So when people forgive the rich for their incredible greed and then praise them for paying a greater share of the FEDERAL income taxes, its like nails on a chalk board. I can not accept any theory that our economy would suffer in any way with a more reasonable distribution of wealth. Afterall, it was more reasonable 30 years ago. Before Reaganomics came along. Before GREED became such an epidemic. Before we had an army of over-paid executives, bankers, celebrities, athletes, attorneys, doctors, investors, entrepreneurs, developers, and sold-out politicians to kiss their asses. As a nation, we were in much better shape. Strong middle class, free and clear assets, lower crime rate, more widespread prosperity, stable job market, lower deficit, ect. Our economy as a whole was much more stable and prosperous for the majority. WITHOUT LOANS FROM CHINA. Now, we have a more obscene distribution of bottom line wealth than ever before. We have a sold-out government, crumbling infrastructure, energy crisis, home forclosure epidemic, 13 figure national deficit, and 12 figure annual shortfall. The cost of living is higher than ever before. Most people can't even afford basic health care. ALL BECAUSE OF GREED. I really don't blame the 2nd -5th percentiles in general. No economy could ever function without some reasonable scale of personal wealth and income. But it can't be allowed to run wild like a mad dog. ALBERT EINSTEIN TRIED TO MAKE PEOPLE UNDERSTAND. UNBRIDLED CAPITALISM ABSOLUTELY CAN NOT WORK. TOP HEAVY ECONOMIES ALWAYS COLLAPSE. Bottom line: The richest 1% will soon tank the largest economy in the world. It will be like nothing we’ve ever seen before. The American dream will be shattered. and thats just the beginning. Greed will eventually tank every major economy in the world. Causing millions to suffer and die. Oprah, Angelina, Brad, Bono, and Bill are not part of the solution. They are part of the problem. THERE IS NO SUCH THING AS A MULTI-MILLIONAIRE HUMANITARIAN. EXTREME WEALTH MAKES WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. WITHOUT WORLD PROSPERITY, THERE WILL NEVER BE WORLD PEACE OR ANYTHING EVEN CLOSE. GREED KILLS. IT WILL BE OUR DOWNFALL. Of course, the rich will throw a fit and call me a madman.. Of course, they will jump to small minded conclusions about 'jealousy', 'envy', or 'socialism'. Of course, their ignorant fans will do the same. You have to expect that. But I speak the truth. If you don’t believe me, then copy this entry and run it by any professor of economics or socio-economics. Then tell a friend. Call the local radio station. Re-post this entry or put it in your own words. Be one of the first to predict the worst economic and cultural crisis of all time and explain its cause. WE ARE IN BIG TROUBLE.
Don’t believe one optimistic word from any public figure about the economy or humanity in general. They are all part of the problem. Its like a game of Monopoly. In America, the richest 1% now hold 1/2 OF ALL UNITED STATES WEALTH. Unlike ‘lesser’ estimates, this includes all stocks, bonds, cash, and material assets held by America’s richest 1%. Even that filthy pig Oprah acknowledged that it was at about 50% in 2006. Naturally, she put her own ‘humanitarian’ spin on it. Calling attention to her own ‘good will’. WHAT A DISGUSTING HYPOCRITE SLOB. THE RICHEST 1% HAVE LITERALLY MADE WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. Don’t fall for any of their ‘humanitarian’ CRAP. ITS A SHAM. THESE PEOPLE ARE CAUSING THE SAME PROBLEMS THEY PRETEND TO CARE ABOUT. Ask any professor of economics. Money does not grow on trees. The government can’t just print up more on a whim. At any given time, there is a relative limit to the wealth within ANY economy of ANY size. So when too much wealth accumulates at the top, the middle class slip further into debt and the lower class further into poverty. A similar rule applies worldwide. The world’s richest 1% now own over 40% of ALL WORLD WEALTH. This is EVEN AFTER you account for all of this ‘good will’ ‘humanitarian’ BS from celebrities and executives. ITS A SHAM. As they get richer and richer, less wealth is left circulating beneath them. This is the single greatest underlying cause for the current US recession. The middle class can no longer afford to sustain their share of the economy. Their wealth has been gradually transfered to the richest 1%. One way or another, we suffer because of their incredible greed. We are talking about TRILLIONS of dollars which have been transfered FROM US TO THEM. All over a period of about 27 years. Thats Reaganomics for you. The wealth does not ‘trickle down’ as we were told it would. It just accumulates at the top. Shrinking the middle class and expanding the lower class. Causing a domino effect of socio-economic problems. But the rich will never stop. They just keep getting richer. Leaving even less of the pie for the other 99% of us to share. At the same time, they throw back a few tax deductible crumbs and call themselves ‘humanitarians’. Cashing in on the PR and getting even richer the following year. IT CAN’T WORK THIS WAY. Their bogus efforts to make the world a better place can not possibly succeed. Any 'humanitarian' progress made in one area will be lost in another. EVERY SINGLE TIME. IT ABSOLUTELY CAN NOT WORK THIS WAY. This is going to end just like a game of Monopoly. The current US recession will drag on for years and lead into the worst US depression of all time. The richest 1% will live like royalty while the rest of us fight over jobs, food, and gasoline. So don’t fall for any of this PR CRAP from Hollywood, Pro Sports, and Wall Street PIGS. ITS A SHAM. Remember: They are filthy rich EVEN AFTER their tax deductible contributions. Greedy pigs. Now, we are headed for the worst economic and cultural crisis of all time. Crime, poverty, and suicide will skyrocket. SEND A “THANK YOU” NOTE TO YOUR FAVORITE MILLIONAIRE. ITS THEIR FAULT. I’m not discounting other factors like China, sub-prime, or gas prices. But all of those factors combined still pale in comparison to that HUGE transfer of wealth to the rich. Anyway, those other factors are all related and further aggrivated because of GREED. If it weren’t for the OBSCENE distribution of wealth within our country, there never would have been such a market for sub-prime to begin with. Which by the way, was another trick whipped up by greedy bankers and executives. IT MAKES THEM RICHER. The credit industry has been ENDORSED by people like Oprah Winfrey, Ellen DeGenerous, Dr Phil, and many other celebrities. IT MAKES THEM RICHER. Now, there are commercial ties between nearly every industry and every public figure. IT MAKES THEM RICHER. So don’t fall for their ‘good will’ BS. ITS A LIE. If you fall for it, then you’re a fool. If you see any real difference between the moral character of a celebrity, politician, attorney, or executive, then you’re a fool. No offense fellow citizens. But we have been mislead by nearly every public figure. WAKE UP PEOPLE. THEIR GOAL IS TO WIN THE GAME. The 1% club will always say or do whatever it takes to get as rich as possible. Without the slightest regard for anything or anyone but themselves. Reaganomics. Their idea. Loans from China. Their idea. NAFTA. Their idea. Outsourcing. Their idea. Sub-prime. Their idea. High energy prices. Their idea. Obscene health care charges. Their idea. The commercial lobbyist. Their idea. The multi-million dollar lawsuit. Their idea. The multi-million dollar endorsement deal. Their idea. $200 cell phone bills. Their idea. $200 basketball shoes. Their idea. $30 late fees. Their idea. $30 NSF fees. Their idea. $20 DVDs. Their idea. Subliminal advertising. Their idea. Brainwash plots on TV. Their idea. Vioxx, and Celebrex. Their idea. The MASSIVE campaign to turn every American into a brainwashed, credit card, pharmaceutical, love-sick, celebrity junkie. Their idea. All of the above shrink the middle class, concentrate the world’s wealth and resources, create a dominoe effect of socio-economic problems, and wreak havok on society. All of which have been CREATED AND ENDORSED by celebrities, athletes, executives, entrepreneurs, attorneys, and politicians. IT MAKES THEM RICHER. So don’t fall for any of their ‘good will’ ‘humanitarian’ BS. ITS A SHAM. NOTHING BUT TAX DEDUCTIBLE PR CRAP. In many cases, the 'charitable' contribution is almost entirely offset. Not to mention the opportunity to plug their name, image, product, and 'good will' all at once. IT MAKES THEM RICHER. These filthy pigs even have the nerve to throw a fit and spin up a misleading defense with regard to 'federal tax revenue'. ITS A SHAM. THEY SCREWED UP THE EQUATION TO BEGIN WITH. If the middle and lower classes had a greater share of the pie, they could easily cover a greater share of the federal tax revenue. They are held down in many ways because of greed. Wages remain stagnant for millions because the executives, celebrities, athletes, attorneys, and entrepreneurs, are paid millions. They over-sell, over-charge, under-pay, outsource, cut jobs, and benefits to increase their bottom line. As their profits rise, so do the stock values. Which are owned primarily by the richest 5%. As more United States wealth rises to the top, the middle and lower classes inevitably suffer. This reduces the potential tax reveue drawn from those brackets. At the same time, it wreaks havok on middle and lower class communities and increases the need for financial aid. Not to mention the spike in crime because of it. There is a dominoe effect to consider. IT CAN'T WORK THIS WAY. But our leaders refuse to acknowledge this. Instead they come up with one trick after another to milk the system and screw the majority. These decisions are heavily influensed by the 1% club. Every year, billions of federal tax dollars are diverted behind the scenes back to the rich and their respective industries. Loans from China have been necessary to compensate in part, for the red ink and multi-trillion dollar transfer of wealth to the rich. At the same time, the feds have been pushing more financial burden onto the states who push them lower onto the cities. Again, the hardship is felt more by the majority and less by the 1% club. The rich prefer to live in exclusive areas or upper class communities. They get the best of everything. Reliable city services, new schools, freshly paved roads, upscale parks, ect. The middle and lower class communities get little or nothing without a local tax increase. Which, they usually can't afford. So the red ink flows followed by service cuts and lay-offs. All because of the OBSCENE distribution of bottom line wealth in this country. So when people forgive the rich for their incredible greed and then praise them for paying a greater share of the FEDERAL income taxes, its like nails on a chalk board. I can not accept any theory that our economy would suffer in any way with a more reasonable distribution of wealth. Afterall, it was more reasonable 30 years ago. Before Reaganomics came along. Before GREED became such an epidemic. Before we had an army of over-paid executives, bankers, celebrities, athletes, attorneys, doctors, investors, entrepreneurs, developers, and sold-out politicians to kiss their asses. As a nation, we were in much better shape. Strong middle class, free and clear assets, lower crime rate, more widespread prosperity, stable job market, lower deficit, ect. Our economy as a whole was much more stable and prosperous for the majority. WITHOUT LOANS FROM CHINA. Now, we have a more obscene distribution of bottom line wealth than ever before. We have a sold-out government, crumbling infrastructure, energy crisis, home forclosure epidemic, 13 figure national deficit, and 12 figure annual shortfall. The cost of living is higher than ever before. Most people can't even afford basic health care. ALL BECAUSE OF GREED. I really don't blame the 2nd -5th percentiles in general. No economy could ever function without some reasonable scale of personal wealth and income. But it can't be allowed to run wild like a mad dog. ALBERT EINSTEIN TRIED TO MAKE PEOPLE UNDERSTAND. UNBRIDLED CAPITALISM ABSOLUTELY CAN NOT WORK. TOP HEAVY ECONOMIES ALWAYS COLLAPSE. Bottom line: The richest 1% will soon tank the largest economy in the world. It will be like nothing we’ve ever seen before. The American dream will be shattered. and thats just the beginning. Greed will eventually tank every major economy in the world. Causing millions to suffer and die. Oprah, Angelina, Brad, Bono, and Bill are not part of the solution. They are part of the problem. THERE IS NO SUCH THING AS A MULTI-MILLIONAIRE HUMANITARIAN. EXTREME WEALTH MAKES WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. WITHOUT WORLD PROSPERITY, THERE WILL NEVER BE WORLD PEACE OR ANYTHING EVEN CLOSE. GREED KILLS. IT WILL BE OUR DOWNFALL. Of course, the rich will throw a fit and call me a madman.. Of course, they will jump to small minded conclusions about 'jealousy', 'envy', or 'socialism'. Of course, their ignorant fans will do the same. You have to expect that. But I speak the truth. If you don’t believe me, then copy this entry and run it by any professor of economics or socio-economics. Then tell a friend. Call the local radio station. Re-post this entry or put it in your own words. Be one of the first to predict the worst economic and cultural crisis of all time and explain its cause. WE ARE IN BIG TROUBLE.