Not-a-Lemming

Never run with the crowd. They're probably headed over a cliff.

The Return of Feudalism

They say things come to you in the shower. That doesn’t usually happen with me. More often, during the act of climbing into bed. Then I have to get up and write the idea down, for experience has taught me if I don’t write it down, no matter how Earth-shattering the thought, it will be gone the next morning. But this morning while I was shaving a light bulb went off.

 

There used to be something called a ‘Retirement Plan.’ You’d go to work for a company and they would begin a retirement plan. Basically they’d put a little money aside each month and when you were old and gray, they’d start siphoning it back to you. It would come agonizingly slow but at least it was there. Sort of like serfdom in the old Feudal systems of Europe. In exchange for work, the Lord provides care and protection.

 

But retirement plans became expensive. And people clamored about not having any personal control over ‘their’ money. Companies took the opportunity to eliminate the costly retirement plans in favor of giving executives larger bonuses. But our government, always looking out for the little guy, said there had to be something for the workers. (They must have known even then that Social Security wasn’t going to be there.) So they came up with the 401K. You have the option to place a portion of your income, pre-tax, into an investment vehicle over which you have ‘control.’ Some companies even put money in there for you. How nice. It can then grow with the market. Sounds good on paper. Or does it?

 

Think about what’s actually going on here. The portion of 401K provided by your employer isn’t a gift. It is money that could have just as well come to you in the form of compensation. Sort of like FICA which the government takes for your retirement plan. You pay 7.5% and your employer picks up the other 7.5%. Of course they don’t ‘pick it up.’ They pull it out of funds you earned for a total of 15%. So 15% of your income goes to FICA retirement. Then your company, or you, puts some money into your 401K, in my case 15% for your, uh, retirement. That’s 30% of my income for retirement. Keep in mind that all this cash is flowing monthly into the stock market, continuously, like a river. Even now.

 

I can’t get to any of this - my - money right now. The Social Security System has no ‘fund’ so there’s nothing there to get. And my 401K isn’t available until I’m too old to use it. I can take it out but I pay a huge penalty, close to half. So it isn’t available to use in my productive life for things like, starting a business, paying for college, or stimulating the economy. So while you can’t use your money to grow your life, there are others who can use your money to grow their lives. This may seem like swindling, but this system was set up by laws.

 

Yes, you heard me right. While your income isn’t available to you, it is made available to other private citizens in a process protected by U.S. law. Consider the following argument.

 

Keeping your 401K in a ‘safe’ money market account produces virtually no growth so isn’t a viable retirement plan. So you move it into mutual funds. Mutual funds then make the money available to companies to use as investment capital through the purchase of stocks. These mutual funds are administered by investment banks and other institutions which, as we have all seen, almost without exception, pay their executives ridiculously huge bonuses even though they lost all the money you had been forced to put aside for retirement. So while the money your earned can’t do you any good, it supports a lavish lifestyle for others.

 

That’s bad enough, but there’s an even more chilling revelation hidden in this web of deceit. One of the strongest arguments against socialism is always the exorbitantly high taxes needed to pay for social services. On the order of forty to fifty percent in some countries. But we’re already paying upwards of 30% for retirement alone! Add income tax and that jumps to 45%. Health care comes out of our checks too, which easily pushes the rate to 50%. State and local taxes drive it north of 60%. In California it’s more like 70%.

 

Friends, we’re socialist already. But it gets worse. Far worse, because for most of us, there are no social services to be had! The hallmark of the socialist state – the safety net – is missing. While other socialist countries provide retirement and health care – even if it isn’t the best – the middle class in this country has neither. Social Security is insolvent and our 401K’s are worthless. Health care is only available while you’re working. So while we’re socialist, we’re not. We have the high taxes, but not the services. Where did the money go? I hear some Wall Street execs took home in excess of 2 billion dollars in compensation last year.

 

In fact, we’ve come full circle. We’re back to feudalism. Bad feudalism. In a good feudal relationship, the Lord expected work but provided protection. As long as he wasn’t a cruel, greedy bastard, the system worked surprisingly well. When he was a cruel, greedy bastard the Lord rolled in lavish excess, stopped providing protection, yet demanded the serfs continue to work. The serfs starved and complained but the Lords had lost the fundamental human element of compassion so simply shut the gates on their castles.

 

The question is, what are we going to do about it? America isn’t feudal Europe. In feudal Europe the people had no rights and the wealthy class had no accountability. We still have rights and there is still accountability. For now. But for how much longer? Those in power have already shown their disdain for good government and good business in favor of hoarding wealth and land. They passed laws which made your money available to them and not to you. They know they have swindled us and that we’ve done nothing about it. When people behave badly without consequence they grow only more bold. Why should they not feel that they are fundamentally entitled just because the masses are still restrained by the concepts of law and ethics? Concepts which they have found to be inconvenient or never had in the first place. Will they win in their latest ruse to increase their fortunes by asking us to buy things we don’t need, made in a country not ours, to ‘jumpstart’ the economy and get money they don’t need flowing back into their coffers?

 

I’m not a fan of socialism, but it is better than what we have now. And unless we the people take back not only our government, but our economy, we’ll wind up with even less. What is that going to take? There are those who say that the Tree of Liberty requires blood and sometimes they are right. But it hasn’t gone that far yet. Not even close. And in fact, the solution is much simpler, won’t cost a thing, and would actually save us money.

 

All that in between lifting the razor to my face and pulling it down my cheek. I guess you can have a thought in the shower.

-Futbol Guru, http://mises.org/community/blogs/not-a-lemming