Do you remember way back when the presidential candidates were talking about Social Security instead of chads and butterfly ballots and vote counting?
And do you remember those rosy campaign promises to let people take back part of their Social Security tax payments and invest it in the stock market?
In those days it looked to many like a fine deal. The market kept going up as if it would never end. Prices of those new dot com companies were skyrocketing, doubling or tripling within days after they went on the market.
Young hotshots were dropping their regular jobs and crowding into day trading, the lucky ones making thousands of dollars as they bought and sold every few minutes.
The prospect of quick and easy riches was tempting. It is still tempting to those who don’t fully realize that times have changed.
Well, times have changed. Many of the dot coms have gone belly up. The Nasdaq has lost a third of its value this year. Many investors are back where they started before they joined the buying binge. Many of those who gambled by borrowing to invest more have lost their shirts. The day traders have stopped bragging, and many are trying to get back to regular work.
The shakedown comes as a reminder that the entire stock market is, after all, a form of gambling. It can be a good long-term gamble, but high risks can mean big losses as well as big gains.
The advocates of what they call “privatization” of Social Security should face the facts and stop trying to tempt the American people to gamble with their retirement safety net. Privatization was a bad idea whose time has passed.