Where Is the $2 Trillion We Lost?
"The Congressional Budget Office recently estimated that the market wiped out $2 trillion in retirement savings over the past 15 months," according to the Boston Globe today. This statement is a striking example of deceptive economic jargon being used to cover up facts about reality that our ruling plutocracy wants to hide from public awareness. It is an example of what I call "coverupese."
What does it actually mean, in terms of the material objects in the real world that alone constitute wealth, to say that $2 trillion was wiped out? If an earthquake or flood or fire destroyed homes and factories, or if a disease epidemic killed many of our workers, then it might make perfect sense to speak of $2 trillion being wiped out. Real wealth or the capacity to produce real wealth would indeed have been wiped out. But nothing like that has happened in the last 15 months to justify the claim that $2 trillion has been wiped out. A visitor from Mars, surveying the scene, would not find any real wealth or productive capacity damaged in the least; the only thing the Martian would see is numbers in the accounts of various financial institutions having been replaced with smaller numbers, and this in turn reciprocally affecting and being affected by people's heightened anxiety, fear and mistrust. But at the level of physical reality, there was no lost wealth.
And yet we know that many people who were confident they would be able to retire soon will very likely have to work many more years than they expected. Many people already retired will need to go back to work. It would be understandable for this to happen if some kind of physical disaster had truly wiped out much of our wealth or ability to produce wealth. But in the absence of such a disaster, it does not make sense. Old people can retire if younger people produce the wealth that is required to provide for the needs of retired people: food, shelter, medical care, and so forth. Is there anything in the physical world of reality, not the economic jargon world of "coverupese," that happened in the last 15 months that would prevent younger people from providing retired people what they need to live? No. The amount of wealth and wealth-producing capability is no less today than 15 months ago.
So what is the real reason why older Americans are going to have to work when they expected to retire? The real reason is that the plutocracy wants them to. The plutocracy wants our wealth to be used for their own benefit and amusement, not to support retired workers. It is as simple as that. We've gone from "Let them eat cake" to "Let them work till they drop." All the talk about how our corporate and government elite are making painful (for us) decisions because the "market made them do it" is mumbo-jumbo eyewash. Two trillion dollars was never "wiped out"; it was transferred from us to them.
It's time we started talking about how to take back what the plutocracy has stolen from us, and how to create a more equal and democratic society that does not allow such criminality to take place.
In the world of economic jargon, the world of coverupese, the $2 trillion dollars was not stolen by anybody, but really did just vanish. The argument goes like this. The price of stocks is not their actual worth but merely what some buyers and sellers ("the market") at a particular moment in time agree, perhaps wrongly, that they are worth. A person who sees the market value of his or her stock plunge does indeed lose the opportunity of selling it at its former high price, but that lost wealth simply ceased to exist; it did not end up in somebody else's hands. Sounds convincing, right?
Here's the flaw in the argument. The plutocracy--the folks who created the infamous derivatives, the Ponzi schemes that persuaded people ("the market") that the value of shares in corporations and the value of our homes were going up up up--were also busy doing something else. They were knowingly (yes, knowingly! these guys understand such things) lying to Americans that we should and could count on these mysterious "up up up"s to continue going "up up up" indefinitely, and that we could therefore rely on these fraudulent "up up up"s for our retirement, and that we therefore had nothing to fear about the plutocracy's new policy of replacing our guaranteed pensions (oh yes, remember them?) with 401(k) investments that we could (for joy for joy) "manage ourselves" and with which we could even get rich from the "up up up"s.
The scam worked. The plutocracy stole our guaranteed pensions by persuading us to trade them for a bright shiny "up up up" bubble. The 2 trillion dollars lost from our retirement 401(k)s may have just vanished in the sense that it was never real in the first place, having been merely the wrong guess by "the market" about what those "up up up" stocks were really worth, but those "unreal" 2 trillion dollars represent what the plutocracy gave us in exchange for our guaranteed pensions. So to those who say the plutocracy did not really steal $2 trillion from us, I reply: If somebody writes you a check for $20,000 to buy your car, and you let him drive off with your car only to discover the next day that the check bounces, would you say, "Well, the check was never really worth $20,000 in the first place, so I guess I can't blame anybody for stealing my money just because I discovered that the check was really worthless"?
But, some might argue, the plutocracy lost money from the bubble bursting too. To which I reply, "Really? Who do you think is getting bailed out with the $700 billion that the government is taking from taxpayers' pockets?"
After posting the above, a friend raised yet a different objection. He said that the plutocracy didn't really steal our guaranteed pensions from us because those pensions would never have actually been paid to us in the first place--that "the money for the guaranteed pensions was a 'lie' to keep the workers happy." To my friend, I replied as follows:
The money for the guaranteed pensions may have been a lie, but only because the elite chose to direct 3 trillion dollars worth of the labor of American workers towards producing and employing military weapons for unjust wars and patching up and caring for severely wounded people in their 20's who would not have needed medical care in the first place except for the fact that the elite sent them to fight unjust wars in Iraq and Afghanistan. Had society been directed by the values and aims of ordinary people, the 3 trillion dollars worth of wealth that the Iraq war has cost us (according to Nobel prize winning economist Joseph Stiglitz) could have taken the form of, among other things, products and services that would indeed have made guaranteed pensions possible.