Unlike W, Obama is not coasting passively through his final time in office. On the contrary, he is squeezing every ounce of tyranny he can get from each day:
The Department of Labor says its so-called fiduciary rule will make financial advisers act in the best interests of clients. What Labor doesn’t say is that the rule carries such enormous potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts. Middle-income investors may be forced to look elsewhere for financial advice even as Team Obama is enabling a raft of new government-run competitors for retirement savings. This is no coincidence.
Labor’s new rule will start biting in January as the President is leaving office. Under the rule, financial firms advising workers moving money out of company 401(k) plans into Individual Retirement Accounts will have to follow the new higher standards. But Labor has already proposed waivers from the federal Erisa law so new state-run retirement plans don’t have the same regulatory burden as private employers do.
When government becomes involved in any industry, it enjoys the overwhelming advantages of being able to operate at a loss indefinitely, and being able to cripple opposition with weaponized regulations. Once the competition has been destroyed, we are left with socialism — i.e., mediocrity at best.
Labor’s one-two punch on private savings has something for everyone in the progressive coalition. Senator Elizabeth Warren can check off another item on her wish list of anti-business initiatives. [Labor Secretary Thomas] Perez gets to burnish his credentials as a candidate for Vice President. And Mr. Obama gets to say he helped government control more of the private economy.
What average investors get out of this deal is much less certain. But judging by the pending California plan, one answer is: low returns. The initial investment allocation, even for young workers, is likely to be heavy on government bonds. Naturally. …
Charging young investors for the privilege of loaning money to government, while handicapping private competitors and denying choices to middle-income consumers. Another perfect progressive innovation.
If it belongs to you, Big Government wants to take it. Managing your retirement savings is a step toward confiscating them. But don’t worry, some of your money will be doled back to you, if bureaucrats are convinced you really need it.