Articles - China Daily

 

US primaries? Who cares!

One of the principal topics of conversation over dinner in the staff canteen these days invariably centers on who is going to end up with the nomination for the upcoming US presidential elections later this year. Romney? Gingrich? Santorum?... My colleagues – mostly American – appear genuinely surprised when I tell them I really couldn’t care less, quoting that age-old maxim to them: “It doesn’t matter who you vote for. The politicians always get in.”

It’s a well-known fact that the vast majority of the electorate simply doesn’t know or understand what or whom they are voting for. If they did, do you honestly think the likes of Ronald Reagan or Tony Blair would ever have got into power? Both of these were clear cases of personality taking priority over policies. Reagan at least relied on his advisers – presumably people who had a better grasp of the situation than he did; and in so doing, people look back fondly on his presidency. But when some other politicians get in, do the voters really understand some of the disastrous decisions that are taken in their name? I doubt it very much.

Take the case of the British ex-Prime Minister Gordon Brown, for instance. This British Disaster – who only this week was made fun of by media outlets in the UK for “gawping” at the cleavage of Sally Bercow, wife of the Speaker of the House of Commons - only got in because the Great British public voted for the spin of Tony Blair. It was ”Gordie” who almost single-handedly ruined the country by selling off the UK’s gold reserves when the price of gold was at a 20-year low. He sold the gold for £2bn when it was valued at just $300 an ounce. The sale came shortly before bullion started a blistering rally that took prices to a record high of $1,920.30 an ounce in September 2011. The same gold reserves would be worth £11bn today.

It was also “Gordie” who all but ruined the UK’s Pension Industry – previously admired by the whole continent of Europe as a shining example of how a pension industry should be run – by introducing a pension stealth tax that reduced the value of retirement funds by at least £100 billion. This is more than twice as much as the combined pension deficits of the country's 350 biggest companies. As a result of his abysmal stewardship of the nation’s finances, he ensured that many British pensioners would end their days in near-poverty.

Now, while nobody expects a former prime minister to sleep on a park bench, many might be surprised at just how generous a pension a prime minister is entitled to. Regardless of how long he or she serves, he is entitled to half his £194,250 salary index-linked against inflation for the rest of his life. Yet another example of how it’s one rule for the masses and another for the politicians?

So what does this have to do with the American election, I hear you ask. Well, look around you. Greece is essentially bust. Italy’s sinking further into debt. So is Spain. Even France could end up in trouble. Across the world, politicians – many of whom would be incapable of holding down a “real job” – are once again eyeing up the pension funds to force them to “invest” in their countries’ disastrous finances.

Only in 2008, Argentina - frozen out of global debt markets - decreed that private pension assets were to be transferred over to the state. And 10 years previously, Hungary forced all workers to save into a private scheme, only to turn around in 2010 as its public debts spiraled out of control, and insisted that private-pension fund assets be moved to the state on the threat that those who didn’t would lose their state pension.

In Ireland, the National Pension Reserve Fund, set up at a time of budget surplus, is being used to pay €12.5 billion – or half the fund’s assets - toward the bail-out of the banks.

And in the US? Business Week magazine reports that the Treasury and Labor departments are asking for public comment on the conversion of savings and Individual Retirement Accounts into annuities, whereby the government would take retirement savings in return for a promise to pay back monthly benefits in retirement. As Karl Denninger of the Market Ticker Web site reports: "Choices have a funny way of turning into mandates, and this looks to me like a raw admission that Treasury knows it will not be able to sell its debt in the open market; so they will effectively tax you by forcing your ‘retirement' money to buy them." If the government keeps punishing responsibility and rewarding failure, society ends up with a lot less responsibility and a lot more failure, destroying prosperity in the process. As former British Prime Minister MargaretThatcher said, "The trouble with socialism is you run out of other people's money to spend."

When my daughter was still a teenager, I always used to tell her, “I don’t worry at all whom you marry... just so long as it isn’t a politician!” Unfortunately, it doesn’t matter whom the Americans nominate for their presidential race; he will still be a politician. So please, guys, just don’t come whining to me in a few months’ time to say I didn’t warn you!