Here's what the ownership society - the neoliberal dream from Bush to Bush, from Clinton to Obama, looks like: the ripoff society! Eduard Porter's column is as fine as it can be within the limits of the idiot episteme we suffer under, where all that exists exists to profit the oligarchs:
"A research paper by Mr. Bogle published in Financial Analysts Journal makes the case. Actively managed mutual funds, in which many workers invest their retirement savings, are enormously costly.
First, there is the expense ratio — about 1.12 percent of assets for the average large capitalization blend fund. Then there are transaction costs and distribution costs. Active funds also pay a penalty for keeping a share of their assets in low-yielding cash. Altogether, costs add up to 2.27 percent per year, Mr. Bogle estimates.
By contrast, a passive index fund, like Vanguard’s Total Stock Market Index Fund, costs merely 0.06 percent a year in all.
Of course, Mr. Bogle has a horse in the race. He founded the Vanguard Group. He invented the first index fund for the public. His case is powerful, nonetheless.
Assuming an annual market return of 7 percent, he says, a 30-year-old worker who made $30,000 a year and received a 3 percent annual raise could retire at age 70 with $927,000 in the pot by saving 10 percent of her wages every year in a passive index fund. (Such a nest egg, at the standard withdrawal rate of 4 percent, would generate an inflation-adjusted $37,000 a year more or less indefinitely.) If she put it in a typical actively managed fund, she would end up with only $561,000."
Porter, alas, doesn't recommend the right change. Tax 401ks which are simply tax avoidance schemes for the upper and set up low tax passive index accounts through a postal bank - which the US had at one time, since in the 40s and 50s the government still did a few things for people instead of plutocrats. This won't happen, of course - after all, the advantage of doing this would accrue to the bottom 90 percent rather than the top 10 percent, and the White Republic that has its boot on the American people - executive, legislative, and judicial - wouldn't stand for that. But, of course, the screwed up retirement scene is the direct result of the government de-regulating and encouraging the huge rip off that fed wall street. Surprise!