A 'Cliff's' should include that:
- The US system used to be a LOT better for workers, with guaanteed pensions for many.
- The replacement of pensions by 401(k)'s was not so much an intentional policy decision as something we stumbled into accidentally, that was a tax dodge for high earners.
- But the massive potential for Wall Street to profit by getting average workers to put their retirement funds in these devices led them to campaign for their widespread use.
- That a not uncommon 2% per year fee for the accounts (the average is 1.3%) can lead to over half the money being given to Wall Street over decades.
- That while managed investment products demand higher fees that are highly profitable over time for Wall Street, they do not provide returns that justify the fees. That studies show over time index funds with low fees outperform the large majority of managed funds after fees every year, and outperform pretty much all of them over time.
I think a major point of the show was the reminder that we have shifted to a much worse policy for workers on retirement.
The show didn't get into the wider issues, but policies from globalization to all increases in productivity not going to workers (even as the economy doubled) to destroying pensions are massive wealth transfers to 'the 1%' and to corporations (who globally are sitting on something like $32 trillion in cash).
These are all setting records - concentration in wealth, corporae profits, idle cash at the top, at the same time workers are doing worse and worse.
For the first time in American history, the next generation not doing as well as the previous.
The show was about the retirement savings - and how people are not well informed about ther 401(k)'s.
One comment: 'you put up 100% of the capital, take 100% of the risk, and get 30% of the return').
It's no wonder that Wall Street wants control of Social Security as well - so they get a cut out of people's retirement, so much that giving Wall Street privatization was Bush's #1 domestic priority his second term - it's trillions in new profits for them over time, while estimated to cost several times as much for workers in overhead expenses (despite some potential benefits as well on average, and losses in other cases).
It also makes the case that 401(k)'s were greatly helped by being started during a stock boom; it doesn't mention privatization was hurt further by the economic crash.
To the person who said they 'can't sympathize' with the people, you have a problem.
Bottom line: the political system that's supposed to serve the people, instead is serving the wealthy a lot of the time, and that often means less for the people.
Like the economic crash and a number of these things, this wasn't so much some evil plan as just 'things happening this way' for reasons of various interests.
But there isn't the political will to say 'let's protect the people's interests'.
One more point the documentary makes: the fact that the large majority of 'financial planners' workers interact with in this have no real standards for that role, and are primarily salespeople serving the profits of the firms over the interests of the people; that there is a standard they could meet for having a 'fiduciary duty' to the client, which would obligate them to put the client's needs first, but they don't want to do that.
Instead, they only have to meet a "suitability" standard, meaning to not put the client in an investment wildly inappropriate.
The government agency involved proposed requiring the fiduciary standard for these financial planners; Wall Street lobbied against it with Congress, and it was withdrawn.