Selling Social Security Short
by Bernard Wasow
The infomercial is nothing new. “Public service announcements” and half hour television shows devoted to touting some medical or culinary breakthrough are old hat. But as media spending on old-fashioned news reporting falls, and variously anointed experts command more air and internet space, honest reporting is becoming harder to find in journalism, replaced by market driven spinning.
A disturbing example of such advertising cloaked as news in
to be found on an internet site called Investopedia in an article picked
up by Yahoo. Investopedia,
a Forbes Media company, provides question and answers that purport to present
facts and strategies to help the investing public. In practice, the sponsors use this space to sell their services
or to make political points. Strategies
favor trading: picking stocks, timing options, and the like. The pieces suggest that the information and
services they plug are keys to beating markets. Buying and holding index funds
is not a strategy one is likely to encounter on this site.
Fidelity has sponsored a particularly devious piece by Lisa Smith on Investopedia. In “10 Common Questions About Social Security” the investment firm, long a proponent of privatization of Social Security, provides innocuous answers to six simple questions about Social Security. While one might differ with the way answers are structured (one would not learn here, for example, that benefits continue to rise not only from age 62 to “retirement age,” but to age 70), on the whole, no marketing program is evident. Questions and answers numbers 7-10 are where Fidelity sells its services.
From question seven “Why is the System in Trouble,” (answer, it is a pay-as-you-go system) through question 10, “Will There Be Any Money Left When I Retire?” (answer, benefit cuts and tax increases are likely), Social Security is portrayed as a crumbling mess (“…much political posturing, little…being done…”).
The answers suggest not only that the system is unfunded (which is only partially true), but that the Trust Funds are a fraud, existing only as “an accounting model” (which is nonsense). Are the Treasury bonds held by the central bank of China similarly paper IOUs that deserve no attention? Is the acquisition of Treasury debt by the Social Security Trust Funds – which reduced the need to borrow from the central bank of China – of no real consequence? Social Security bashing is offered here as factual information.
Fidelity offers common answers to the common questions it poses. They are the answers of those who want to scare the American public into abandoning all or part of Social Security in favor of a private retirement program.
More than ever, we need to be vigilant of the answers that vested interests offer for public policy questions. Whether it is the insurance industry providing answers to “10 Common questions About Health Care,” or the financial services industry providing answers to “10 Common Questions About Social Security,” we need more tasters who can detect the poison in our intellectual fast food.
Postscript:
I received correspondence from
Investopedia in response to this article, which included the following: "Investopedia content is not influenced by any company
or advertiser. In fact, we have a strict policy that forbids it. Our main goal
is to educate investors about all aspects of finance…The article in question
was posted on the Yahoo!Finance website as a part of a syndication
relationship. We have no control over the ads that appear on or near content
syndicated from our site. The article was not written for Fidelity, and
Fidelity does not sponsor any content on our site; Fidelity is not selling its
services through any “cloaked advertising,” as you suggest in your article.
I'm the only person in America who has been in, out and then successfully gotten back in the Social Security system.
FIDELITY IS HOLDING MY SOCIAL SECURITY MONEY ON MARCH 26,2009.
Elizabeth Collier Shepherd
Columbia South Carolina.
Posted by: Elizabeth Shepherd | March 26, 2009 at 08:13 AM