My friend and neighbor Helaine Olen just got a nice piece into Slate about the way that our finance gurus let us down. It's the same story I've been looking at for the past decade, but told in a pretty immediately accessible way - particularly for Slate's audience. While Helaine concludes that she'd be satisfied with a genuine apology from the finance industry for how badly they served personal investors, I feel like I want more: an admission that they were actually successful in their industry's greater quest, which was to enact the greatest redistribution of wealth to the wealthy since about 1300. Let's hope it isn't followed by disastrous unemployment and a plague this time, too. Excerpt:
Years ago, when I wrote a popular financial makeover feature for a major national newspaper, one of our subjects asked if he should be plowing his more than $50,000 in savings into gold. It was 1997 and gold was trading at a little more than $300 an ounce. The financial planner assisting with the piece laughed dismissively, and the question never made it into the final write-up. Well, my bad. As I write, gold is hovering around $900 an ounce.
For more than two decades, as income inequality increased and job security decreased, Americans lapped up personal finance columns, books, and television shows. We thrilled to stock tips and swooned at sensible strategies for using dollar-cost averaging to invest in no-load index funds. Buy and hold, my friends! The annualized gain for the S&P 500 stock index over time is more than 10 percent! You, too, can turn into the millionaire next door. Carpe diem, folks! Seize the financial day!
The advice proffered by the vast majority of analysts, would-be gurus, and television pundits came down to one word: stocks. Some, like CNBC's infamous Jim Cramer, advocated stock-picking strategies. Others encouraged mutual funds. But very few--at least of those that could get publicity via mainstream outlets--doubted the efficacy of the market.
The End of Personal Finance (Slate / The Big Money)
Winner of the Media Ecology Association's first Neil Postman award for Career Achievement in Public Intellectual Activity, Douglas Rushkoff is an author, teacher, and documentarian who focuses on the ways people, cultures, and institutions create, share, and influence each other's values. He is technology and media commentator for CNN, and has taught and lectured around the world about media, technology, culture and economics. His new book, Program or Be Programmed: Ten Commands for a Digital Age, a followup to his Frontline documentary, Digital Nation. His last book, an analysis of the corporate spectacle called Life Inc., was also made into a short, award-winning film.