Talk about Fainthearted!
Edward Jones has long been one of the investment house pied pipers of private accounts. Not only were they an original member of the pro-phase-out trade group Alliance for Worker Retirement Security. But in the Wall Street Journal just yesterday, the group’s Executive Director, phase-out guru Derrick Max said they were “one of the few firms that has shown some passion for the issue independently of me.”
Coming from Max, you’ve got to expect that was quite a compliment.
It seemed to me that Edward Jones was an odd poster boy for privatization since just last month they were compelled as part of regulatory settlement to disclose that the firm had accepted “$82.4 million in secret payments from seven mutual-fund firms in the first 11 months of 2004 … that in some cases gave the brokerage firm more compensation for selling poorly performing funds than for selling stellar performers(emphasis added).”
Those words are from an article that appeared in the Wall Street Journal back on January 14th.
However that may be, this week they started pumping a thirty minute pro-Social Security phase-out informercial into their local offices around the country in what the Journal called “rare move by a brokerage house to address the politically charged debate over changes in Social Security with clients as part of a marketing effort.”
But then, right as Edward Jones was making its mark among the great pied pipers of private accounts, the AFL-CIO staged a few protests at two of their offices and out of the blue Edward Jones canceled its membership in Max’s Alliance for Worker Retirement Security.
Like I said, talk about fainthearted! Maybe we can get these guys together with our man Rep. Allen Boyd and they can compare notes about being wiggly squigglies and folding at the first signs of a fight.
Edward Jones spokesperson Regina DeLuca-Imral claimed, rather limply, that the company had withdrawn from the Alliance “because of the confusion some have expressed about Edward Jones’s position on Social Security reform.”
These pro-privatization industry groups and astroturf outfits seem to emerge out of the water every year or so and then, as often as not, they die off like salmon after charging home to mate.
Back in 2001, for instance, I wrote an article about an organization called Coalition for American Financial Security, which seemed to spring from the loins of the Frank Russell Company, another one of the industry’s pied pipers of private accounts. Their high water mark came in the summer of 2001 when then-Treasury Secretary Paul O’Neill spoke before them thrilling many pro-phase out hearts in the process.
Of course, of all the pied pipers none pipes louder than Charles Schwab.
Schwab himself or some company executive can often be found at the president’s economic summits or pro-phase out forums. And as nearly as I can tell they’re almost always one of the bigger jobbers in these pro-phase out confabs and clubs. Schwab’s chief financial strategist, Liz Ann Sonders, talked up private accounts at the president’s summit back in December. (More recently Bush tapped Sonders to be on his new tax reform panel.)
Somehow I doubt Schwab’s heart will be as faint as the aforementioned Jones. But I guess only time will tell.
