Posted on 10/04/2005 5:36:23 AM PDT by shuckmaster
ARROYO GRANDE, Calif. (MarketWatch) -- Remember the "Planet of the Apes" with its fascinating sci-fi role-reversal: Humanoids are the dumb beasts. Apes and their relatives are the intelligent beings: That's right, Apes, Gorillas, Orangutans and Chimpanzees are running the world!
Warning: This fantasy is becoming reality. In the world of economics and investing, evolution is rapidly reversing itself. Humanoids are being overpowered. The Apes are rapidly pushing us back down the food chain.
In this new sci-fi drama, the cast of characters is divided very simply: Humanoids are America's 95 million naïve and passive investors. They are enslaved to the elite special interest Apes and their clansmen ruling Wall Street, Washington and Corporate America.
Using radical new "intelligent design" theories, the Apes are telling us that hurricanes are opportunities for "economic stimulus." They also want Humanoid investors to believe other faith-based theories are good for America, such wizardry as pork barrel spending, deficits-don't-matter logic, tax cuts for the superrich, preemptory wars, no-bid drug contracts and trade policies that build China and India into superpower competitors.
This evolutionary reversal is being accelerated by a steady stream of clever "investor education" initiatives. Yes, clever, because the Apes tell us that "investor education" will help us Humanoids build up million-dollar retirement nest eggs. But the exact opposite is happening. And as bizarre and contradictory as it sounds, that's exactly what the Apes secretly want: They do not want Humanoids to be independent thinkers.
Consider the facts: The SEC still hasn't figured out how to spend the investor-education money included in the $1.4 billion Wall Street settlement from scandals unearthed two years ago. And remember the Mutual Fund Reform Act of 2004? Congress killed the bill, which had a provision to stamp out "investor illiteracy" -- proof that Washington's Apes believed America's 95 million Humanoids are still unevolved "illiterate investors."
But the truth is, we already have too many useless "investor education" programs! Some have been around a long time, like the Mutual Fund Education Alliance, formed in 1971. The names alone echo the same dull, ineffective messages: Alliance for Investor Education, American Association of Individual Investors, National Association of Investor Corporations and, lately, the Investment Company Institute has chimed in with Funding Your Future. And the big fund companies have had extensive "investor education" programs for years.
Investor education is a colossal failure
Unfortunately, these programs aren't working. Things just keep getting worse! Mounting consumer and national debt. Zero savings. Bankruptcies. Increasing poverty. On one hand, tons of "investor education" programs. On the other, Humanoid investors are regressing along the economic evolutionary chain.
Nineties mania proved how illiterate Humanoids are as investors. The Apes lead us like sheep into buying idiotic dot.coms. As investors we were not evolved enough to avoid the big bad bear and the recession. Nest eggs vanished. We lost trillions, while the clever Apes managing our mutual funds continued making their average $436,500 annual salaries.
Yes, they made monkeys out of us!
Step out of the fantasy folks: "Investor education" gets a big fat failing grade. Since the early '80s America's savings rate has collapsed from 11% to zero as we drown in debt. Human evolution is in fact being reverse-engineered by the Apes in the real world of money, investing and economics.
Investor education can be summarized in one simple formula that will make anyone a millionaire. This one formula is all you ever need to know about investing. It's not a secret, and it's emphasized in every one of the programs above: "Save 10%!" It's that simple. And here's the formula's corollary: "Nothing saved, equals nothing invested, equals nothing compounded, equals nothing for retirement."
So why is America's savings rate zero? Why are "investor education" programs such a miserable failure, a misleading, total waste of money?
One: Humanoids investors are "illiterate" by choice
The shocking truth is most Humanoids do not want to be "educated investors!" Seriously, we've got full-time jobs, kids and parents to worry about, and a heck of a lot more. Yes, we want to retire as millionaires, but getting "educated" about investing takes too much time, effort and brain cells. So we are unconsciously vulnerable to the Apes clever brainwashing PR hype and advertising spin.
Humanoid investors have been slowly programmed to focus on the short-term (getting kids to Little League, filling the tank, running errands, enjoying our daily $3.50 latte, disassociating from reality with the latest iPod, Xbox or HDTV and buying whatever cable TV's talking heads are pushing today). Behavioral science proves our "long-term investing gene" has been erased. The Apes replaced it with an "immediate-gratification gene." Ergo, we're zero-saving consumers!
Two: Primates fear "educated investors" will revolt
And that gets me to the second really big reason "investor education" programs fail. As much as the Apes ruling Wall Street, Washington and Corporate America pretend to care, they secretly hate the idea of having truly "educated investors" around. The reason's obvious! The Apes know that if the Humanoids ever did get educated, there'd be a brutal, widespread revolution!
If Humanoid investors knew how Apes keep their greed machine secretly hidden ... how much the Apes are skimming off the top ... and how much effort the Apes put into keeping Humanoid investors enslaved to their stupid "faith-based" investing theories, a grassroots rebellion would sweep the Primates out of power.
The truth is, my dear fellow Humanoid investors, our self-appointed masters (all those Apes populating the upper echelons of Wall Street, Washington and Corporate America) are too intelligent, too self-interested, too arrogant and too greedy for their own good.
So here's my prediction: Soon this evolutionary reversal will slam headlong into the law of unintended consequences. Then, something unpredictable will happen (the reappearance of the missing link?) and the balance will again shift. The Apes will self-destruct. What then? You tell me, what's the next likely episode in this sci-fi scenario?!
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