ECONOMIC EXPERTS LOSE MONEY ©

When discussing private, individual retirement accounts, President Bush, and his buds tell us that we merely need to invest wisely. They say that this option will afford us the opportunity. Bush is often heard to say, “It is just that simple!” He tells us . . .

“I think people like the idea of being able to take some of their own money -- in other words, government says, you can decide, as opposed to, we'll decide for you, you get to decide if this is in your interest. And you get to decide whether you want to set some of your money aside in an account that will earn a better rate of return than that which will be earned in the Social Security system. That's an important part of making sure the system works for the individual.

I repeat; personal accounts do not permanently fix the solution. They make the solution more attractive for the individual worker. And that's important for people for understand.”

However, The Los Angeles Times tells another tale. In an article titled, “Experts Are at a Loss on Investing,” Nobel Prize winners in economics and academicians look at their own financial history. They speak from experience, personal experience. Each admits that they did not invest their money wisely. They had the choice, the cash, and the knowledge and yet . . .

Mr. Bush assures us that we will be safe, we will be secure, we will be wise, and we will do well; better than we would under Social Security. However, when we consider the personal experiences of economic experts we find reason to doubt.

The father of "modern portfolio theory," Harry M. Markowitz is a Nobel Prize winner in economics. He is best known for his theories on diversity. However, admittedly, he ignored his own advice; he did not diversify his investments. His own portfolio was limited. He placed fifty percent of his cash in stocks and the other fifty percent in a conservative, low-interest investment. Markowitz, now 77-years-old said, "In retrospect, it would have been better to have been more in stocks when I was younger."

Daniel Kahneman of Princeton University is another Nobel Prize winner; he won this award in 2002. Kahneman mused of his monies, “"I think very little about my retirement savings, because I know that thinking could make me poorer or more miserable or both."

Then there is 2001 Nobel Prize winner Joseph E. Stiglitz. He is a professor at Columbia, and a former Clinton administration economist. In reflecting of his own financial history he quips, "Retirement is not like buying a cup of coffee. It's not something you get to do over and over again and learn from your mistakes."

Mr. Bush if the economists, the experts, stumble, stall, and do not save well, then what of us, the rest of us?