Should AARP win this month’s liberal hypocrisy award?
AARP’s scary anti-Social Security reform ad is designed to scare granny out of her wits. It compares the Bush plan to allow younger workers to invest a portion of their retirement funds in the market to gambling. “If we feel like gambling,” one of the administration critics says, “we’ll play the slots.”
But, as James K. Glassman points out, this is a very odd position for AARP to take:
“[T]he AARP is talking out of both sides of its mouth,” notes Glassman. “It says that stock and bond investing is like playing a slot machine at the same time it promotes stock and bond investing by selling 38 mutual funds to its members and taking a cut from each sale.”
But the funds the AARP offers to its older members are much safer than most, right? Well, no’
“Among the AARP funds are far riskier choices,” writes Glassman, “than advocates of Social Security reform would ever offer to American workers: for example, a Latin American stock fund, a junk-bond fund, and a fund that holds shares of companies based in such highly volatile markets as Indonesia and Russia.
“AARP Services, Inc., the lucrative business arm of the AARP, entered into a deal with Scudder Investments to sell mutual funds to its members as part of a special affinity program. According to a prospectus, Scudder pays AARP an annual fee for the use of its trademark that ranges from .05 percent to .07 percent of assets. That can come to a lot of money. One fund alone, Scudder Growth & Income AARP, manages $5 billion.
“The hypocrisy is breathtaking. AARP’s website carries solid information about how to invest wisely, but the organization’s anti-Social Security ads make investing – even under the tough restrictions advocated by reformers — look like a game for dumb suckers and out-of-control gamblers.
“AARP is using an old strategy: trying to scare the wits out of old people. The organization’s executives want its members to think that Social Security will be destroyed by offering young people the option of personal accounts,” says Glassman.