In a letter to the editor published by The Chicago Tribune, I respond to Steve Chapman’s February 10 article on Bernie Sanders and Wall Street finance. Chapman writes about the trust he has in the financial firm handling his 401(k) and that he has “to the best of [his] knowledge” never been defrauded. Chapman proceeds to invoke his broader trust in Wall Street actors, attempting to delegitimize and downplay the Sanders campaign’s criticism of the financial sector.
The pay-walled tribune article can be found here, and my letter is reproduced below.
Too Much Trust
Steve Chapman trusts the financial firm managing his 401(k) for a tiny fee. Maybe he should look at that fee, which may not be so tiny. Excessive management fees, a type of abuse that has been well-documented, reduce the gains that he receives. Maybe he should look at the mutual funds his financial firm has his money invested in. Maybe they are chosen because they give the manager a higher commission, a problem so widespread that the Labor Department is trying to require the advice to be in the client’s interest, not because they are best for him. Maybe the funds are filled with securities that, like many mortgage-backed securities issued before the recession, the management company is secretly betting against. Those are just some of the reasons that Bernie Sanders’ statements ring true with so many people who are not as blindly trusting as Chapman.
— Spencer Cowan, Wilmette