American workers are up in arms over the Trump government’s offer for private equity firms to dip their dirty fingers into their retirement plans and tax money totaling nearly $9 trillion, and the principal beneficiary will be Blackstone CEO Stephen Schwarzman, said to be a crony of US President Trump, and one who had dreamt of exploiting the huge cash pool for years, Roxanne Cooper wrote for Raw Story on June 17, 2020.

The move, announced on June 3 by Labor Secretary Eugene Scalia, allows large managers of 401(k) plans and individual retirement accounts (IRAs) to put workers’ retirement savings into private equity investments that offer the possibility of huge returns — and devastating losses. Scalia released the guidance in response to a request for clarification of the Trump administration’s policy by Partners Group and Pantheon Ventures, private equity firms that collectively manage more than $140 billion in assets. The labor secretary presented the guidance as an effort to “level the playing field for ordinary investors.”

Eileen Appelbaum, co-director of the Center for Economic and Policy Research (CEPR), warned in a story published by Common Dreams on June 7 that “investing retirement savings in private equity exposes ordinary retirees to high risk.” She noted that US workers “have socked away $6.2 trillion in 401(k) accounts and another $2.5 trillion in IRA accounts.”

“If just 5 percent of the money in these retirement funds were available to private equity,” wrote Appelbaum, “it would be a windfall of $435 billion — real money even to private equity millionaires and billionaires.” David Sirota, Jacobin  editor-at-large and former speechwriter for Sen. Bernie Sanders’ 2020 presidential campaign, pointed out in his Too Much Information newsletter on Monday, June 15, that Schwarzman — a major donor to President Donald Trump — has been lobbying for looser restrictions on retirement investments for years. “In life you have to have a dream,” Schwartzman said in a call with analysts days after Trump’s inauguration in January 2017. “One of the dreams is our desire and the market’s need to have more access at retail to alternative asset products . . . A lot of people are not allowed to put those into retirement vehicles and other types . . . If there’s a change in that area that becomes a huge opportunity for the firm.”