Battle of the Sectors

Private versus Public

My entire adult life I’ve been told that government is slow and bureaucratic. Private businesses and corporations are fast and customer friendly.

At times I used to believe it. But this past month proved again — that’s bullshit.

With my job winding down, and my motivation gone, I decided to “retire” (almost).

My big decision was “when” to take Social Security. Should I dip into my Roth IRA now, and defer feeding at the government trough until I’m full retirement age (67 for my generation) or even 70?

Financial planners are split. My 93-year-old father, a CFP, said “wait, wait” you’re stupid to take it now. (He didn’t say the stupid part out loud, but we all know what he was thinking). Waiting means more than an 8-percent return per year on government payments. Not even the darkest of dark pool Wall Street bets can guarantee an 8-percent return for 10 years — that’s Bernie Madoff Ponzi scheme stuff.

So, I signed up to start pulling some funds out of Vanguard, a highly respected private entity for it’s low fees and efficient investment funds.

But then I talked to my sister, a recently retired financial advisor with all her licenses. “It’s my money, I’m taking it now. Not everyone lives to 93.”

When Trump got elected and Musk started threatening Social Security saying things like times will get “hard,” I decided to get my money while it’s still there. The wife will wait to take hers, and we’ll hedge our bets on the big government returns with the inflation rider.

Vanguard had a two-day head start for funding withdrawal. I tried signing up for a direct bank link with our bank. But that website didn’t work, because the Wife is the first name on the account. “Accounts don’t match.” was the error written in blood red. I’m fully listed as an owner of the account, but Vanguard’s bots are too stupid to read two full names.

With no automated direct link, I had to write an email to Vanguard and wait for a letter (a paper letter in a fucking envelope) in order to electronically link my accounts.

While waiting for the letter, I hit the ssa.gov website.

Government website: Looks like shit; works like a charm

“Claim benefits” pulled up a form that looked like it was programmed in 1986. It looked exactly like a scanned copy of the paper form typewritten in 1936 with a scroll bar on the right, and “fillable boxes”. I hand entered all my account details, clicked “yes” three times.

Ten minutes later, I had an email from Social Security “approved.” Three days later, I had my first deposit right in my bank.

The same day I had the money from Social Security, I got the letter from Vanguard with the new “secret code.” I entered the secret code on the website and linked the accounts.

If I asked for the same amount I already had from Social Security, there would be a 5-7 day wait while they “sold” some investments and then a 2-3 day “wait” for the electronic transfer. Bullshit, bullshit, bullshit.

Vanguard threw up all of these bureaucratic delays to hold onto my money. I don’t know what the float is for a few thousand dollars for a 7-10 business days is, but multiply that by millions of customers, and you can see how the guy who designed this system paid for everyone’s bonus at Vanguard last year.

It worked so well, I didn’t even bother taking out the money, Uncle Sam had already filled my bank account. So Vanguard’s inefficiency worked perfectly. “Just try to get your money, we dare you.”

This is a lesson I’ve learned over and over again.

Not the first time

When I taught in public school, I watched “charter schools” come along and take money off the public sector, deny services to difficult students (behavior or special education issues) and have almost the exact same test results.

Most of the early charter schools in Arizona were just real estate deals. Open a school with trailers on a commercial lot, use public funds to pay for the land, pay no property taxes because it’s a school, hire your friends and family, 5 years later close the school, sell the land and keep the profit.

Working for a state university, I watched private colleges like University of Phoenix, grow and grow, only to become diploma mills that suck off student loans, make outrageous promises and shut their doors or change names every 10 years when their reputation is in tatters.

Working in the healthcare field, I’ve watched medical practices defraud insurance like the Health South rip off of medicare. But those companies take many more funds from private insurance. Medicare pushes down the cost of each service, but private insurance pays more per visit or procedure. So the bigger money is in ripping off the insurance companies.

It’s smarter too — it’s like Omar ripping off the drug dealers. The dealers can’t report your theft to the cops, just the way private insurance keeps those scams quiet or people will figure out what a rip off health insurance actually is.

I’m not going to say government is better at everything or is without fault. But look around, most of the time when there’s a service that everyone needs, (roads, water, sewers, fire protection, flood control, books to read, parks and recreation, public lands, mass transit…) the government does it better than the private sector.

Who knew it’s also true for paying out your retirement.