Will BlackRock revive Social Security reform?

Earlier this week mega asset manager BlackRock hosted a high-profile public event in Washington, D.C. focused on retirement savings, with several A-list panelists from the world of politics and corporate finance. Many of the speakers featured on the Mellon Auditorium stage talked about the idea of a “savings crisis” or “retirement crisis” in the US as a major public policy concern. While several speakers suggested technocratic policy nudges related to retirement planning and related issues, much bolder comments from CEOs Larry Fink and Jamie Dimon were the most noteworthy.

Several members of Congress addressed the crowd, including Sen. Katie Britt (R-AL) and Sen. Cory Booker (D-NJ), and their remarks were a mix of expressing concern over insufficient retirement savings in general as well as other problems that were presented as barriers to retirement savings. The format and connections were elastic, though, as any other expense item in a household’s budget can be considered a “barrier to savings.” Any dollar spent on any other household priority is, by definition, not going into a retirement account, and any dollar added to one’s income is thus available for that purpose. That leaves a lot of room for promoting one’s pet issues while still fitting into the ostensible theme.

So, in this framing, Sen. Britt and her state delegation colleague Rep. Terri Sewell (D-AL) talked about the need for affordable childcare as a retirement savings issue, recommending changes to the Employer Provided Child Care Credit, known as 45F. Britt and Sen. Tim Kaine (D-VA) have co-sponsored both the Child Care Availability and Affordability Act, which makes changes to current tax provisions that would lower costs for parents and businesses providing child care, and the Child Care Workforce Act, would create a grant program for states and cities to boost the pay of childcare workers.

The real headliners at the event, however, were BlackRock CEO Larry Fink and JPMorgan Chase CEO Jamie Dimon. During the course of the retirement finance discussion, Fink criticized the current structure of Social Security and emphasized that the Social Security trust fund doesn’t “grow alongside the growth of America” the way capital invested in the stock market does:

 “We have a plan called Social Security that doesn’t grow with the economy,” Fink told Semafor’s Liz Hoffman at BlackRock’s retirement summit. “You’re detached from the economy, and you don’t feel like you’re winning.”

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“The beauty of that plan [Australia’s system of individual retirement accounts], unlike Social Security — and I know we can’t talk about Social Security in this country — is that you’re investing in real assets,” he said. “You’re growing with your country.”

That’s a finance issue, but it’s also a cultural issue, and I think that’s even more what Fink was getting at. He talked about wanting Americans to be more hopeful and optimistic about the future and suggested that a reformed retirement savings system would be part of such a long-term attitude change.

His emphasis on how different savings patterns can change the cultural and political landscape of the United States very much echoes what many free-market advocates said during the 1990s and into the presidency of George W. Bush, when changing Social Security into a system of individual accounts was last seriously contemplated. At the time, many observers made a point similar to Fink’s, which is that having one’s retirement savings tied to changes in the real economy would incentivize Americans to support pro-growth policies and see that a growing pie of prosperity was better that zero-sum squabbling over a fixed amount of government benefit payments.

As part of this “ownership society” initiative, the George W. Bush White House promoted things like health savings accounts, association health plans, and broad-based tax relief. Not everything on the Bush affordability agenda was equally well-thought out, but the overall thrust of ownership society policies parallels the “abundance agenda” policies that are rapidly gaining support today.

Jamie Dimon’s comments were further afield of the day’s ostensible topic of retirement savings, although his bank offers many products and services to customers who are looking to save. When asked how uncertainty over the current round of Trump tariffs were impacting business investment, Dimon suggested that as many as 30 percent of JPMorgan’s business clients were currently pausing or reconsidering significant investments because of the tariff threat. But he also made headlines for trashing both the proxy advisor duopoly of ISS and Glass-Lewis and the role they’ve played in politicizing investment and corporate management decisions over the past several years.

Dimon also took on the climate change policies adopted by large firms in recent years as part of the environmental, social and governance (ESG) movement. Suggesting that climate-themed investing was a political fad lacking market fundamentals, he said that he was reminded of the infamous solar company Solyndra, which failed after receiving hundred of millions of dollars in federal aid and was aggressively promoted around 2010 by both then-President Barack Obama and then-Vice President Joe Biden. Dimon said that the current vogue for green tech investments was so poorly based it was fated to produce “a hundred Solyndras.” 

Dimon seems to be channeling the wider market these days. Many high-profile firms have recently left or ceased to support climate-themed business associations like the Net Zero Asset Managers (NZAM) initiative and Climate Action 100+. After this week’s event sponsor, BlackRock, left NZAM in January of this year, the group more or less shut down entirely. Market observers will no doubt be watching closely to determine which firms – among those that are still standing at the moment – will end up being among the one-hundred Solyndras that Dimon predicted.