Asymmetrical Information

The idea that 401K participation is falling because there are too many choices is really silly. Pick almost any product or service category in the economy and, chances are, there are a large number of potentially 'confusing choices'. Are cell-phone sales falling because of the vast array of different phones and calling plans? How about digital cameras? Life insurance? Diet programs? Computers? Software? Movies? Computer games?

In the past couple of decades, my medium-sized town has sprouted ethnic restaurants of virtually every imaginable type. Are fewer people now eating out because they're so confused?

For the sport of causing cognitive dissonance, ask Schwartz fans about books -- ask them, do you think big bookstores and libraries are worse than little ones? Do you feel overwhelmed by the choices as you walk through the shelves? Would you be more likely to buy a book, do you think, if the store carried only half a dozen titles instead of 100,000?

With 401ks, the "confusing choices" aren't there until a person makes the affirmative step of signing up for one. It's not as if there are many people who were in the process of signing up then gave up in the middle because they couldn't decide what to invest in; most of them just never bothered to begin with.

Heck, if having too many choices is overwhelming, we shouldn't be worried about 401(k) plans, where there might be a couple dozen choices. The real evil exists in libraries, where we are confronted with literally millions of options for reading material. Clearly, we need to assemble a team of experts to reduce those millions down to a manageable list of a few hundred volumes, and burn the rest. Think of the benefits of such a policy:

We'll be more productive, what with all the time saved searching for something to read. It's good for the economy!

The heat from the book-burning can be used as an energy source, reducing our dependence on foreign oil.

The now mostly vacant libraries can be converted into low-cost housing for the homeless.

Everybody wins!

There are too many ideas and opinions out there, and I find it so confusing.

Maybe Mr. Schwartz can just tell us all what to think so that we can all walk lock-step to oblivion. That will be much simpler.

There are too many websites. Please ask Congress to allow only one on the internet so I don't have to work so hard clicking.

The war against choice continues as the New York Times blames falling 401k participation on 'confusing choices' and highlights complexity as the signature feature of the prescription drug bill.

So how exactly was it that these same seniors were able to make this decision on their own when they had to find a private prescription drug plan amongst a large array of choices before Medicare Part D was created?

Schwartz is actually adding to the problem by giving us another viewpoint to evaluate. Congress should mandate that Schwartz shut up.

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