> The losers are the folks who are having the 401K
> purchases deducted from their paychecks. 401K's turned out to be a
> long-range plan to loot the middle class. Don't believe for one minute
> that the huge losses in retirement accounts are accidental or were not
> predictable The "stock market collapse" is the biggest shift of wealth
> from the middle class to the ultra-rich in the history of the world."
Looting it may be, but the price drop is not how the looting happened. For one thing, 401(k) fund managers take a percentage of the funds under management, so if the fund's "investments" drop, the fees drop too. The fund managers therefore would prefer that e.g. the stock market never went down. In general, almost no one gains when the stock market drops; as long as prices keep on going up the Ponzi scheme can continue and there is more money to be made. (The government propping up bank bondholders is another instance of looting on a giant scale.)
Money "invested" in the stock market is almost never used for actual investment purposes (say, buying new machinery for a factory), nor does the amount of "stock" available grow much. Mostly it's just swapping around ownership, rather than using the money to create anything new. Someone who is *selling* stocks they own -- whether the original owners of what used to be a private company, managers who got stock options, or someone who bought it second hand -- can use the resulting money to do something useful. And it's "resource allocation" only in so far as it determines *theoretically* how much the company owners would give up to raise more equity, if they ever did. Which mostly they don't, at best the managers give themselves more ownership tokens.
The main purpose of the stock market for the ultra rich is to provide liquidity for their holdings; they have no vested interest in a crash, though they would obviously want to sell first if they expected one. Providing the illusion of ownership to the masses may be another use, but again, no vested interest in a crash. Some small number of companies use it to raise money to do something actually useful, e.g. biotech startups. Again, no interest in a crash.
(Everyone interested should, of course, read http://www.wallstreetthebook.com/).