Foyd Norris offers a useful reminder that public pensions aren't the only ones in trouble: private employers, too, are busy stiffing their lifers and loyalists as fast as they can. It's a useful summary, and my guess is that it spotlights at least one reason why some segments of the electorate get so bitter about the thought of having to bail out the public sector: we're not getting ours, why should they get theirs. As an aside, I'd venture that the same sense of discrimination may explain (some of) the hostility to public employee unions, but leave that one for another day.
The only thing really odd about the Norris piece is that he never points out how this tradition of greed and betrayal is nothing really new: employers have been stiffing the the pension plans since there first were pension plans. It's the capitalist corollary to the corrupt union bosses who looted their union-sponsored funds although I don't recall the great and good getting nearly so upset over the management promise-breakers as they did over the labor looters. To my recollection, the pension-reform issue that most excerised the greedy bosses was the matter of balance-sheet reporting: put our true iiabilities on the balance sheet and disaster will follow! For the gods; sake, don't make us tell the truth!
But I digress. Here's a chart (H/T USNews), now three years old, of the 10 largest fund failures in history up to that time. I note that four out of the ten are steel: once the monarch of American industry, it's the monarch that never learned to keep up, that stood by paralyzed while the market changed and its protected central position disintegrated through its fingers.
The other is, of course, airlines, of which we could say "legacy carriers"-those who never learned how to adjust to the new world of airline degregulation. Idle thought, could it be that the greatest enemy of the union movement in the post-war period was our greatest modern Republican president, Jimmy Carter?
The only thing really odd about the Norris piece is that he never points out how this tradition of greed and betrayal is nothing really new: employers have been stiffing the the pension plans since there first were pension plans. It's the capitalist corollary to the corrupt union bosses who looted their union-sponsored funds although I don't recall the great and good getting nearly so upset over the management promise-breakers as they did over the labor looters. To my recollection, the pension-reform issue that most excerised the greedy bosses was the matter of balance-sheet reporting: put our true iiabilities on the balance sheet and disaster will follow! For the gods; sake, don't make us tell the truth!
But I digress. Here's a chart (H/T USNews), now three years old, of the 10 largest fund failures in history up to that time. I note that four out of the ten are steel: once the monarch of American industry, it's the monarch that never learned to keep up, that stood by paralyzed while the market changed and its protected central position disintegrated through its fingers.
The other is, of course, airlines, of which we could say "legacy carriers"-those who never learned how to adjust to the new world of airline degregulation. Idle thought, could it be that the greatest enemy of the union movement in the post-war period was our greatest modern Republican president, Jimmy Carter?
3 comments:
"I note that four out of the ten are steel: once the monarch of American industry, it's the monarch that never learned to keep up, that stood by paralyzed while the market changed and its protected central position disintegrated through its fingers."
It is not coincident that the steel industry is cited by most Economics departments as a Success Story.
Your recollection, btw, is correct. General Motors, for one, complained that allocating its pension obligations with some degree of accuracy would cost it about $1B, at a time when that was still a lot of money for one of the world's largest corporations.
The result was that they were given 20 years to get their pensions up to snuff. Which they promptly spent paying themselves large amounts of money for not doing their job.
But that's a side discussion, perhaps.
There are four candidates for greatest modern Republican president: Richard Nixon, Jimmy Carter, Bill Clinton, and Barack Obama.
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