The Recession may be over (post #326)- part X

[CRM114]

The fact remains that companies slashed their pension programs and underfunded them to make their stock more attractive and to return more money to the shareholders. It's the same motivation that will ultimately drive every US corporation to lobby heavily for universal government funded healthcare.

[kvrdave]

Originally Posted by CRM114

I do live in the real world. That's the thing.

95,000 Bethlehem Steel retirees get pension payments after the company promised them and then underfunded and ultimately defaulted on their promise.

Bethlehem Steel was as "real world" as it gets. And it wasn't the pension plan that caused their demise.

No you don't. In the real world, not everyone gets pensions. That's the thing. You want one, then go work for someone that offers one. Nobody owes you a lifetime of security. Go get it yourself.

[sracer]

Originally Posted by CRM114

The fact remains that companies slashed their pension programs and underfunded them to make their stock more attractive and to return more money to the shareholders. It's the same motivation that will ultimately drive every US corporation to lobby heavily for universal government funded healthcare.

Yes, that was one way. Another was to use loopholes in ERISA to siphon funds out of those pension plans by converting them to cash balance (and then 401(K) based plans). I know that I've mentioned it before, but my employer was able to pull $400,000 out of my pension funds when converting a traditional pension to a cash balance plan. And that's just the amount for a single employee. The company was able to pull billions out in the company-wide conversion.

[kvrdave]

Originally Posted by CRM114

The fact remains that companies slashed their pension programs and underfunded them to make their stock more attractive and to return more money to the shareholders. It's the same motivation that will ultimately drive every US corporation to lobby heavily for universal government funded healthcare.

Given that they know that they will still be the ones paying for it, I doubt it.

[Dr Mabuse]

Originally Posted by kvrdave

No you don't. In the real world, not everyone gets pensions. That's the thing. You want one, then go work for someone that offers one. Nobody owes you a lifetime of security. Go get it yourself.

So after you work your entire working life for a company that does provide a pension as a promised benefit of working there, and then after you plan your life around it, work for it, then retire and they pull a 'PSYCHE!' and spend all the money and screw you into a serious financial situation in old age? Leaving you to die early with little or no healthcare benefits?

So you call that the American way and just good business?

Come on.

I get your point about the entitlement culture, believe me, but on that point in particular I disagree completely.

More and more I see this 'capitalist' rhetoric being used about the entitlement culture in the 'conservative' community being way too far reaching.

Though the big money people did manage to manipulate most of America into thinking unions are a bad thing - (to be frank I would have thought that impossible, but people are so easily manipulated by the powerful they pulled it off) that the rhetoric of today saying the things fought for and won by the labor movement are part of the entitlement culture? This is an example of how completely the minds of average people can be manipulated and controlled by the rich and the powerful, and nothing more.

I know a little bit about the very rich and their attitudes about the 'little people', the difference between the lip service they give at speeches vs. how they actually feel, etc. They would just as soon have the average Joe back in company housing working for credits at the company store in most cases.

Don't get too carried away with the 'get it yourself' stuff, the truly rich - people who can buy their own jet, that's rich, people who can open a hospital wing on a whim or etc. - can rig the game and the deck in a big way to where you can't 'get it for yourself'. That's why we had the labor movement, the game was so rigged you literally couldn't 'get it for yourself'. The rich have made great progress in doing that again here in the US. The rich are getting so much richer, at a rate and to a degree that has never happened before in the US. We are in the second Gilded Age, and the first ones were paupers compared to the big money of today. They are paying less taxes all the time, they want to pay even less, and they are getting so rich by selling this country and it's people out it's staggering.

"Cut our taxes even more and we'll throw some crumbs down to the 'little people'" is the motto of the rich in the US today. And they damn near sank our entire economy in their greed and self importance.

Some notion that the sleazy rich can promise pensions and then knowingly default on them so they can get richer? That's good business? Come on.

I can't believe so many people in the US today say such ridiculous things about the rich paying too much in taxes and etc. These are people that, shy of an unusually large Powerball win, will never join the ranks of the wealthy. Yet they act like cheerleaders for this stuff. It's kind of mind blowing.

[CRM114]

Originally Posted by kvrdave

No you don't. In the real world, not everyone gets pensions. That's the thing. You want one, then go work for someone that offers one. Nobody owes you a lifetime of security. Go get it yourself.

Sure. This is what we have become. That is the point and now millions of people who have lost their retirement accounts will need public assistance even more.

[CRM114]

I am in 100% agreement with Dr Mabuse and post 105.

[crazyronin]

The PBGC has an 11.2 billion dollar deficit.

[kvrdave]

Originally Posted by Dr Mabuse

So after you work your entire working life for a company that does provide a pension as a promised benefit of working there, and then after you plan your life around it, work for it, then retire and they pull a 'PSYCHE!' and spend all the money and screw you into a serious financial situation in old age? Leaving you to die early with little or no healthcare benefits?

Nooooo, you have no right to a job that offers a pension to begin with. If you get one, great. But we aren't entitled to one and companies are in no way obligated to offer these.

[slop101]

His point, I believe, was that if you DO happen to have a job that offers a pension and then they renege or squirm out of it through a loophole, then you can call dirty pool. But I guess if that happens, you should have it in writing and then you'd have a good case to sue.

[parrotheads4]

Originally Posted by Dr Mabuse

I know a little bit about the very rich and their attitudes about the 'little people', the difference between the lip service they give at speeches vs. how they actually feel, etc. They would just as soon have the average Joe back in company housing working for credits at the company store in most cases.

Don't get too carried away with the 'get it yourself' stuff, the truly rich - people who can buy their own jet, that's rich, people who can open a hospital wing on a whim or etc. - can rig the game and the deck in a big way to where you can't 'get it for yourself'. That's why we had the labor movement, the game was so rigged you literally couldn't 'get it for yourself'. The rich have made great progress in doing that again here in the US. The rich are getting so much richer, at a rate and to a degree that has never happened before in the US. We are in the second Gilded Age, and the first ones were paupers compared to the big money of today. They are paying less taxes all the time, they want to pay even less, and they are getting so rich by selling this country and it's people out it's staggering.

"Cut our taxes even more and we'll throw some crumbs down to the 'little people'" is the motto of the rich in the US today. And they damn near sank our entire economy in their greed and self importance.

I agree with this.

I remember Alan Greenspan being quoted in the Wall Street Journal in 1997, "Alan Greenspan sees one of his main jobs as being to maintain a high enough level of "worker insecurity" that employees won't demand pay raises and benefits increases, thus provoking "wage inflation." ("CEO inflation" is fine with the cons.) "

[68ShelbyGT500KR]

The CBS/60 minute pieces
http://www.cbsnews.com/video/watch/?id=4955194n
http://www.cbsnews.com/video/watch/?id=4955235n

[CRM114]

Originally Posted by kvrdave

Nooooo, you have no right to a job that offers a pension to begin with. If you get one, great. But we aren't entitled to one and companies are in no way obligated to offer these.

Of course you don't. You don't have the right for a job either. But that is beside the point. 401k's were designed to be supplemental to pensions (which were very common at one point) and social security. Now millions have suspect and risky 401ks that they manage as a novice and social security. Now that people have lost their retirements, all they have is social security (which Republicans would like to do away with as well).

[wishbone]

401(k) Losses: Who’s To Blame

60 Minutes, the CBS Sunday news show, recently did a story entitled “Retirement Dreams Disappear With 401(k)s”. Here’s a brief excerpt:

Trillions of dollars have evaporated from those accounts that have become the prime source of retirement funds for a majority of American workers, affecting their psyche and their future. If you are still young enough, there’s time to rebuild and recover, but if you are in your 50s, 60s or beyond the consequences can be dire, and its drawing attention to the shortcomings of a retirement system that has jeopardized the financial security of tens of millions of people.

So, who’s to blame? Is it really the retirement system?

NO…absolutely not. 401(k) and IRA plans are not the problem. They are simply “baskets” that can hold whatever investment you choose…tax-deferred or tax-free, until retirement age. (You have probably seen the depiction of retirement funds…”nest eggs”, in a basket.)

The real blame goes to…guess who? Wall Street and Uncle Sam. What a surprise!

Unfortunately, the investigative piece from 60 Minutes doesn’t drill down far enough to uncover the truth.

The story never points out that according to a Congressional Act passed in 1974 (ERISA - Employee Retirement Income Security Act), you can invest retirement funds into anything except life insurance contracts and collectibles.

In other words, with your “basket”, you could be investing in real estate, tax liens, mortgages and notes, precious metals, equipment leasing, businesses and much, much more.

The 60 Minutes report focuses only on investing in securities (stocks, bonds and mutual funds). Why is that? Actually it’s quite easy to understand…just follow the money.

Ever since ERISA went into effect, the “Wizards of Wall Street” have been relentless in their pursuit of those trillions of investment dollars. And, they have done a tremendous job of convincing people that the only choices they had for retirement investing was into their products. And, to top it off, Uncle Sam hasn’t done one single thing to correct the misconception.

Employers are also generally unaware of what ERISA really says, and what investment choices are available. They too, have trusted the plan administrators who have operated in concert with Wall Street to limit choices to mostly mutual funds. So, in reality, employers have given their employees no choice at all.

After reading the entire 60 Minutes report, it will be abundantly clear that YOU…THE INVESTOR have always been on the short end of the stick. No one is watching out for your best interests. And, the rules of the game have always been slanted in favor of those who would seek to make as much money off your retirement funds as they possibly could.

The “smarter than everyone else” brokers and bankers knew that by creating a very complex investment system, you would be overwhelmed and simply defer to their “better judgment”. And, we all know that the “Wizards of Wall Street” really do know how to confuse and deceive people…even themselves and the ones who were supposed to be regulating them.

http://www.ira123.com/2009/04/21/401...whos-to-blame/

excerpt

Not all employer plans are subject to ERISA. For example, governmental retirement plans are exempt from ERISA requirements. Also, non-qualified plans, which do not qualify for tax-deductible contributions, are not subject to ERISA. These plans are discussed in detail in the within following section. IRAs are not subject to ERISA, since an IRA is not considered an employer plan.

http://www.investopedia.com/exam-gui...isa-issues.asp

It will be interesting to see if businesses, Wall Street, and our government's roles are looked into beyond this 60 Minutes report.

[kvrdave]

Originally Posted by CRM114

Of course you don't. You don't have the right for a job either. But that is beside the point. 401k's were designed to be supplemental to pensions (which were very common at one point) and social security. Now millions have suspect and risky 401ks that they manage as a novice and social security. Now that people have lost their retirements, all they have is social security (which Republicans would like to do away with as well).

Sounds like the only solution is for others to take care of us. Businesses got rid of pensions to save costs which allowed them to better compete in the marketplace. And people were willing to work for those companies. I just don't see what the problem is. If you don't like a 401k plan, a person doesn't have to put into it. If they think of themselves as novices and that they are risky, they can just buy CDs instead.

[al_bundy]

Originally Posted by CRM114

Of course you don't. You don't have the right for a job either. But that is beside the point. 401k's were designed to be supplemental to pensions (which were very common at one point) and social security. Now millions have suspect and risky 401ks that they manage as a novice and social security. Now that people have lost their retirements, all they have is social security (which Republicans would like to do away with as well).

actually 401k's are an accident

in the late 1970's some company found a flaw in the ERISA law and started a retirement plan for it's employees which we now call 401k's. named after the section in the law.

before that you either worked for a large company that maybe had a pension, or like a lot of people you saved on your own with after tax money and no tax benefits

[classicman2]

David Kellermann, the acting chief financial officer of Freddie Mac, was found dead at his home Wednesday morning in what broadcast reports said was an apparent suicide.

[CRM114]

Originally Posted by wishbone

http://www.ira123.com/2009/04/21/401...whos-to-blame/http://www.investopedia.com/exam-gui...isa-issues.asp

It will be interesting to see if businesses, Wall Street, and our government's roles are looked into beyond this 60 Minutes report.

You sort of missed the point of the piece. The point is that these 401(k)'s were foisted upon an unsuspecting public who have by and large no ability to make proper investments. Real estate, metals and notes would only increase the complexity and people would lose even more money to those who understand those markets.

[foggy]

Originally Posted by kvrdave

Sounds like the only solution is for others to take care of us. Businesses got rid of pensions to save costs which allowed them to better compete in the marketplace. And people were willing to work for those companies. I just don't see what the problem is. If you don't like a 401k plan, a person doesn't have to put into it. If they think of themselves as novices and that they are risky, they can just buy CDs instead.

It must be pretty easy to be flip and cavalier about other people's problems when your spouse works for the government and has free or nearly free health insurance and a guaranteed pension.

If being competitive in the marketplace is the only consideration, why not abolish OSHA and the EPA and allow slave labor. Those would all save on costs. I personally think that a 401(k) is a viable vehicle for retirement savings, but only on a supplemental basis.

[Red Dog]

I agree with kvrdave and I don't have a spouse who works for the government with free health insurance and a guaranteed pension.

[orangecrush]

Originally Posted by Dr Mabuse

Don't get too carried away with the 'get it yourself' stuff, the truly rich - people who can buy their own jet, that's rich, people who can open a hospital wing on a whim or etc. - can rig the game and the deck in a big way to where you can't 'get it for yourself'. That's why we had the labor movement, the game was so rigged you literally couldn't 'get it for yourself'.

I would venture to say that there are more self made rich (not buy a jet rich, but 2-3 homes, no worries rich) people today than in the hey-day of the blue collar middle class. Most of them don't become rich by working for other people though.

[Iron Chef]

Originally Posted by classicman2

David Kellermann, the acting chief financial officer of Freddie Mac, was found dead at his home Wednesday morning in what broadcast reports said was an apparent suicide.

It's nice to see at least one bank exec not afraid to do the right thing.

[Dr Mabuse]

Originally Posted by orangecrush18

I would venture to say that there are more self made rich (not buy a jet rich, but 2-3 homes, no worries rich) people today than in the hey-day of the blue collar middle class. Most of them don't become rich by working for other people though.

Well... yeah man.

That was my point about the gift of the labor movement. I though the implied benefits we have today were self evident. Though they are being whittled away by the wealthy and powerful.

By the way there are many self made millionaires today. But not so many self made "rich". And the average self made millionaire isn't a multiple home buying big spender.

You might read a book - 'The Millionaire Next Door' on this topic. It's a good read.

[orangecrush]

Originally Posted by Dr Mabuse

Well... yeah man.

That was my point about the gift of the labor movement. I though the implied benefits we have today were self evident. Though they are being whittled away by the wealthy and powerful.

By the way there are many self made millionaires today. But not so many self made "rich". And the average self made millionaire isn't a multiple home buying big spender.

You might read a book - 'The Millionaire Next Door' on this topic. It's a good read.

It was already on my list

[kvrdave]

Originally Posted by foggy

It must be pretty easy to be flip and cavalier about other people's problems when your spouse works for the government and has free or nearly free health insurance and a guaranteed pension.

It is a different world today, man. Because of how expensive pensions have become and how they are getting close to bankrupting states, they have been retooled several times. As a result, my wife's "guaranteed pension" is nearly nothing and employees are forced to also put 5-15% of their check into their own retirement. The result is that my wife only gets out what she puts in and the state puts up $354 a month towards her retirement on a salary of about $50,000. It is less than a ROTH would be.

As for nearly free health insurance, we have $628 per month taken out.