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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (38972)	10/11/2005 7:56:42 PM
From: Crimson Ghost	Read Replies (1) \| Respond to of 116555

Pension Programs Must Be Funded by Ed Garvey OK, Social Security is off the table because the White House grabbed a tiger by the tail and seemed surprised when the tiger was annoyed. The lesson is obvious. Social Security is too important to seniors, their children and even their grandchildren to be destroyed. But what about pensions negotiated by unions, guaranteed by management and relied upon by millions of our citizens? I recall a wonderful Republican senator, Jacob Javits of New York. He was one of those "Rockefeller Republicans." As Gaylord Nelson is father of Earth Day, Javits was the father of pension reform. I heard him speak in 1971. He said, "When an employee works his entire life and finally goes to the window to collect his pension, it is our obligation to make certain the check is there." His bill created the Employee Retirement Income Security Act or ERISA. Millions of retired workers have been helped by Javits' vision. Not only were employers required to disclose information to the beneficiaries, they were barred from using pension funds to help their own company. A "reasonable man" standard was created, as in "What would a reasonable man do with pension funds?" And ERISA created a federal agency, the Pension Benefit Guaranty Corp. The name says it all. The federal government would guarantee pensions for that worker who walked up to the window. Yes siree! The message to unions, public and private, was simple. If you give up higher wages in return for a pension, the money will be there when you need it. Trust us. Problem: Giant employers like Northwest Airlines, General Motors or, in Wisconsin, Golden Books, didn't take ERISA seriously. They deliberately underfunded their pension programs and spent the money. The media are reporting that General Motors' spinoff Delphi is filing for bankruptcy, leaving unfunded liability, according to the New York Times, of $11 billion. Can the government pay $11 billion for thousands of workers in Michigan? Hell no. Our money has gone to Iraq. Our tax breaks have been given to the very same corporate decision-makers who deliberately underfunded their pension funds while paying themselves huge compensation packages. Their pension is truly guaranteed. Is there something wrong with this picture? This is not what Jake Javits thought we were promising. This is a perversion. So what is the plan to bail out these workers? Plan? We have no plan other than telling workers at the pension window, "Sorry, but you lose. Go get another job. And if you aren't careful we will mess with Medicare and your Social Security check as well." Where is the leadership on this travesty? Herb Kohl voted in favor of the bank-sponsored bankruptcy "reform" that will prove disastrous for working class citizens with a health problem. Is it asking too much of Sen. Kohl to take up where Jake Javits left off? How about repeal of the tax breaks for the top 1 percent and placing that money in PBGC so 65 year-old workers get their benefits? Is that asking too much? When we think about $11 billion for one company, the mind reels. Where were the regulators we relied on? Should the CEO of General Motors face criminal charges? The Wisconsin State Journal demanded in an editorial that Brian Burke go to jail for six months for violating campaign laws. Don't misunderstand me. What Burke did was wrong. But how do his violations stack up against GM? Tens of thousands of our fellow citizens who have worked hard, paid their taxes, educated their kids and trusted their government are now at the pension window and it says: "Closed. Made a mistake. P.S. Don't come back." Is this a crime or just a mistake? What would the Reasonable Man created by Sen. Javits say? Ed Garvey is a Madison lawyer, political activist and the editor of the fightingbob.com Web site. © 2005 The Capital Times