I was still in a union when the UAW negotiated 30 and out. Wow was that ever a union victory. 30 years on the assembly line and the UAW guy goes out with a full pension. My friend Herb Lerner a mathematician by hobby said, “Sure as we’re sitting here having lunch this’ll bankrupt GM.” “Herb” I said, “they must have actuaries who have figured this out.” And so it went. GM will never fund this sufficiently to pay the millions, no billions that this will cost down the road.
I must confess there was an attitude at the time that implied, “heah we don’t know where they’ll get the money from but that’s there’s. “the Robber Baron’s problem,” not ours.” Even the lefties at that time in the Labor Movement seem to express that same sentiment. We may have known in our hearts that they can’t afford it but that’ll be their problem not ours. Anyway thats years away so why worry about it. Funny thing that happened on the way. I’m one of the very few who is still around to see the train crash from those heady days. Pension funds are running out and the victims are being blamed for the crash. Yupp, the Media folks are ringing their hands because, “these public employees are bankrupting the States.”
So what is going on here? First of all the Public Employee unions negotiated what every employed person in the country wants. a decent old age pension to assure them a place outside the Welfare Line. These promised Pensions have been underfunded from the start. Meaning there never was a serious effort to set aside enough money for the pension pay-out. Many of the States assumed a minimum of 8 percent on there Funds Investment. Other States ran Ponzi schemes assuming there would always be enough people working and their contributions would keep the funds available for the retirees. Other Pension Funds made heavy if not all investments in the “booming” stock market. Of course when the bubble busted the Pension Funds went into the toilet. No not those financing the funds the major banks and Investment Companies. They did and are doing just fine. Let me back up here a little.
The Republicans who started us down the road to bankruptcy are now claiming that it is the fault of overpaid and over pensioned Public Employees. Oh how we suffer from social amnesia. So let me remind us. For 8 years of George W. Bush there was a saying around the Washington GOP members of Congress called, “Starving the Beast.” (My Friend Elaine often reminds me of the strategy behind that saying.) Translated it meant lets spend the Country into bankruptcy and guess what? There wont be a lead nickel for any social programs that the Dems. might want to enact. That is exactly where we are now. Must concede, “Starve the Beast” has worked. Now we have the spectacle of blaming the Public Employees because their Pension Funds are bankrupting the States. That’s like asking, “who killed the chickens after we put the Weasel in the Hen House?
What I find fascinating is how these same folks can sit and watch the banks be awash in recently reported profits and not find them culpable in the Pension crisis. Who exactly were the people who were managing, advising, investing Pension money? Same bunch again who the Government bailed out after the economic meltdown of the 80s. My dear long departed father had a saying, “no matter how bad things get you can always count on the top bankers and investment houses will come out on top.” His favorite back then was Rockeffeller’s Standard Oil. My favorite now is Goldman Sachs. They always seem to come out smelling like roses. Thanks papa for reminding me. It is not the fault of the people who wanted what all the folks at Goldman Sachs take for granted.
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