[p2p-research] Post-Depression first: Americans get more money from government than they give back | csmonitor.com

[Ryan Lanham]

On 11/25/09, Michel Bauwens <michelsub2004 at gmail.com> wrote:
>
> and were this pensions so exagerrated ... I've read articles that show how
> private corporations have raided pension funds for speculative investements,
> leaving workers high and dry ...
>
> in general, labor incomes have been stagnant for the last 30 years, only
> compensated by the entry of females in the workforce, and productivity has
> risen, so blaming workers for the current crises, (while all the evidence
> points to the fiancial system, and the credit strategies that compensated
> for income stagnation), seems really strange to me,
>
> it resembles the theories of the us right, that the blacks are to blame for
> the subprime crisis ...
>
> Michel
>


Pensions are a complex topic.  Like Social Security.  Defined benefits were
always a fantasy.  No system can afford to pay out more than it gets in plus
investment growth.  Sadly, the bankers convinced the states to implement
these programmes and then monetized the management fees (which were huge) in
expensive mutual funds, hedge funds and bond sales and trading schemes.
"Tell 'im the good news, Randolph..." if you've ever seen the Eddy Murphy
movie Trading Places.

The good news is that the bankers made tons regardless of whether the
pension schemes were realistic or not.  It was government that got saddled
with the risk.  Now that the risk has (inevitably) caused the systems to be
underfunded...the bankers point to the system and say it is greed and excess
for the retirees to get their promised benefits.  Pretty typical US politics
really.

The real question is, how do you back out of the crisis.  There is no easy
answer.  In short, you've got to pull back benefits.  But the bankers don't
like that because they don't get the guaranteed income of managing money on
behalf of the government.  Instead, people choose their investments and they
often choose low cost management products.

It's tricky stuff.  The politics are fierce because so much money is
involved.  Name calling is inevitable.  The best option of course is to
socialize it across the whole of society, but that doesn't happen in the
US.  Never will in all likelihood.  So we get complex systems that are
continuously gamed by bankers and lawyers who change the rules to suit their
current point of view.  The unions hire another set of lawyers to guarantee
their benefits.  And the lawyers then get their share.
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