TCS Daily


Decrying the Union Pension Bailout Bill

By Diana Furchtgott-Roth - April 8, 2010 12:00 AM

Some members of Congress seem to like putting taxpayers on the hook for practically unlimited liabilities. The latest Congressional Budget Office forecasts 2020 public debt climbing to 90% of GDP under President Obama's 2011 Budget. This is not enough for Senator Robert Casey, a Pennsylvania Democrat and habitual ally of labor, who now wants Americans to bail out union pension plans underfunded by hundreds of billions of dollars.

Following on the healthcare model, it's all part of a political calculus in which Washington politicians try to buy votes today for the next election with money that Uncle Sam won't have to spend until afterwards. It is Pennsylvania's other Senate seat that is to be filled this November, but Mr. Casey, a first-term senator elected in 2006, appears to be looking ahead to 2012.

Mr. Casey's bill, the Create Jobs and Save Benefits Act of 2010, is similar to that of Representatives Earl Pomeroy, a North Dakota Democrat, and Patrick Tiberi, an Ohio Republican, who seek to bail out pension plans with their proposed Preserve Benefits and Jobs Act of 2009, introduced last fall.

Under these bills, the Pension Benefit Guaranty Corporation would, at the request of the plans, have the authority to take over the pension obligations of employers who have withdrawn from the plans, and pay the benefits out of taxpayer dollars. Once the PBGC shoulders that obligation, it would keep making payments until the last retiree or designated survivor dies.

Since many multiemployer plans are in financial difficulty, this legislation, if enacted, could dramatically increase the federal deficit, putting even more pressure on the American taxpayer and the economy. Depending on events, it might add billions to government spending-current underfunding levels are estimated at $165 billion-bumping up future deficits.

Unions prefer multiemployer defined-benefit plans to allow workers to keep pensions if they change jobs to another participating company in the same industry. Such plans have the effect of keeping workers in unionized jobs in the same industry for most of their working lives, contributing both to defined benefit funds and to unions' security.

Multiemployer plans are more commonly underfunded than non-union plans. In 2006, even before the market crash, 6% of multiemployer pensions were fully funded, compared with 31% of single employer pensions.

Why the persistent underfunding? Some union leaders like to achieve wage increases and new benefits when they renew collective contracts, in order to make their reelection more likely. Ensuring that pension plans are kept well-funded takes more work for little visible effect-and may well work against winning more benefits by underscoring their cost to the employer.

Congress (through the Pension Protection Act of 2006) considers funds with less than 80% of needed assets to be in "endangered" status, and those with less than 65% to be in "critical" status. Every year more failing plans, as well as plans who applied to delay their remedial strategies, are listed on the Labor Department's Web site. The list has grown from 230 pension plans in 2008 to 640 at the end of 2009.

Under the Casey and Pomeroy-Tiberi bills, some underfunded plans would be shifted to taxpayers. But it's a vicious circle: once PBGC took over some plans, other employers would want to declare bankruptcy, unload plans on the PBGC, and reorganize under another name. The incentives to do this would be enormous, because companies bailed out by the PBGC would be free of onerous pension obligations and hence would acquire a competitive advantage.

Both House and Senate bills would allow failing multiemployer pension funds to form alliances and merge where such mergers would reduce PBGC's losses. Plans that have been financially prudent could lose, because they could be merged by PBGC with failing plans, with PBGC funding failed plans.

By bailing out the plans, Congress would be compromising the remedial provisions of the Pension Protection Act of 2006. The Act requires underfunded pension plans to put their houses in order by raising retirement ages; increasing contributions by employers, workers, or both; and lowering benefits. A bailout would remove any incentive for multiemployer pension plans to reorganize their plans responsibly.

Neither bill has been voted out of committee and reached the floor of the House or the Senate, nor have hearings been held. However, the bills have generated support from unions and employers. Unions want to be free of pension obligations so that they can focus on higher wages in future contracts. Employers seek to avoid continuing and possibly higher contributions.

Last fall Moody's estimated that multiemployer plans were underfunded by at least $165 billion, and concluded that "The ballooning of the under funded status of these funds has substantially increased the implied liability for contributing companies in the industries affected." Some companies risk having their ratings downgraded, especially if weaker companies become bankrupt and leave the pension plans.

Hence, a coalition of liberals and conservatives might pass the bills and send one to President Obama's desk for a likely signature, given his frequent support for unions, one of his most important constituencies.

With deficits stifling the economy, making the taxpayers, already in trouble themselves, pay for underfunded pensions is manifestly unfair. Multiemployer pension plans were in trouble well before the latest recession, even at stock market heights of 2006-2007. As employers and unions had reason to know from the beginning, many firms have too few young workers, too many old workers, life spans are lengthening-and contributions by both sides were predictably inadequate.

Yes, Mr. Casey's Create Jobs and Save Benefits Act would save benefits for workers and retirees. But spending billions of taxpayer funds on failed pensions would swell the deficit still further, harming the economy and destroying jobs rather than creating them. Exactly how much mismanagement by employers and union leaders must the taxpayers underwrite?


This article first appeared on Real Clear Markets.

Diana Furchtgott-Roth is a contributing editor of RealClearMarkets and an adjunct fellow at the Manhattan Institute.

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37 Comments

The only honorable solution
The problem of course is not with the PBGC ponying up to pay legitimate debts on which employers have welched. That's why the corporation was set up.

The problem was with so many years of nonenforcement, when one after the next employer saw he would be able to stop making employer contributions, without any penalty for nonperformance.

Now that we're here, what do we do? To the extent that the obligations sitting in the US Treasury are my own obligations, I think I have a say in the matter. And I say, pay the benefits. All those people gave their time to the companies they worked for over an entire career, in return for certain guarantees. And when they reach retirement age, those guarantees should be honored.

Should anyone have to pay for their misdeeds? Of course. I think any company that allows its obligations to be paid by the federal government should be taken over by that government. And managed at a profit if possible. But if not, stripped for parts and sold off.

And why should it be the federal government that has to pay? Easy. They were the ones who caused the problem, through many years of knowing nonenforcement. They were supposed to have required those companies to meet their obligations back when they first began to lapse. It's known as reg-u-lation.

Naturally, most of you will have no problem with the dumb workers being the ones getting it in the behind. They should have known better than to trust their employers to ever pay up as promised.

Funny.
As I read this article, I thought to myself, who besides these union politicians would support this bill, which openly, overtly, unjustly, and unashamedly tries to shift the responsibility for these broken promises from the two parties that are responsible (unions and corner-cutting corporations) to an innocent third party (the taxpayers)? Well, clearly the two guilty parties approve, because they don’t want to face the music, but who on earth would go along with it, besides them? Then I thought of Roy. And wouldn't you know it - the first post is Roy, singing the praises of this swindle.

>”Should anyone have to pay for their misdeeds? Of course. I think any company that allows its obligations to be paid by the federal government should be taken over by that government. And managed at a profit if possible. But if not, stripped for parts and sold off.”

Managed at a profit. By the government. (For the sake of argument, I will refrain from pointing out the oxymoronic nature of this statement, and pretend that could actually happen.) Now, is that a profit with or without the weight of an underfunded pension plan? Because if you remove the pension plan burden, most of these companies would be quite profitable. So, if you are going to do honest accounting (and count the pension payments as part of the corporations costs, regardless of whether it is run by private CEOs or government hacks, then there is no way in hell the government is going to run it at a profit. So, you are left with bankruptcy - stripped for parts and sold off - which is exactly where you stand without this bill. The only way this bill would save any companies is by paying their debts for them, with money from taxpayers’ pockets.

>” And why should it be the federal government that has to pay? Easy. They were the ones who caused the problem, through many years of knowing nonenforcement. They were supposed to have required those companies to meet their obligations back when they first began to lapse. It's known as reg-u-lation.”

By that logic, if Mr. Jones steals Mr. Smith’s life savings, it is the government’s fault, because they did not fully enforce the laws against theft. So, the government should pay for the losses. Of course, the government gets its money from you the taxpayer, so ultimately, you are on the hook.

If only things worked that way. We could all shift the blame (and consequences) for everything. Of course, it doesn’t work that way, because we intentionally (rightfully) limit such blame shifting. Next time you hit a pot hole, (even one which the city knew about, but did not fix) try suing the city for damages to your car. You’ll soon find that the city has immunity. And even if they didn’t, and you could sue the city for damages, would you REALLY want to shift the cost of your action onto all the other citizens?

How easily the government becomes “they”. Especially if “they” do something we don’t like. Unfortunately, when you say the government has to pay all these pensions, “they” is really “us”. And I am not responsible for any underfunded pension plans, any more than I am responsible for Mr. Jones stealing from Mr. Smith.

So, who is responsible? Who should pay the price? You know already. We all do. As you said, those “dumb workers…should have known better than to trust their employers to ever pay up as promised.” Sad, but true. The companies are responsible for making promises they can't keep, and the workers are responsible for believing them. But we, the taxpayers, are not responsible for either.

Any promise is only as good as the people giving it. And if you are going to give your labor today for a promised reward 30 years from now, you are obviously taking some serious chances. The promiser may not even exist in 30 years. And who knows if he promised to deliver the same money to somebody else 20 years from now?

Unfortunately, our government is playing the same game. We have promised everything to everybody, and it won’t be long till our government will be the one reneging on their promised payments. And who will bail them out? We will, if they can make us. Welcome to the modern age of involuntary servitude.

PS. You argue that the problem is a lack of enforcement – these companies should be forced to pay their obligations. And yet, the proposed legislation is just the opposite. Under this legislation, companies that do not (and did not) properly fund their pension plans are to be given a handout, a reward, for their failure to follow reg-u-lations. That is your answer to a lack of enforcement? Does this legislation amount to anything other than abandonment of enforcement, and rewards for those who don’t comply?

ERISA, and government responsibility
Funny how different things can appear when seen from the outside, as opposed to the inside.

Back in the days when our economy was actually strong and growing, employers saw a shortage of skilled career employees-- people who could lift their bottom line. So they bid up what they were offering to have these jobs filled.

That meant they found it useful to offer high wages and generous benefits. And one benefit the best workers found attractive was a jointly funded retirement plan. One where the employee and employer both contributed a part.

But it came to pass that once Reaganomics became the law of the land, the employers saw they no longer had to match employee contributions. No one was there to tell them they were out of line. So they let these plans lapse. Many of them began to fall apart, and the government just set up the PBGC to fill the gap, a clear handout to the corporations, instead of policing retirement plans and prosecuting for mismanagement.

Now the PBGC's exhausted, and there are still workers retiring who are getting stiffed. And the point is, this was an agreement, just like any other contract. They agreed to work, the company agreed to pay them. To welsh on a legitimate debt like this would be the same as deciding they weren't going to pay the agreed wages. One week you get your paycheck and it's down to minimum wage. Or they tell you "times are tough, we can't afford to pay you any more".

To which all you have to say is "who besides these union politicians would support this bill, which openly, overtly, unjustly, and unashamedly tries to shift the responsibility for these broken promises from the two parties that are responsible (unions and corner-cutting corporations) to an innocent third party (the taxpayers)? Well, clearly the two guilty parties approve, because they don’t want to face the music, but who on earth would go along with it, besides them?"

The government was at fault. They were a guarantor of the system. For that reason they have to pay. There was a contract between employer and employee (I assume you are in favor of enforceable contracts?), and it was guaranteed by the government in a similar way any other contract in this country is-- that is, it is enforceable by law.

Thus the government became involved, in passing a law known as ERISA.

http://en.wikipedia.org/wiki/ERISA

So it's not just the renegade companies who are at fault. It's the government, for enacting and then failing to enforce this body of law. And so, payment has to come from one of the responsible parties.

The first responsible party is the company, of course. But if they just don't have the money it falls to the second responsible party, the guarantor.

IN NO WAY is there any complicity on the part of the unions in this broken promise. Their members paid in all those years, in good faith.

Read up on ERISA. And then tell me if you don't see this in a clearer light.

You say "That is your answer to a lack of enforcement? Does this legislation amount to anything other than abandonment of enforcement, and rewards for those who don’t comply?"

The lack of enforcement was historical. I objected ludly then, and there's nothing to be done about that now. It happened.

The government was at fault, so now they have to pay. Naturally the companies were primarily at fault. But they've skipped out on the check and they're unlikely to be pursued. So yes, there is a HUGE implicit reward in all this. Taxpayer bailouts invariably involve gifts squeezed from the working class taxpayer and awarded to noncompliant businesses.

And we knew all this many years ago, back when it was on all the front pages.

Let me close with a question. Suppose you put a million bucks into some bank and then the bank decides it has to fold. You're out the money. Only the government decided back in 1933 that you shouldn't get stiffed that way. So they insured the deposit for your protection. And you get $100K back from them, as that's the amount they have defined as being their responsibility.

It's a government award to the bank, implicit in their taking over the debt to the customer. But is it fair? Are you going to take the money, or refuse it?

The only difference is that the FDIC rules still work, while our reliance on a bankrupt PBGC no longer works. So Congress has to redefine government's responsibility in the matter.

As an example to the others
You make a good point here:

"Managed at a profit. By the government. (For the sake of argument, I will refrain from pointing out the oxymoronic nature of this statement, and pretend that could actually happen.) Now, is that a profit with or without the weight of an underfunded pension plan? Because if you remove the pension plan burden, most of these companies would be quite profitable. So, if you are going to do honest accounting (and count the pension payments as part of the corporations costs, regardless of whether it is run by private CEOs or government hacks, then there is no way in hell the government is going to run it at a profit. So, you are left with bankruptcy - stripped for parts and sold off - which is exactly where you stand without this bill. The only way this bill would save any companies is by paying their debts for them, with money from taxpayers’ pockets."

Quite so. The businesses in question reneged on their contract promises on the grounds that they might go under if required to comply. And that might very well be true.

But a debt is still a debt, even if it is only to their employees. So punishment is in order. If they are freshly burdened with the full amount of their unfinded obligations and can't make ends meet they deseve to go under-- as an example to the others.

Then maybe in the future companies will think twice before stiffing their workforce. And maybe shareholders will think twice before investing in a company that flagrantly shirks its obligations.

It's all about responsibility. We're getting far too used to there being crimes without consequences. This is the same as the recent great crimes of the financial industry-- when the perps get to walk away with their bonuses while taxpayers pay the bill for them, no lesson is learned other than that impunity pays.

We still have the underlying theme of your comment, that it would be unfair to burden a business with the need to fulfill legal promises made to its own employees. I'd like to see you expand on that message, that contracts shouldn't have to count for anything, depending on how convenient they are.

Holding their feet to the fire
"By that logic, if Mr. Jones steals Mr. Smith’s life savings, it is the government’s fault, because they did not fully enforce the laws against theft. So, the government should pay for the losses. Of course, the government gets its money from you the taxpayer, so ultimately, you are on the hook."

If Mr Jones was not known to be a thief there would be no liability. But let's say it's not Mr Jones but Mr Madoff. And let's further say that the SEC was informed fully about his activities ten years before he was finally found out by the world at large. THEN there would be liability.

And I think the principle should be upheld, that the government be held to strict account and punished for its actions by the voters. Even as it is underwritten by the same people, its taxpayers. Because only then will it shape up and do the job we demand of it. And only then will we get worked up enough to demand good government.

Punishment swift and certain. It's good for the soul.

Closer than I thought, perhaps
We are probably much closer on this than I thought.

Yes, the corporation is at fault if they are not living up to their contractual obligations. So, what should happen then? The same thing that happens to other corporations that don't pay their bills - they go into bankruptcy, and their assets are sold. The proceeds then go to their various creditors, as determined by the bankruptcy court. If I'm not mistaken, the last person in line to get any proceeds is the stockholder. I don't know enough about bankruptcy laws to know who is first in line, who is second, etc. If K-Mart goes bankrupt, who gets paid from the sale of existing assets? They would owe a lot of people money, from suppliers to truck drivers to full time management to part time employees. Exactly where do employees fit in that hierarchy? Where does a pension plan fit in? I don't know.

But I am convinced of this much - it would be wrong to force a third party to pay the bill.

Yes, the government should enforce the law. They should have done so before, and they should do so now. I don't see any sense in saying that since they didn't enforce it before, therefore they need to quit trying now, and simply pay damages. They cannot pay, anyway. The only thing they can do is pass the cost on to others - taxpayers. Are you arguing that since the government did not enforce the law, therefore we the taxpayers should be held responsible?

That is not justice - that is "whoever has the deepest pockets, with the least protections, pays". We both agree that the corporation is responsible, and if they had the money, you would make them pay (regardless of what the government had done or not done). But since they don't have the money, you look to implicate somebody else with deep pockets. How about the government? They should have prevented this, so they are complicit. But they don't have any money of their own either. They government does not have deep pockets in any true sense. BUT they do have long, strong arms, and sticky fingers, and they are good at taking things from other people's pockets. So, they could be a convenient solution to the problem. If we temporarily forget about justice, and use the tax collecting powers of the government to make good on the promises made by the corporation, everything works out, right?

No. Everything is not alright, for several reasons. 1) The power to collect taxes was granted to the government, by the people, for a specific set of purposes, and stretch those purpose to such frivolous ends is an abuse of that power. 2) Not only is it an abuse of power, it is a travesty of justice. And once you decide that justice is expendable, for the sake of expediency, you've wondered into territory where I don't care to follow.

That's a sensible approach
Taking delinquent companies down the road to bankruptcy though would be precedent-setting. If you took a large corp into court claiming that their obligations under the contributions clause were binding and unmet, they'd tie it up in court for years, inconclusively. That's how the law works with the major corps.

And then even if the case was won it would eventually end up in the Supreme Court. And get overturned 5-4.

I'd love to see the government go down that road though, and give it their best shot in federal court. But in the end I'm thinking the taxpayers will still end up owning the debt. Or wait, that's not quite right. It would be the people holding Treasury notes who end up having to pay.

Or wait. That's not even the case. It would be the people holding US dollars in their billfold. Each dollar would shrink a little bit, as we add another trillion in debt.

I like your last paragraph though. It's nothing if not a travesty of justice, where the powerful and guilty get away with something, and the little guys with shallow pockets have to pay the difference. But answer me this: which is the greater travesty? The one where the people who've put a lifetime of service into a company have gotten stiffed on their guaranteed retirement plans, and America fails to come to their aid? Or the one where our taxes have to be spent on yet another unfunded mandate?

We need to destroy the unions, not prop them up
We do it right out of the Dem class-warfare playbook, too.

1) Add a 50% surtax on union wages that is collected immediately by withholding.

2) Allow union members to quit the union by simply providing a sworn affidavit saying so to both the union and the employer.

I predict that most unions will fall apart within two months of this. No more unions, no more campaign cash going to ObamaCrats. No more ObamaCrats, no more foisting the costs of these government/union screw ups on to the rest of us.

Show me where it says in the Constitution that you are entitled to a job -- let alone a 'union job'.

Who gets paid?
"If I'm not mistaken, the last person in line to get any proceeds is the stockholder. I don't know enough about bankruptcy laws to know who is first in line, who is second, etc. If K-Mart goes bankrupt, who gets paid from the sale of existing assets? They would owe a lot of people money, from suppliers to truck drivers to full time management to part time employees. Exactly where do employees fit in that hierarchy? Where does a pension plan fit in? I don't know."

I had to look up that question for a friend, who retired from United Airlines (a famous pension default fight). And as I recall, it's the IRS first (always), then the creditors (vendors and banks), then the successful litigants (if the courts find the company liable) and finally the shareholders. So as far as I recall, your guess was correct.

But this opens up a host of interesting issues. Take this article:

"In a devastating blow to 122,000 workers and retirees, a federal bankruptcy judge ruled May 11 that United Airlines may default on its pension obligations and turn over control of its pension funds to a federal agency that is already swamped by corporate pension defaults. Judge Eugene Wedoff approved the airline management’s request to terminate four pension plans—for pilots, flight attendants, mechanics and other ground service workers. The $9.8 billion pension plan default is the largest in US history.

"The Pension Benefit Guaranty Corporation will take over the plans, but federal regulations limit the amount of pension payments it can make to a maximum of about $45,000 a year. The highest paid UAL workers, such as pilots, will face pension cuts of up to 50 percent, while lower-paid workers could lose as much as 20 percent. The pilots face a Catch 22: under one federal law, they are not allowed to work after age 60; under another, the proportion of their pension guaranteed by the PBGC is sharply reduced if they retire “early,” i.e., before age 65."

http://www.wsws.org/articles/2005/may2005/unit-m13.shtml

Or these, all very much worth looking at:

www.nytimes.com/2005/05/11/business/11air.html?pagewanted=print

uspolitics.about.com/od/.../a/us_pensions.htm

www.allbusiness.com/finance/4063439-1.html

knowledge.wharton.upenn.edu/article.cfm?articleid=1033

Looking into this issue in detail tells us a lot about how the country actually works.

Cost shifting
Let me get this straight: The taxpayers are to bear all the risk of bad government and not unionized workers? Thus, unionized workers who pay no federal income taxes are the nation's most virtuous, most protected citizens, and everyone else can just eat cake.

I'll tell you what, rb: You statists are rapidly approaching the end your rope. The political rage building in America is not just directed at the federal government or the Democrats but against all of the special interests and their bought-and-payed for politicians who believe that the taxpayers are an inexhaustible resource to be ruthlessly exploited to satisfy their every desire. The folks are rising up against union pay-offs, state take-overs, corporate bail-outs, tax hikes, profligate borrowing and spending, and all manner of policies that put more burdens on their backs. And I'm with them.

Head's up: I watched an Intelligence Squared debate on Bloomberg the other night whose motion was, "Don't blame the teachers unions for our failing schools." Before the debate, 24% of the audience voted for the motion, 43% against and 33% were undecided. After the debate, 25% voted for the motion, 68% against and only 7% remained undecided.

Wow! The undecideds went overwhelmingly to the "blame the union" side, reflecting the American people's growing animus towards them. So how do you suppose the union pension bailout bill is going to go over with independents, rb? And how do you suppose the Democrats will fare this November when the GOP hangs every union bail-out around their necks? It's going to be a political bloodbath for them, rb, and rightly so.

We taxpayers are not union assets or wholly-owned public utilities of the state. Free people voluntarily spread the risks of bad government, and we taxpayers are going to make sure that union members bear their fair share.

The campaign cash going to Obama
You know, the unions don't exactly have a jackboot clamped down on America's throat. They're stronger than they were a few years ago but they're still just a shadow, compared to the influence wielded by the corporate and financial sectors.

And they include some millions of people. Is it true in your America that these people are entitled to hold no political opinions? Please explain why.

The money that elected Demon Obama was mostly Wall Street money plus a lot of small individual contributions. Real estate interests and pharmaceuticals also have a piece of him. And each of those sectors gave far, far more money than all the unions combined. So you're not showing us any scholarship, only your hate.

Top bundlers for Obama incude Con Ed (electric power), law firms representing the broadcast and telecom industry, banks, HMOs and insurance companies. Union contributions have been negligible. You can, and should, look this up before spouting off on this subject any further.

It's a matter of law
The government has exposure in this instance, as they have been mandated through ERISA to control abuses and force compliance in the matter of companies making contributions into employees' pension funds.

Wronged employees can sue them. It's much like a restraining order. If a woman takes one out, then her boyfriend continues to harass her and the police do nothing about it despite her attempts to bring them in, she (or her estate) can sue them once he does her harm.

Employees whose pensions have been underfunded by the parent companies are in a position to sue the US government for damages, for failure to effectively regulate. The current talk on Capitol Hill is just an attempt to regularize the issue and to define their exposure.

If you need to acquaint yourself with the issue, I've given some refs to JoMaMa in my discussion with him. It has a history. The contractually delinquent companies were not brought under control, so delinquency became more and more widespread. Leading to our problems today.

I know, I know. Companies should NEVER be held to account for anything they might promise their employees. Who are, by definition, negligible under the law. Right?

Laws can be changed and contracts voided
There used to be codicils in deeds that forbade certain races from purchasing the property the title was for. Simple civil rights legislation made those null and void.

Prior to FDR's confiscation of gold, there was routine 'gold clause' in many business contracts: The party receiving any monies was entitled to it in either dollars or gold, as per demand. A simple act of Congress made all those null and void, also.

Note the two differing moral stories of those examples. If the government has the power to do that, they have the power to change anything else and even can forbade the courts from hearing any challenges to it.

And the Supreme Court already has ruled that nobody has a 'right' to social security benefits as promised. That is because they don't have explicit property rights to anything.

The laws can be changed over night. And should be.

Union Thugs For Obama
Andy Sterns has his very own office in the White House.

Join us on Planet Reality some day, Roy.

"We spent a fortune to elect Barack Obama -- $60.7 million to be exact -- and we're proud of it," boasted Andy Stern, president of the Service Employees International Union"

And then there was the 'payment in kind' donations:

"The two-million-member union, which represents both government and private service employees, proudly claimed that its workers "knocked on 1.87 million doors, made 4.4 million phone calls and sent more than 2.5 million pieces of mail in support of Obama." It dispatched SEIU leaders to seven states in the final weekend before the election to get out the vote for Obama and other Democrats."

http://www.realclearpolitics.com/articles/2009/05/13/big_labors_investment_in_obama_pays_off_96469.html

"The money that elected Demon Obama was mostly Wall Street money plus a lot of small individual contributions. Real estate interests and pharmaceuticals also have a piece of him. And each of those sectors gave far, far more money than all the unions combined. So you're not showing us any scholarship, only your hate."

Yeah...from 'foreign' donations that were not disclosed because it would prove that they were illegally bypassing US donation laws.

"More than half of the whopping $426.9 million Barack Obama has raised has come from small donors whose names the Obama campaign won't disclose."

http://newsmax.com/Politics/Obama-fundraising-illegal/2008/09/29/id/325630

Certainly so
If you want to change the law, contact your people in Congress. Tell them you want them to put their names on a bill that will stiff all those retirees out of their pensions.

See how that goes.

Good example
How much money did Obama spend on the election? Wasn't that around a billion?

And how much clout did SEIU buy? Sixty million? That's laughable.

The real people who backed Obama were THE PUBLIC. They gave him half the money he took in. Pity he hasn't represented them very well since coming to ofice.

Missing the point
You wrote:

"I know, I know. Companies should NEVER be held to account for anything they might promise their employees. Who are, by definition, negligible under the law. Right?"

The legislation puts the taxpayers on the hook for the pension shortfalls, not the companies, which are two distinct groups, wouldn't you agree? You argue that burdening the taxpayers with these obligtions is just because the government failed to regulate the companies. I argue that it's unjust because everyone bears the risk of bad government, not just the taxpayers.

Rather than reply to my argument, however, you erect a straw man and knock it down, claiming that I must want companies to be able to default on their pension obligations whenever they like under some arcane provision of ERISA or contract law. This is an illogical and dishonest claim, rb, so let's try again: Why should the taxpayers bear the entire risk of bad government, and why shouldn't the union employees bear their fair share of the risk?

"Employees whose pensions have been underfunded by the parent companies are in a position to sue the US government for damages, for failure to effectively regulate. The current talk on Capitol Hill is just an attempt to regularize the issue and to define their exposure."

Oh, I get it. You're arguing that the unions have a claim against ... the federal government? How so? The federal government wasn't a party to the pension obligations, and the courts give the Executive branch's enforcement of legislation very wide discretion, particularly when Congress leaves it to the relevant agency to work out the details of enforcement. Hence, the unions' claim seems tenuous at best and hopeless at worst.

But rather than the unions having to take their chances in federal court with a tenuous claim, you want Congress to step in and foist the damages on the taxpayers. This brings us back to my argument, which you still haven't addressed.

"It's much like a restraining order. If a woman takes one out, then her boyfriend continues to harass her and the police do nothing about it despite her attempts to bring them in, she (or her estate) can sue them once he does her harm."

This is false unless the woman or her estate can show gross negligence, willful disregard of established regulations or policy or some civil rights violation. Consider if it were otherwise: Courts could simply second guess in the perfect clarity of hindsight every administrative decision of the executive branch that resulted in some harm and award millions. Total up all such awards, and we're talking hundreds of trillions (e.g. Katrina, the LA riots, etc.). Who would pay these awards? The taxpayers, of course. And who would make out like bandits? The trial lawyers, of course.

But shouldn't all citizens bear their fair share of bad government? Not so, argue the Democrats, whose coffers are filled up primarily by union and trial lawyer contributions.

Ah, now I finally see where you're coming from, rb.

Fighting injustice
I admire the way you have risen above the popular position here, that the injustice was committed by the unions (in wanting their members to have retirement plans jointly funded), and taken the more defensible position of blaming the companies for first taking on a legal burden and then stiffing their retirees. Definitely, the injustice stems from the actions of those delinquent companies.

How to correct it? I'd like to see them squeezed to the brink of receivership. But that's not going to happen. Many of them are bankrupt already.

As a citizen, I revel in the knowledge that we can make of our government anything we want to make of it. And I abhor those 'strict constitutionalists' who pursue their own version of stealth judicial activism, while publicly espousing a version of piety that ties our hands in favor of a hidden subtext held by the authors of our Constitution-- one that forbids us ever to question or change their sublime commands to us. And only they, in their black robes, can interpret the heavenly intentions of the Founders for us.

That's so much like The Church, with its invisible and mighty Father who commands us from above. Whereas the guys in the robes who actually run this racket are posing as His mere servants.

So instead I own my government. I fund it, and I can do whatever I like with it. And I want to pay those retirees who relied on the government to protect their pensions-- and whose government let them down. I'd like to have that government pay them something in satisfaction (and note that they're not getting full compensation in any event). And I'm fully aware that they're paying them with MY tax money.

It's money well spent. Far better than all the money I've given them to bomb third world peoples who want to run their own countries with their own inept governments. At least in a bailout, my money doesn't go to fund great crimes against humanity.

And it serves a purpose, if only that the government also drives the offending companies to near-ruin. That way it teaches the shareholders to keep better watch on the sins of their principals, the executive officers. Because it costs them.

And it drives the voters to demand that the politicians they elect do a better job of watching the henhouses in their care. They should demand that everyone on the SEC be fired, and marched off in disgrace. And they should not re-elect the senators who appointed and oversaw them.

These are lessons well taught, and I support having my tax money put to such uses. Everyone who thinks the way I do votes that way. And everyone who doesn't-- well, if they like Sarah Palin, maybe they should try to get her to become our chief executive. It would be an object lesson to us all on an even grander scale than Dubya was.

BTW I've noticed you're starting to refer to yourself as "we taxpayers". When did you decide to come back. And, if I can be so impertinent, why?

The unions
"Oh, I get it. You're arguing that the unions have a claim against ... the federal government? How so? The federal government wasn't a party to the pension obligations, and the courts give the Executive branch's enforcement of legislation very wide discretion, particularly when Congress leaves it to the relevant agency to work out the details of enforcement. Hence, the unions' claim seems tenuous at best and hopeless at worst.

"But rather than the unions having to take their chances in federal court with a tenuous claim, you want Congress to step in and foist the damages on the taxpayers. This brings us back to my argument, which you still haven't addressed."

You use the phrase "the unions" as though it were some shadowy enemy, who preys at night and strikes terror into decent men's hearts. But there's no "the unions". There's only individuals who have organized to represent their best interests. They come to the companies because they need the work. The company needs workers every bit as much. So the marriage is one of mutual need.

And the companies are certainly well organized. So by what principle should the workforce NOT be? To have one partner highly centrally directed and the other one not, would be to condone an asymmetry of power.

Which, of course, you don't just condone but actively promote.

I'm happy to see the drama play out in both temples, the courts and Congress. In fact I gave JoMaMa a number of refs you really should take the time to look over. They're very instructive, as to the character of the greater story.

Why would the individuals defaulted against take it to court? Because they have been wronged. In fact I'd REALLY like to see all those wronged millionaires who got skunked by Bernie Madoff take the fight to court as well. Their circumstance is much the same-- the federal government held out an implicit promise to protect, by creating an SEC with powers to prosecute. And the SEC, although very specifically informed of his activities a decade ago, did nothing, allowing the scam to continue.

Like the holders of pilfered pensions, they should have some avenue of redress. I think the courts should take a look at it. And I think if Congress didn't think they had a valid case, THEY wouldn't be looking at it. It looks to me as though they want to take preemptive action.

2. "But shouldn't all citizens bear their fair share of bad government? Not so, argue the Democrats, whose coffers are filled up primarily by union and trial lawyer contributions."

A gratuitous swipe at the Ds-- as though unions and trial lawyers occupy a lower moral grade than do, say, military industrialists, with their need to foist a condition of perpetual war on the world so they can continue to profit.

And an inaccurate one. True, a small portion of the contributions came from them. But Obama's war chest held a billion dollars. And a majority of those dollars, as you can feel free to look up, came from Wall Street, the HMOs and health insurors, the insurance industry and Big Pharma.

Each citizen should indeed bear his fair share of the cost to CORRECT bad government. But I think we'll need to create a third, and perhaps a fourth party if we ever hope to replace it with a better government. And meanwhile I'll fight politically, to not have to bear the perpetual burden of funding a bad government.

It's easy if they are Republicans
Because union goons never vote Republican anyway. So where's the political downside?

Bugaboos
We've both got our bugaboos, rb: Me - the unions & the trial lawyers (AKA the Democrats), the noblesse obliges (i.e. limousine liberals, AKA the do-as-I-say-and-not-as-I-do crowd), Hollywood, the MSM, academia, corrupt community organizations and their organizers, the enviro-zealots, the nutroots and the drones; you - the corporations, the military industrial complex, the Bush clan, Fox News, capitalism, globalism, Big Oil, Big Banks, Big Anything-that's-Profitable and employs people, the Jews (but only the "Israeli" ones, but not really), the Bilderbergers, etc. etc. ad nauseam.

Yet neither one of us can deny that everyone who's not the little guy has his finger in every pie and that manure always rolls downhill. That's the way the world works and always has, and there's no cure. Therefore, when a blessed moment comes around in which the decent but perpetually ankle-grabbing, grin-and-bear-it folk gather together to shout, "Enough!", then I'm with them, and screw everyone else, including all the bugaboos named in the paragraph above. I'm sick of bad government too because I'm the one paying for it. Enough!

You can either be with us or for us, but either way, no more of my tax dollars go out the door to pay off the Democrats' union cronies. Not one more dime. Injustice is a two way street despite the deceptive roadsigns the Democrats are erecting across our great nation. Either get with us or get run over. It's your choice.

Crusader
I get it: You're a crusader who believes that his raison d'être is to throw himself against the infidels, i.e. anyone who you believe has worked an injustice on the poor, the downtrodden, the disadvantaged, the disenfranchised, etc. And your arsenal is ... the public fisc.

Therefore, you're willing to sacrifice any sum to see your mission through to success. Thing is, I'm not because I'm just another shell-shocked peasant standing on the wall beholding the belligerent hordes arrayed before me and wondering whether I'll survive the conflagration. In this battle I haven't got your back, rb, and if I get a good shot, I'll put an arrow in it. And my shot is coming into range this November.

Better you than me, and one less crusader on the battlefield means one less looter I have to worry about. That's democracy, and let the best mob win.

So you go ahead and curse the gods whether they wear black robes or pillars of fire, but as for me, I'll honor God and take care of my family, just as He instructed ("all men are endowed by their Creator with certain inalienable rights ... "). If you get in the way, that's your problem because there are more of us peasants than there are of you crusaders.

Hahahahah!
So why does Andy Stern have such clout with Obama and his staffers, then?

Also, the unions didn't just donate to Obama directly. They donated to the DNC and did a lot of work on the ground. They're his Brownshirts.

It is also not just about Obama proper. It is about the Dems in Congress even more so.

And if the Reps take control of Congress, Obama will get harassed till the end of his 'presidency'. They'll haul in all those czars -- many who have been quoted or even written highly extreme opinions -- for sworn testimony, cut off/redirect funding, etc.

In short, Obama's 'transformation' of America will come to a dead stop if the Reps take even one chamber.
Some severe damage will happen if they take both.

and therein lies the true political conundrum...
in robertbennet's final statement:

"...no more of my tax dollars go out the door to pay off the Democrats' union cronies. Not one more dime. Injustice is a two way street despite the deceptive roadsigns the Democrats are erecting across our great nation. Either get with us or get run over. It's your choice."

See, when the public determines that some government program/policy/etc is a 'welfare' program, then it starts to lose support.

And the perceptual concept of 'welfare' here is defined in the publics' mind as 'special treatment to others BUT me that I don't get/but pay for in some fashion'. It gets worse when the public starts to perceive those getting the goodies as selfish, lazy rat-bastards in some form or another. It starts to hit 'survival critical' for the privileged rent-seekers in question when the perceived delta between how good the rent-seekers have it vs the average joe gets real big, real fast.

And the non-union American support for unions is at an all time low. The almost-childlike demands unions scream about has done a great deal to contribute to that perception, too.

Whereas, social security and medicare aren't considered 'welfare' because the public -- quite hypocritically so, I must emphasize -- sees it as a program that they are part of and expect to benefit from roughly equally compared to everyone else.

But, as we move away from those programs being funded primarily workers to a progressive 'leech the rich' system like we do with income taxes, then it will slowly become seen as a welfare program by the most politically powerful in our nation -- the 'rich' who get nailed and the aspiring rich who's path up the income ladder is slowed down by the additional taxation. FDR was smart enough to see this and avoided it by insisting on total annual caps on SS 'contributions'. And it is why the program is an untouchable third rail in our political system.

LBJ and successors were not so smart with medicare.

Now, nobody on the Left seems to be that smart anymore.

Back to unions: people are fed up for paying for them (higher prices for unionized services for less quality - esp regarding public sector unions) and resentful of their members' privileges -- which has been rightfully exposed as deriving from thuggish force and political corruption that makes corporations look like saints.

The union members have become America's version of the nomenklatura in the Soviet system...the 'pigs & dogs' in Animal Farm.

But -- despite the attempts of a certain troll in a previous forum who keeps insisting on smearing me through rhetorical questions in bad faith -- I believe that the dynamic nature of the non-linear, accelerating economic change hitting us harder and harder as time moves on combined with the American people's low tolerance for this BS will put the Unionistas out on their butts eventually.

Name calling
That has to be one of the more ignorant, bigoted remarks ever to appear in this forum. Union members have joined together to protect their interests. Republicans don't have interest groups? How about libertarians? Forming political groups to get one's voice heard, or to counter etsablished power formations that are already highly organized is just about as American as apple pie.

Their interests are certainly legitimate. They like to work hard, and to help build America. And they want to get paid for it. The ba*tards!

Howling at the moon
Your prose is getting florid. All I am is a contributor into our collective enterprise. And as such, I feel quite entitled to have a say in how the pile gets spent.

That's the way it works in every organization. And in fact you're doing the same thing. If I make the assumption that you're a contributor also, you also like to raise your voice and howl at the moon.

Of course if you're not a contributor, pipe down. It's not for you to say how we choose to spend our money.

So move to Switzerland
You're a fortunate man. Your complaint has an easy solution.

I like it here. I was born here and I like to fight. I'm not going anywhere.

It's all up to you. You can curse the sun or you can move into the shade.

Uh, excuse me? Those are facts.
"That has to be one of the more ignorant, bigoted remarks ever to appear in this forum. Union members have joined together to protect their interests."

Yeah, so? That doesn't change what I said nor proves I am bigoted.

"Forming political groups to get one's voice heard, or to counter etsablished power formations that are already highly organized is just about as American as apple pie"

Yeah, so what? What does that have to do with what I said? How does it disprove the facts of the situation as I laid them out? In turn, how am I 'bigoted'?

Unions go on the offensive with Republicans. They actively vote against them, volunteer for Democrats on campaigns against them, contribute cash for campaigns against them, etc.

So, where is the DOWNSIDE for Reps to change the laws to screw them over? Especially when the gains are so large (eliminating the above political threats to them)?

What? The Reps should just continue to tolerate this just because Roy gets upset if they don't? Right. None of that hasn't stopped the Left from trying their best to do the same thing to their enemies.

Concentrate on the logic, will you?

And, again: please explain how that logic makes me 'ignorant' and 'bigoted'? This isn't about motives or who is 'more noble than the other'. This is simply about the facts as I just laid them out.

If you take issue with the logic, then please address that.

"union goons"
"Yeah, so what? What does that have to do with what I said? How does it disprove the facts of the situation as I laid them out? In turn, how am I 'bigoted'?"

Very pugnacious. What makes you a bigot is your denigration of working people as union goons. It's this kind of dehumanizing that makes people kill one another rather than trying to discuss their differences to arrive at equitable solutions. It's primitive and counterproductive.

Working people join unions because they have been treated unfairly by the management of their companies. They contribute toward the creation of company profits, and think it only fair that they be able to share in the gain the company makes by their contribution. Any one woith a sense of fairness would have to agree.

And they join together so they can bargain collectively over those things they're unable to gain individually. Capitalists, of course, are masters at presenting an organized and collective front. So please explain why it's reprehensible for the one group to do that, while it's only natural for the other.

Concentrate on the logic. You foment hate with your words. Ask yourself what hate speech has to do with bigotry.

No Subject
Things I learned by following the links provided:

1) That PBGC is a government controlled (owned? backed? financed?) "federal insurer", (kind of like the FDIC) which means that they actually collect premiums from 30,000 private sector employers. So, this raises a question. Do rates go up, based on the assessed risk of the company going bankrupt, or for some other reason defaulting on their pension plan? Is it like private health insurance, or auto insurance, where high risk customers pay more? Or is it like Obamacare, where customers with "existing conditions" are covered at the same rate as healthy, low risk companies? It makes a difference. If premiums don't go up for high risk customers (like United Airlines) then there is a great incentive to drag yourself in and out of bankruptcy court on a regular basis. File for protection, drop you pension liabilities, and then go back out and compete at an advantage over your pension-laden competitors. United has shown us how it is done.

2) The World Socialist Web Site not only exists, but has actual readers! I shouldn't be too surprised, I guess. I mean, Obama seems to have no trouble finding wealthy socialists to surround himself with, so I know they are out there. But to think that there are still people (I'm talking, serious adults!) who think socialism is better than capitalism, still blows me away.

The WSWS article seemed well researched, and competently written. For the first half, at least. But then it pulls a "Grapes of Wrath" maneuver, and spews socialist brain-fart ideology like a hippo flinging dung in mating season. Listen to this:

"The struggle of the airline workers is therefore connected necessarily with a fight to mobilize the entire working class as an independent political force, against big business as a whole, and against the two political parties which represent the corporate elite, the Democrats as well as the Republicans."

Let's see. That was "the entire working class" against "big business...Democrats...and Republicans". Perhaps you should take it as a hint that your ideology is divorced from reality when 90% of America is on BOTH SIDES of your ideological battle lines!

"The jobs and living standards of airline workers, as well as the safety and comfort of the traveling public, can only be secured by ending the subordination of the airlines and all major industry to the workings of the capitalist market."

He he he.

"As an operating principle, the goal of private profit has proven itself utterly irrational and destructive. A rational solution to the crisis requires the building of an independent and international socialist movement that has as its aim the complete reorganization of the economy. The airlines should be transformed into public utilities, run on an international basis, and placed under the democratic control of the working people."

Hurray! The "rational solution" to the "crisis" has been provided - the "complete reorganization of the economy"! (I shouldn't laugh. Obama and friends are trying!)

"Only on this basis can the jobs, wages, working conditions and retirement benefits of airline workers be secured, and the interests of society as a whole be defended."

WOW!! I'm getting goosebumps! Obviously, our only Hope is Transformational Change. Sign me up! (Now I know where Obama got his slogans from.)

The PBGC
The PBGC assesses dues equally from all employers with pension funds. So there is no penalty for default-- thus a strong incentive to do so and be bailed out. You have to remember that most legislation now is written by the people being regulated. And they wouldn't penalize themselves now, would they?

More info on this convenient amenity for defaulting companies:

http://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corporation

I thought you'd like the World Socialist Web Site. In fact it's mostly read by international and old timey Marxists. And how sharp of you to pick up on something I was hoping you'd notice. The news articles are marvels of factual reporting. They're as good as news articles in Christian Science Monitor, for instance. But the editorial opinions expressed are straight, doctrinaire Marxism of a sort that went out if fashion in the USA back in 1954.

In the article I reffed, everything up to the last six paragraphs was solid information. Then it got preachy. Not many people here would have even read it, considering the source.

Contrast, to choose another example, with Townhall.com. I opened it up this morning to see how it was doing. Not just hate filled and divisive in intent (the site is actually the one that originated what we now know as the Tea Party), it's filled with the most brazen nonfactual slanders and innuendos, masquerading as factual content.

Read a few of the articles. See what you think. There's a knock down drag out campaign going on right now to fill the air with straight out lies, easily checked ones even, because the mob is howling for blood and not about to check anything for accurate content. The place feels like St Petersburg in 1917.

http://townhall.com/

I will have to correct you in one detail though. You refer to socialism/communism as being "your ideology". And that's just something people here say about me. I've been a part of the system my entire working life, have run my own business and believe very strongly in the need to induce investment capital to do its work in a safe environment.

I also believe the people of this country have social needs that are not currently being met. In other words, I think every ideology falls short of expressing what needs to be done to run the country on a productive and profitable basis-- for all who participate in the work, not just those at the very top. To me that's what democracy is all about.

BTW I hope you read a few of the other articles, not just the one on WSWS. USPolitics, Allbusiness.com and knowledge.wharton.upenn.edu all have some very enlightening information, for any who seek it. WSWS I just put in to raise your eyebrows.

Can the PC garbage...it doesn't work on me.
"What makes you a bigot is your denigration of working people as union goons"

working people? Somehow, people getting paid big bucks with Rolls-Royce bennies to sit around and play cards all day in some 'job shop' set up by the Big Three don't deserve to be defined as 'working people'. Neither do the teachers who do a horrible job of destroying the futures of millions of millions of human beings.

Does that mean that all union goons are that way? No.

And given how low union membership is by historical standards, the vast majority of 'working people' are non-union these days, Roy. You foment hate with your words. Ask yourself what hate speech has to do with bigotry.

And those are facts whether you characterize them as 'dehumanizing' or not. See, I don't let the political correctness BS be used against me, Roy. 'Hate speech' designations in particular is totally antithetical to freedom of speech rights as well. Give it up.

"Working people join unions because they have been treated unfairly by the management of their companies."

Only those that vote for creating a union. The rest are usually forced to or to pay 'agency fees' in lieu of in order to get the job, whether they like it or not. Furthermore, the unions themselves want to eliminate union organization elections with 'card check' so they can send toughies to people's home to intimidate them into signing the cards or to just plan forge the signatures where they can get away with it.

"They contribute toward the creation of company profits, and think it only fair that they be able to share in the gain the company makes by their contribution"

No, they supposedly join to protect their interests. But we have workers compensation for injuries now. We have anti-discrimination laws. We have child-labor laws and maximum work week laws and minimum wage laws. So, we don't need unions to protect people from all that now, do we?

"think it only fair that they be able to share in the gain the company makes by their contribution"

Translation: They think they can use the power of government force to confiscate someone else's property against their will.

"And they join together so they can bargain collectively over those things they're unable to gain individually"

so? that's just the method. The goal is always the same: forced confiscation of property from another.

"Capitalists, of course, are masters at presenting an organized and collective front. So please explain why it's reprehensible for the one group to do that, while it's only natural for the other."

Because the capitalists offer voluntary employment to people, and they voluntarily take it. Whereas unions force capitalists against their will, with the power of government. Of the two, the latter is extremely reprehensible.

You might not like rich people Roy. But that doesn't give you the right to take their wealth away against their will. Or rather, it shouldn't. Larceny is larceny.

Whereas a job is always voluntary. And don't give me BS about people 'needing' jobs. No, they don't. They don't need jobs anymore than they need debt, except where they've convinced themselves that they do.

Then I guess 40%+ of Americans who don't pay income taxes...
...should not have a say in how the Post Office is run, in defense matters, in NASA, in all the subsidies, welfare, health care, etc...since they don't pay for them or don't pay enough to equal the amount they get back, then.

That is the logical conclusion to your point, Roy.

Let's hear it for hate speech
I've never heard it put quite that way:

"'Hate speech' designations in particular is totally antithetical to freedom of speech rights as well. Give it up."

And this is just beyond asinine:

"Whereas a job is always voluntary. And don't give me BS about people 'needing' jobs. No, they don't. They don't need jobs anymore than they need debt, except where they've convinced themselves that they do."

So no one needs a job? What? They can just rob some convenience stores? Of course people need jobs. They've convinced themselves they'd like to eat, and have a roof over their heads.

One can see you don't mind acting moronic when your back's against the wall. Take a pill.

By the way I've liked more rich people I've met and worked with than disliked. Well, maybe not more. But half of those I've met, certainly. So if you ever hear me talking about some rich pig, it's a particular rich pig I have in mind. Not all rich people.

They pay their taxes
The bottom two quintiles can't afford to pay income taxes. Their household income is lower than $35,000. That's for the entire family.

Yet they pay payroll taxes, which I'm guessing you don't. And they pay sales tax. Together those two bites take about 15% of income.

Yes, they're vested in the way this country is run. They're just not organized yet.

What a liar you are
First you use the title "They pay their taxes"

Then on the first paragraph, you admit that they don't.

Of course, you conveniently omit that we are talking about income taxes. It is income taxes that subsidize the Post Office, pay for the national defense, NASA, the FBI, etc.

None of which is paid for by payroll taxes. The payroll taxes are contribution specific -- social security goes to social security, medicare to medicare, workman's comp to Roy's Fantasy Fund That Pays for Everything...er, not!

They are welfare bums, pure and simple.

"Yes, they're vested in the way this country is run"

No they are not. They don't have to pay for anything, so they can't possibly make rational decisions involving cost -- because they force a minority of people to pay that for them.

Accountability, consequences, etc.
>" The PBGC assesses dues equally from all employers with pension funds. So there is no penalty for default-- thus a strong incentive to do so and be bailed out. You have to remember that most legislation now is written by the people being regulated. And they wouldn't penalize themselves now, would they?"

You know, that is the problem with so much of what goes on these days - lack of accountability, lack of consequences, no incentive to do good. And this is the main reason that government does so many things so poorly. The connection between good service and rewards (via taxpayer dollars) is so very weak. There is little or no incentive to cut costs, since budgets are based on politics, not market factors. In fact, it is often reversed from what it should be. I was just reading an article about blood dialysis for people with kidney problems. The current system is a "cost-plus" system, meaning that the insurance company pays the dialysis center whatever the cost of the drugs and equipment is, plus a percentage. Thus, the incentive is to use the most expensive drugs, and the most expensive treatment, because then your portion of the payment is higher. Is that messed up, or what?

Insurance (all kinds, from auto to home to health to pension plans) is really a simple concept. The insurer sets the price of premiums high enough to cover the costs of making payments to customers with claims, and a bit more to make a profit. If they set the premiums too high, and go for too much profit, they get undercut by your competitors, and go out of business. If they set the premium too low, they don't collect enough money to cover claims. If they don't set your premiums according to risk, they loose one way or the other (or both). Free market competition sets the price at a reasonable level - a level acceptable to both buyer and seller - or no sale is made.

But people either just don't understand this (because they are too stupid?) or they think there is some other magic solution, which would allow all claims to be paid to everybody (even new customers with pre-existing conditions!!!) while collecting small premiums.

Surely, most people can't really believe that. If they did, they would go into the insurance business themselves and make a fortune by providing the service everybody wants, at a price they want to pay. But they don't do that, because they know that it is not feasible. So instead, they look for an easy road. They threaten the "evil" insurance companies, and pass ridiculous laws, requiring them to do the impossible - operate at a loss forever. These politicians either actually believe that by passing these laws, they can accomplish the impossible (or force somebody else to do it for them), or they are simply feeding on the ignorance of the voters. I think it is the latter.

Anyway, it is this disconnect between action and consequences that has got us in such a mess. Many people really do believe there is such a thing as a free lunch. In fact, they demand that their government deliver it to them. Where it comes from, they don't seem to care. Soon, they will.

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