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>Pensions are going to be an issue that deeply divides younger and older liberals. Pensions are an issue that divides rich and poor. This guy is rich. We are n

>Pensions are going to be an issue that deeply divides younger and older liberals. Pensions are an issue that divides rich and poor. This guy is rich. We are not. This article seems to be about him trying to destroy our pensions. The so called existential crises were created by the financial sector he hailed from. They did not appear out of thin air. For example: https://www.wsws.org/en/articles/2014/01/14/swap-j14.html https://www.wsws.org/en/articles/2014/01/14/swap-j14.html When the financial sector is in trouble, they get given virtually unlimited bailout money and they have interest rates set to accommodate their desires. When municipalities and pension funds are in trouble they are told to go fuck themselves.

Moshe_Silnorin 11y ago
Yes, the rich who get their pensions and the poor young people who have to pay for them. Unless we get truly spectacular growth in the next 20 years something is going to break.
RockyMcNuts 11y ago
the dynamic is something like - sun-belt city has a lot of young people moving to it, not so many kids, not much infrastructure - city hires young workers, builds infrastructure, assumes a high return to pension funds - city has older people over time, more kids, more infrastructure, needs to raise taxes - taxpayers resist, city assumes even higher return on pension funds, raids pension funds to balance budget - early hires are ready to retire, pension is broke, taxes go up - taxpayers move away to new city or suburb, sun-belt city faces rust-belt city dynamics and can't afford pensions financial market returns have if anything been unusually good the last 30 years regardless of the crisis, volatility, financial sector shenanigans... if you see a true bear market like the 70s God help those new rust belt places. whatever the problems with the financial sector, there's an unstable dynamic where new growing places have a virtuous cycle, and once you cross a threshold and growth slows, it reverses and you have a vicious cycle of decline.
- crdoconnor 11y ago
  Many of these cities that have declined and lost tax revenue have done so because the industry they surrounded upped and left to China/Central America. The industry left for China because, again, the government is placing the interests of financiers over the interests of average Americans. They do this by following a strong dollar policy (the polar opposite of China's weak yuan policy).
  - jacquesm 11y ago
    >The industry left for China because, again, the government is placing the interests of financiers over the interests of average Americans. That's not so much the government as it is the companies doing the moving, it's all about the cost of labor and in developing countries that cost is a small fraction of a developed one, no matter what their currency policy. The 'strong dollar' is only strong relative to other currencies, and is mostly strong because it is the reserve currency for many and the currency in which oil is being traded.
    - crdoconnor 11y ago
      >That's not so much the government as it is the companies doing the moving, The companies are doing the moving because the Chinese government pegs its currency very low and the US allows its currency to float very high. There's nothing at all inevitable about all that ridiculously cheap stuff coming from China or those abandoned factories in Detroit. It's all the result of a set of very deliberate policy choices. >it's all about the cost of labor and in developing countries that cost is a small fraction of a developed one, no matter what their currency policy. If labor were all that mattered all of the new factories would be built in the middle of Bangladesh rather than in the Pearl River Delta. Their labor is far cheaper. Most of the world has lower cost labor. The work goes to China specifically because it has infrastructure of a rich nation but the currency of a poor nation. Even with that there is no requirement for us to trade with them. US elites also made a deliberate choice to drop trade barriers with China despite the repressive nature of the country. Again, because it serves the interests of US oligarchs. >The 'strong dollar' is only strong relative to other currencies What exactly did you think I meant by strong?
rayiner 11y ago
Most people owed pensions are solidly middle class. They are way better off than the young people who will be paying for them. And blaming the financial sector for the pension crisis is ridiculous. States and municipalities entered into very risky financial arrangements because for years they made very optimistic actuarial assumptions about pension fund growth, and committed to benefits that could not be sustained once population growth plateaued. Investing in those risky assets was a gambit to get the kind of returns they needed to stay solvent. That gambit failed, but financial companies didn't create the underfunding that led to the need to invest in risky assets in the first place.
- DanielBMarkham 11y ago
  You and crdoconnor are eloquently demonstrating the damage debt does to discourse. Whatever your political slant, in this case it looks like class warfare, it can be turned against itself when debt starts limiting the degrees of freedom political action can take. Conservatives will do the same thing -- for them the argument will be something like "if we can't fund the national defense/LE, why do we need a government in the first place?" Long term, this debt problem, whether local or national, is some nasty, radioactive stuff.
- crdoconnor 11y ago
  >Most people owed pensions are solidly middle class. The middle class is gone. >They are way better off than the young people who will be paying for them. As opposed to the oligarchs who are trying to leech wealth from both groups? >And blaming the financial sector for the pension crisis is ridiculous. Did you read the link? What happened to Detroit was looting and fraud. Plain and simple. >States and municipalities entered into very risky financial arrangements because for years they made very optimistic actuarial assumptions about pension fund growth Optimistic == We assumed that interest rates would not be dropped to zero to bail out the financial sector. This was a reasonable actuarial assumption pre-2008 and it should have been a reasonable actuarial assumption post-2008. >Investing in those risky assets Investing in those risky assets largely happened after the government decided to drop interest rates to zero in order to bail out the banks. Much of it was also driven by un-prosecuted fraud.
morgante 11y ago
> Pensions are an issue that divides rich and poor. I am not rich, but I am young. And I despise the fact that I'm paying for retirement programs and pensions for people who just happened to be born at the right time with the right job. It's fundamentally unjust that we're forced, by law, to pay for benefits we will never receive.
- Frondo 11y ago
  This is going to sound impolite, but I can't think of another way to put it: you've been had, you've fallen for the big con at work here, when you say you despise retirement programs and pensions. I'm young-ish, I have no pension, I work for myself, and I'm definitely not well-off by any stretch. I have no horse in the pension game, except that I'm largely in the same boat as you (I'm guessing). The difference is, I look at the people with pensions and I don't think, "oh those pension-holding fat cats". I look at them and think, what happened to the rest of us? Why is it only the people whose decent standard of living was locked in by law or extensive contracts, why are they the only ones who definitely get to retire now? There is a big con going on here, but it's not those folks with pensions, it's that the rest of us are now reduced to fighting over scraps.
  - harryh 11y ago
    > what happened to the rest of us Most of the private economy switched to individual retirement accounts (401Ks/IRAs) so that you don't have to depend on the ability of a private company that may or may not exists 40 years from now (when you retire) and you can instead depend on yourself. Save some money. It's simple. You'll be fine.
    - Frondo 11y ago
      "Same some money. It's simple." Except, it obviously isn't working out in practice. People can't save enough, and it's not just down to a personal failing--it's systemic. People can't save enough because our wages have been separated from our productivity--and kept down--for the last four decades. That's bigger than the individualistic "every man for himself" type of advice that "save some money" sounds like. Besides, the realistic view suggests that something bigger is wrong, and something better should be done, when simplistic advice like that isn't working.
poof131 11y ago
And you described the real crux of the problem—crony capitalism. The rich financial sector gets bailed out because they are politically connected. The public unions get bailed out with fabulous pensions because they are politically connected. And everyone without a political connection gets the shaft. Politicians take on more debt and kick the can down the road because the kids can’t vote. The battle isn’t between pensions and the financial sector. That is infighting. The real battle is between the people paying into government and those getting money from the government.
- RockyMcNuts 11y ago
  actually the battle is between idiots who don't want to pay taxes and promote crappy weak governments, and everyone who benefits from having decent government and is willing to pay the price for living in a civilized society. if you're not willing to pay that price then you're the free rider.
  - poof131 11y ago
    I imagine very few people believe there should be no taxes. The question is more where those taxes go: wall street bailouts, wars in foreign countries, unaffordable pension systems, and how much is available, which clearly isn’t enough based upon the ever increasing national debt. It doesn’t seem to be ‘idiots’ vs. everyone, but more likely generation vs. generation. And having spent over a decade in the military with multiple deployments I can relate to idea of ‘free riders’ not ‘paying the price’, but again regarding taxes, I think most people are likely willing to contribute their share when it’s a fair amount and used responsibly. Determining what’s fair and how to use it is the challenge.
    - RockyMcNuts 11y ago
      fair enough. the benefits of having a strong democratic government are so ridiculous that even if a massive chunk of it goes to waste you're still better off living in the country with a strong government than living in Somalia. and a shockingly large percentage of people in the US act as if the government is the enemy and cause of everything that's messed up. and a lot of time it's the same folks who think the government should be doing more surveillance, cops aren't using their authority enough, US should be world's policeman and invade/bomb more countries. go figure. everybody thinks the government should keep the other guy in line, tax the other guy, and give them the benefits and the services.

Moshe_Silnorin 11y ago

Yes, the rich who get their pensions and the poor young people who have to pay for them. Unless we get truly spectacular growth in the next 20 years something is going to break.

RockyMcNuts 11y ago

the dynamic is something like - sun-belt city has a lot of young people moving to it, not so many kids, not much infrastructure - city hires young workers, builds infrastructure, assumes a high return to pension funds - city has older people over time, more kids, more infrastructure, needs to raise taxes - taxpayers resist, city assumes even higher return on pension funds, raids pension funds to balance budget - early hires are ready to retire, pension is broke, taxes go up - taxpayers move away to new city or suburb, sun-belt city faces rust-belt city dynamics and can't afford pensions financial market returns have if anything been unusually good the last 30 years regardless of the crisis, volatility, financial sector shenanigans... if you see a true bear market like the 70s God help those new rust belt places. whatever the problems with the financial sector, there's an unstable dynamic where new growing places have a virtuous cycle, and once you cross a threshold and growth slows, it reverses and you have a vicious cycle of decline.

crdoconnor 11y ago
Many of these cities that have declined and lost tax revenue have done so because the industry they surrounded upped and left to China/Central America. The industry left for China because, again, the government is placing the interests of financiers over the interests of average Americans. They do this by following a strong dollar policy (the polar opposite of China's weak yuan policy).
- jacquesm 11y ago
  >The industry left for China because, again, the government is placing the interests of financiers over the interests of average Americans. That's not so much the government as it is the companies doing the moving, it's all about the cost of labor and in developing countries that cost is a small fraction of a developed one, no matter what their currency policy. The 'strong dollar' is only strong relative to other currencies, and is mostly strong because it is the reserve currency for many and the currency in which oil is being traded.
  - crdoconnor 11y ago
    >That's not so much the government as it is the companies doing the moving, The companies are doing the moving because the Chinese government pegs its currency very low and the US allows its currency to float very high. There's nothing at all inevitable about all that ridiculously cheap stuff coming from China or those abandoned factories in Detroit. It's all the result of a set of very deliberate policy choices. >it's all about the cost of labor and in developing countries that cost is a small fraction of a developed one, no matter what their currency policy. If labor were all that mattered all of the new factories would be built in the middle of Bangladesh rather than in the Pearl River Delta. Their labor is far cheaper. Most of the world has lower cost labor. The work goes to China specifically because it has infrastructure of a rich nation but the currency of a poor nation. Even with that there is no requirement for us to trade with them. US elites also made a deliberate choice to drop trade barriers with China despite the repressive nature of the country. Again, because it serves the interests of US oligarchs. >The 'strong dollar' is only strong relative to other currencies What exactly did you think I meant by strong?

rayiner 11y ago

Most people owed pensions are solidly middle class. They are way better off than the young people who will be paying for them. And blaming the financial sector for the pension crisis is ridiculous. States and municipalities entered into very risky financial arrangements because for years they made very optimistic actuarial assumptions about pension fund growth, and committed to benefits that could not be sustained once population growth plateaued. Investing in those risky assets was a gambit to get the kind of returns they needed to stay solvent. That gambit failed, but financial companies didn't create the underfunding that led to the need to invest in risky assets in the first place.

DanielBMarkham 11y ago
You and crdoconnor are eloquently demonstrating the damage debt does to discourse. Whatever your political slant, in this case it looks like class warfare, it can be turned against itself when debt starts limiting the degrees of freedom political action can take. Conservatives will do the same thing -- for them the argument will be something like "if we can't fund the national defense/LE, why do we need a government in the first place?" Long term, this debt problem, whether local or national, is some nasty, radioactive stuff.
crdoconnor 11y ago
>Most people owed pensions are solidly middle class. The middle class is gone. >They are way better off than the young people who will be paying for them. As opposed to the oligarchs who are trying to leech wealth from both groups? >And blaming the financial sector for the pension crisis is ridiculous. Did you read the link? What happened to Detroit was looting and fraud. Plain and simple. >States and municipalities entered into very risky financial arrangements because for years they made very optimistic actuarial assumptions about pension fund growth Optimistic == We assumed that interest rates would not be dropped to zero to bail out the financial sector. This was a reasonable actuarial assumption pre-2008 and it should have been a reasonable actuarial assumption post-2008. >Investing in those risky assets Investing in those risky assets largely happened after the government decided to drop interest rates to zero in order to bail out the banks. Much of it was also driven by un-prosecuted fraud.

morgante 11y ago

> Pensions are an issue that divides rich and poor. I am not rich, but I am young. And I despise the fact that I'm paying for retirement programs and pensions for people who just happened to be born at the right time with the right job. It's fundamentally unjust that we're forced, by law, to pay for benefits we will never receive.

Frondo 11y ago
This is going to sound impolite, but I can't think of another way to put it: you've been had, you've fallen for the big con at work here, when you say you despise retirement programs and pensions. I'm young-ish, I have no pension, I work for myself, and I'm definitely not well-off by any stretch. I have no horse in the pension game, except that I'm largely in the same boat as you (I'm guessing). The difference is, I look at the people with pensions and I don't think, "oh those pension-holding fat cats". I look at them and think, what happened to the rest of us? Why is it only the people whose decent standard of living was locked in by law or extensive contracts, why are they the only ones who definitely get to retire now? There is a big con going on here, but it's not those folks with pensions, it's that the rest of us are now reduced to fighting over scraps.
- harryh 11y ago
  > what happened to the rest of us Most of the private economy switched to individual retirement accounts (401Ks/IRAs) so that you don't have to depend on the ability of a private company that may or may not exists 40 years from now (when you retire) and you can instead depend on yourself. Save some money. It's simple. You'll be fine.
  - Frondo 11y ago
    "Same some money. It's simple." Except, it obviously isn't working out in practice. People can't save enough, and it's not just down to a personal failing--it's systemic. People can't save enough because our wages have been separated from our productivity--and kept down--for the last four decades. That's bigger than the individualistic "every man for himself" type of advice that "save some money" sounds like. Besides, the realistic view suggests that something bigger is wrong, and something better should be done, when simplistic advice like that isn't working.

poof131 11y ago

And you described the real crux of the problem—crony capitalism. The rich financial sector gets bailed out because they are politically connected. The public unions get bailed out with fabulous pensions because they are politically connected. And everyone without a political connection gets the shaft. Politicians take on more debt and kick the can down the road because the kids can’t vote. The battle isn’t between pensions and the financial sector. That is infighting. The real battle is between the people paying into government and those getting money from the government.

RockyMcNuts 11y ago
actually the battle is between idiots who don't want to pay taxes and promote crappy weak governments, and everyone who benefits from having decent government and is willing to pay the price for living in a civilized society. if you're not willing to pay that price then you're the free rider.
- poof131 11y ago
  I imagine very few people believe there should be no taxes. The question is more where those taxes go: wall street bailouts, wars in foreign countries, unaffordable pension systems, and how much is available, which clearly isn’t enough based upon the ever increasing national debt. It doesn’t seem to be ‘idiots’ vs. everyone, but more likely generation vs. generation. And having spent over a decade in the military with multiple deployments I can relate to idea of ‘free riders’ not ‘paying the price’, but again regarding taxes, I think most people are likely willing to contribute their share when it’s a fair amount and used responsibly. Determining what’s fair and how to use it is the challenge.
  - RockyMcNuts 11y ago
    fair enough. the benefits of having a strong democratic government are so ridiculous that even if a massive chunk of it goes to waste you're still better off living in the country with a strong government than living in Somalia. and a shockingly large percentage of people in the US act as if the government is the enemy and cause of everything that's messed up. and a lot of time it's the same folks who think the government should be doing more surveillance, cops aren't using their authority enough, US should be world's policeman and invade/bomb more countries. go figure. everybody thinks the government should keep the other guy in line, tax the other guy, and give them the benefits and the services.