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  • From: Tvoivozhd <tvoivozd AT infionline.net>
  • To: homestead AT lists.ibiblio.org
  • Subject: [Homestead] There's plenty of money for this administration to waste
  • Date: Thu, 14 Oct 2004 14:06:39 -0700

No, I am not referring to Tom Ridge pissing away $500,000 on a big two-year party on the occasion of his second year as Home Security head, monstrous as that is, but the impending taxpayer bailout of the Pension Guaranty Fund in the wake of the $1.4 Trillion taxpayer bailout of the Savings and Loan system---both Triumphs of Deregulation!!


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Savings and Loan Scandal

You don't want to buy my bridge??---have I got a bargain for you---I paid you $50,000,000 dollars, Mr. Pension Guaranty Trust, and all I want from you is an $6.4 billion dollar reward---doesn't that sound reasonable?

Deregulation is SUCH A MARVELOUS DEVICE---I know Ali Baba is eating his heart out somewhere, because he can't get in on it.

Sure, you will go belly up too, but what the hell, it's identical to the monstrous taxpayer bailout of the Savings and Loan taxpayer bailout of the 1980's.

You DO remember the Savings and Loan taxpayer bailout don't you---I know it escaped the attention of President Bush, but then he has a pretty short attention span, except for more important things like sponsoring an earthshaking event like a gay-marriage Constitutional Amendment, which will surely cure the 50% failure-rate of heterosexual marriages. But as a reminder, the Savings and Loan bailout cost the taxpayer $1.4 TRILLION DOLLARS!!



Savings and Loan Scandal
Here are some facts on the infamous S&L scandal of the eighties which we are still paying for.

* The Savings and Loan scandal is the largest theft in the history of the world.

* Deregulation eased restrictions so much that S&L owners could lend themselves money.

* The Garn Institute of Finance, named after Senator Jake Garn, co-authored the deregulation of the industry and received $2.2 million from industry executives.

* Neil Bush, George Bush's son, never servered time in jail for his part in running an S&L into the ground.

* Represenative Fernard St. Germain, who was head of the House of Representatives banking, co-authored the deregulation and was voted out of office after other questionable dealings and was sent back to D.C. as an S&L lobbiest.

* Charles Keating, when asked if massive lobbying efforts had influenced the government officials, he replies "I certainly hope so."

* The rip-off began in 1980 when the government raised the federal insurance on S&L's from $40,000 to $100,000 even though the typical savings account was only around $6000.

* Some of the seized assets were a buffalo sperm bank, a racehorse with syphilis, and a kitty litter mine.

* James Fail invested $1000 of his own money to purchase 15 failing S&L's. The government reimbursed him $1.85 billion in federal subsidies.

* It sometimes took over 7 years to close failing S&L's by the government.

* When S&L owners who stole millions went to jail, their sentances were typically one-fifth that of the average bank robber.

* The goverment bail out will cost the taxpayers around $1.4 trillion dollars when it is over.

* If the White House had stepped in and bailed out the S&L's in 1986 instead of delaying until after the 1988 elections, the cost might have been only $20 billion.

* With the money lost from the S&L scandals, the government could have provided prenatal care for every American child for the next 2,300 years.

* With the money lost from the S&L scandals, the government could have purchased 5 million average homes.

* The authors of "Inside Job", a book about the S&L scandal, found criminal activity at every S&L they investigated.

Facts were taken from"Inside Job" and "It's a Conspiracy! by the National Insecurity Council.
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Submit a Correction
Copyright 1995-2003, by Charles R. Grosvenor Jr.





United's pension woes: sign of bigger issue
Ailing airline may end all of its pension plans, creating the biggest default in US history and forcing a possible bailout.

By Alexandra Marks | Staff writer of The Christian Science Monitor

NEW YORK - Despite ongoing negotiations with its unions, United Airlines has told the bankruptcy court that the "likely result" will be a decision to terminate all of its pension plans.

That would precipitate the biggest pension default in history, more twice the size of the Bethlehem Steel Corporation default in 2002. The move is expected to destabilize the already struggling airline industry, prompting other old-line carriers like Delta to eventually follow suit to maintain competitiveness.

It would also put additional pressure on the Pension Benefit Guaranty Corporation (PBGC,) the federal agency that insures traditional pensions in case companies go belly up. It's already facing more than a $9 billion shortfall. A default by United would saddle it with an additional $8.4 billion in unfunded obligations. If other airlines follow, the PBGC may have to go to Congress and plead for a bailout that some experts say would be bigger than the Savings and Loan debacle of the 1980s.

More broadly, what all this means is that retirement for US workers just isn't what it used to be. Forget the gold watch and reliable pension check after 30 years of service. The impact of globalization and competition from low-wage companies that don't provide benefits has shifted the onus of retirement security from larger firms onto individuals.

Twenty years ago, 40 percent of American workers were covered by traditional pensions known as defined-benefit plans. Today that number's dropped to 20 percent. As the Bethlehem Steel and United examples show, even that 20 percent may not be able to count on what they've been promised. Currently, about 75 percent of those corporate plans are underfunded. "There are numerous threats to retirement in the future," says Brad Belt, executive director of the PBGC. "So it's incumbent on individuals to be well informed, prudent about their investments, and to save accordingly."

To get a sense of the impact of the pension crisis on individuals, look at what United employees can expect. Pilots, who by law must retire at 60, could see their retirement income cut by 75 percent.

Betty, who asked that her name not be used, has been flying for United for 26 years. She was expecting to retire with $140,000 a year. After the recent round of give-backs, that was cut to $90,000. But if United defaults as expected, she'd receive only $28,000 from the PBGC. If she waits until 65 to start collecting, she could be eligible for as much $44,500 a year.

Either way, once pilots are forced to leave the cockpit at 60, most will probably look for another job rather than lounge on the golf course. Betty has already started a mediation business on the side. "All of the benefits that I'd been promised during those 26 years have been erased by corporate American greed," she says. "And yet I can see the big picture. I've said for three years that our pensions are history. No matter how many promises they make us, if the money isn't there, it isn't there."

For the pilots union, which negotiated the pension benefits over the years, often giving up wage increases for better retirement packages, the current situation is infuriating. They see pensions as benefits that are earned, like employee paychecks, not a bonus to be given as long as a company can afford it. "It seems immoral that just because they happen to be in a legal situation, they can walk away from those obligations," says Steve Derebey, spokesman for Air Line Pilots Association. "Why this isn't a burning, blazing campaign issue is beyond me."

For United's managers the situation is just as stark. Because they are currently negotiating with the pilots, they wouldn't comment. But some experts say the company's decision to announce in bankruptcy court that it expected to default reflects its "frustration" with the perceived union intransigence. "United has been trying to engage its unions for a long period of time," says John Budd, a labor-relations expert at the University of Minnesota's Carlson School of Management. "This reflects its frustration with its inability to get them constructively engaged."

Many aviation experts contend that after two years in bankruptcy, and with its finances still precarious, United has no other choice but to default. That's because competition from lower-cost airlines, many of which provide 401(k) plans instead of traditional pensions, have transformed the economics of the aviation industry. "The cost of maintaining defined-benefit-pension plans doesn't make any sense because you've got the low-cost carriers entering the market with such dramatic cost advantages to begin with," says Jon Ash, managing director of Global Aviation Associates in Washington. "Like in other industries, the day of the defined-benefit pension plan is long gone."

Mr. Ash, like other aviation experts, believes that once United defaults other carriers like Delta and USAirways will also have to find a way to dramatically reduce their pension obligations. USAirways, which already has defaulted on its pilots' pension plans during its first trip to bankruptcy court in 2002, has warned that it may default on others as well. Delta, which is teetering on the edge of bankruptcy, may have no choice but to follow suit.

For the PBGC, which is already facing a long-term funding gap, that scenario could spell trouble. That's in part because as the number of companies switching from traditional pensions to 401(k) plans drops, so does the PBGC's premium income. Currently, the remaining companies pay the PBGC $19 per employee to insure their defined-benefit pension plans.

While the PBGC can charge more if a pension fund is underfunded, companies don't always pay up, as the Bethlehem Steel case illustrates. It didn't pay the increased costs even after it stopped paying into its plans. And the current premiums do not reflect the real costs of insuring the pensions. For example, over the years United has paid into the PBGC only $50 million dollars. If it defaults, it will saddle the government insurance agency with $6.4 billion dollars worth of claims.

"We need to take measured action now to address those threats to the system," says the PBGC's Mr. Belt.


Here are some facts on the infamous S&L scandal of the eighties which we are still paying for.

* The Savings and Loan scandal is the largest theft in the history
of the world.

* Deregulation eased restrictions so much that S&L owners could lend
themselves money.

* The Garn Institute of Finance, named after Senator Jake Garn,
co-authored the deregulation of the industry and received $2.2
million from industry executives.

* Neil Bush, George Bush's son, never servered time in jail for his
part in running an S&L into the ground.

* Represenative Fernard St. Germain, who was head of the House of
Representatives banking, co-authored the deregulation and was
voted out of office after other questionable dealings and was sent
back to D.C. as an S&L lobbiest.

* Charles Keating, when asked if massive lobbying efforts had
influenced the government officials, he replies "I certainly hope so."

* The rip-off began in 1980 when the government raised the federal
insurance on S&L's from $40,000 to $100,000 even though the
typical savings account was only around $6000.

* Some of the seized assets were a buffalo sperm bank, a racehorse
with syphilis, and a kitty litter mine.

* James Fail invested $1000 of his own money to purchase 15 failing
S&L's. The government reimbursed him $1.85 billion in federal
subsidies.

* It sometimes took over 7 years to close failing S&L's by the
government.

* When S&L owners who stole millions went to jail, their sentances
were typically one-fifth that of the average bank robber.

* The goverment bail out will cost the taxpayers around $1.4
trillion dollars when it is over.

* If the White House had stepped in and bailed out the S&L's in 1986
instead of delaying until after the 1988 elections, the cost might
have been only $20 billion.

* With the money lost from the S&L scandals, the government could
have provided prenatal care for every American child for the next
2,300 years.

* With the money lost from the S&L scandals, the government could
have purchased 5 million average homes.

* The authors of "Inside Job", a book about the S&L scandal, found
criminal activity at every S&L they investigated.

Facts were taken from"Inside Job" and "It's a Conspiracy! by the National Insecurity Council.

Email Siteowner <http://www.inthe80s.com/email.shtml>, Privacy Statement <http://www.inthe80s.com/privacy.shtml>



Submit a Correction <http://www.inthe80s.com/cgi-bin/correction.cgi>
Copyright 1995-2003 <http://www.inthe80s.com/copywrt.shtml>, by Charles R. Grosvenor Jr.






  • [Homestead] There's plenty of money for this administration to waste, Tvoivozhd, 10/14/2004

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