What a field day for the heat
A thousand people in the street
Singing songs and carrying signs
Mostly saying, "hooray for our side"

Monday, February 21, 2011

One Man's Riot Is Another Man's Revolution

Spent most of the day offline, somewhat enforced by lots of errands and class, somewhat willful. There will be more about that later.

However, I did have a major comment I wanted to get out regarding both the N. Africa and Middle East uprisings and he marches on state capitols. I believe in both circumstances we've changed from watching history happening to watching an historic happening. At that's about as much as they are related (although there are subtle connections, the motivations aren't the same).

A secondary comment about the state capitol thing. As a result of the errands I got to listen to a lot of radio I don't normally listen to. And one thing that struck me was the focus on pensions, and specifically pension plans. I didn't hear this connection being made, but I kept wondering at the overwhelming focus on the pensions, and wanting to dismantle them. I did hear one of the union leaders making a salient point about how the union members have kept their end by making their contributions, however many of the pension plans are in trouble because the government didn't keep up their end with the contributions, and this is why many pensions are underfunded (so basically, with the "expected cost rise", it was self-inflicted by the elected representatives who failed to live up to their end of the contract).

However, the major reasons businesses hate pension plans, at least big businesses, is two fold. One, the investment plans don't generate much profit for the banks and brokers (larger pensions have in-house brokers and fund their own transactions internally). And two, pension plans are the largest institutional investors and lately they've been pushing for corporate reform (executive pay, corporate oversight, and independent boards). All things big business doesn't want to do, and the institutional investors have the clout to force them to.

1 comment:

sheila, who is not lurking today, said...

Thank you for the insight! I've never had a job that has offered a pension, and so do not know the ins and outs.

But I suspected that there was more to the story, and now I cannot help but be absolutely gobsmacked at the gall of the Wisconsin governor. He cut taxes and thus reduced state revenues -- and not only set up the state for a budget shortfall, but didn't fund pension obligations that the state had previously agreed to? How is this legal?

:: shakes head and sighs ::