Tuesday, November 01, 2005

Time Magazine and New York Times Take On Retirement Scandal

In the last week, both Time magazine and the New York Times Magazine have run lengthy articles about the increasing scandal in American retirement systems, whereby rapacious businessmen have been robbing their employees of their pension benefits, using loopholes created by Congress.

The tactic often used is bankruptcy. By going bankrupt, big business, such as United Airlines, can go to the courts and get out of their pension obligations. These are then taken up very partially by a government pension "guarantee" organization that limits payments and is already deeply in the red itself. This is becoming a greater scandal than the failure of the savings and loans more than a decade ago.

More and more, people who have worked for many years to accumulate benefits are finding themselves stripped of most of those benefits, while, quite often, the executives of the bankrupt firms walk off with huge severance packages. Mark Willes of Times-Mirror, for example, took at least $64 million, for example, after the papers were sold out to the mediocre Tribune corporation.

Time magazine's Pulitzer Prize winning investigative team of Donald L. Bartlett and James B. Steele, often called the finest investigative reporters in the U.S., wrote at length about this crisis last week, and the New York Times Magazine also had a long article by Roger Lowenstein, who has written for the NYT before about the fallacy of President Bush's contention that social security faced bankruptcy.

The Los Angeles Times, by contrast, has done comparatively little on the subject, which is not too surprising when one considers that the owners of the Times., the infamous Tribune Co. of Chicago, has been a culprit in attempting to reduce pensions for its employees.

As the proportion of retired people compared to actually working people continues to rise, there is a general tendency toward pensions becoming less and less adequate. The money has simply not been put aside in sufficient amounts to keep them afloat.

Meanwhile, such government agencies as the city of San Diego find themselves deep in the hole in having the resources to pay supposedly guaranteed public pensions. In part, this is because they have over promised benefits to people who retire too early and live too long. You can't wring much water from a dried turnip which is the state of many grossly underfunded pensions.

Congress, no surprise, Bartlett and Steele write, has proved a poor protector of the public welfare, often writing in huge loopholes and generally doing the bidding of corporate lobbyists. This is true of both Democrats and Republicans in the Congress.

I think it's highly important that we all read, study and fully understand these articles. A few wealthy plutocrats are benefitting from the developing system while millions of working people will ultimately find themselves paupers. This is more a crime than a mistake.

2 Comments:

Anonymous Anonymous said...

Meanwhile, such government agencies as the city of San Diego find themselves deep in the hole in having the resources to pay supposedly guaranteed public pensions. In part, this is because they have over promised benefits to people who retire too early and live too long.

Ken, hopefully the light came on for you when writing that paragraph. Can you enlighten us as to how San Diego “found” themselves in this hole? Even a guess? No?

Ok, here’s a hint: What group would be most affected by Prop 75?

Light come on yet? Damn, not even a dim glow.

Well, if 75 fails, I expect we’ll see lots more stories on your blog about cities mysteriously “finding” themselves in a hole while cravenly avoiding the obvious.

Lawrence

11/02/2005 8:56 AM  
Blogger Thomas said...

Ken,

I am a journalism graduate student at USC Annenberg. I'm doing research on big news organizations' lack of self-reporting and the damage this does to public trust in the media. I appreciate your blogs and insight. Could I interview you by phone or email sometime this week or next week? Please email me at tkelley@usc.edu if you are interested. Thank you!

Sincerely,
Thomas

11/02/2005 3:11 PM  

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