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[Commentary] © 2003 Philip Hyde, The Timesizing Wire™, Box 622 Cambridge MA 02143 USA (617) 623-8080

Eroding Retirement, March/2003


3/29-31/2003   eroding retirement -

  1. 3/29   A worst-companies list from Calpers, AP via NYT, C14.
    SACRAMENTO...- The nation's largest pension fund, the California Public Employees' Retirement System [CalPERS] has released an annual report identifying companies that it says are corporate America's worst because of poor corporate governance [ie: "bad management"!] and stock performance, with Xerox atop the list.
    [Xerox??]
    ...Tumbling stocks and large bonuses for top executives drove the $131B pension fund to name six companies, including...Gemstar TV Guide International...and the JDS Uniphase Corp...as the fund's poorest performers. ...Calpers said the companies were selected from a list of 1,800 in which the fund has investments.... The president of Calpers, Sean Harrigan, said the pension fund...would pressure the companies' boards for change.

  2. 3/30   A guarantee on the line - The security of a fixed retirement income for workers in public sector may evaporate under [Mass. Gov.] Romney's plan to replace pensions with 401k-style investments, by Kimberly Blanton, Boston Globe, C1.
    [It's spreadin' thru the wealthy's grapevine. But what do they care - until there's too little consumer base left to support any of their investments.]

3/22-24/2003   eroding retirement -
  1. 3/23   US Airways and pilots' union resolve pension plan dispute, by Micheline Maynard, NYT, A17.
    ...reached agreement...on a replacement for the pilots' pension plan, ending a dispute that threatened to block the airline's emergence from bankruptcy at the end of the month. The replacement plan was approved by the master executive council of the Air Line Pilots Assn...after intense negotiations with the airline, which is based in Arlington VA. Financial details of the plan, which will affect 4,700 pilots, including 3,600 active pilots and 1,100 retired pilots, were not made public....
    [Not a good sign.]

  2. 3/24   Judge says Enron's staff must cover [own] pension fees, by Kurt Eichenwald, NYT, C2.
    The federal judge overseeing the bankruptcy of Enron ruled on Friday that the company could not pay fees to an independent overseer of 3 retirement plans for current and former employees. Instead, the judge [Arthur Gonzalez] said participants in the plans must pick up the costs themselves.... Enron's employees - many of them heavily invested in the company's stock - lost millions of dollars in their retirement plans when the company collapsed into bankruptcy in December 2001..\.. Enron's creditors, who lose money for every dollar spent on other matters, have strongly opposed such payments....
    [So again, a decision in favor of further unspendable concentration of spending power; in short, in favor of deeper recession.]

  3. 3/24   AARP's new hangout: KaZaA, Web's mosh pit, by Chris Nelson, NYT, C4.
    ...Older people now spend so much time online that the AARP [American Assn of Retired People], the association for middle-age and older adults, has begun advertising on KaZaA Media Desktop, software used by millions of teenagers and young adults to swap songs online. One advertisement links the desktop users to an article on "death with dignity" from the AARP magazine....
    [There you have it. Even the AARP mag is running stories on the new American pension plan = dial 800-KEVORKIAN (or die on the job). Shades of the New American Dream = hitting the lottery or suing the deep pocket (or getting fragged in Iraq, or going down in one of their daily helicopter crashes).]
    "These people are not just surfing on grandparents' sites," said Nicole Mansdorf, an account director with iTraffic, the agency that created the AARP [web ad] banner. "They're trading music. They're chatting. They're using instant messenger."
    ..\..AARP members are joining that [beginning-of-life] Web crowd and they might as well be interested in end-of-life issues....

3/18/2003   eroding retirement - a whole section, §E, of the NY Times today on retirement - here are a couple of excerpts -
  1. Arguing against equities, by Mary Walsh, NYT, E1.
    The stock bubble has burst, and then some. But even amid the wreckage, the conventional mantra has continued: stocks are still the long-haul key to preparing for financial security in retirement. But what, actually, if they're not?...

  2. How green is their valley? - Less green than it was - One of the busiest enterprises these days is the thrift shop, by Peter Kilborn, NYT, E1.
    [This article is about an entire town built for retirees south of Tucson.]
    GREEN VALLEY, Ariz. - ...The median age in the 2000 census was 72, one of the oldest in the nation.... With no ice to slip on and a hot, dry climate hostile to viruses and bugs, with 30-minute access to Tucson's wealth of geriatric care and an hour from cheap medication in Nogales, Mexico, Green Valley's location is surely a factor, too. But the [limited] means to live long is colliding with longer lives and harder times, most starkly in retirement communities like these in Arizona, Florida, and California, which bloomed with the rise of the elderly affluence that began in the 1960s..\..
    Robert Bezanson...had made a plan.... He would spend all of his Social Security checks, and over a decade, exhaust his long-nurtured nest egg in government bonds. "I would have an adequate amount for an adequate lifestyle for 10 years," he said. By then he would be 75, fulfilled and [ready to die].
    Instead, Mr. Bezanson is 78 and indisputably [alive]. "The biggest problem I have is that I'm living too long," he said without a glimmer of gratitude. His investments, though depleted, have stretched because he has never needed doctors or prescriptions....

  3. [the solution?]
    Retired, but still on the job, by Karen Alexander, NYT, E1.
    ...Labor force participation among workers aged 55 to 64 increased 2% in 2001, according to the Center for Retirement Research at Boston College....
    [This is the only way to give a green light to much longer lives for human beings. But it puts more pressure on the whole system of work-for-pay because with worksaving technology pouring in from one dimension, imports, immigrants and births pouring in from another, and a workweek which spent 150 years shrinking by half from the 80-hour-level but which has spent the last 63 years frozen at the 1940 level. Block technology and you block progress and get called "luddite." Block imports, immigrants and births only by public referendum. The easiest corner of the triangle to adjust is the workweek, despite the well-documented and surveyed difficulty humans have changing schedules. And there is an obvious determinant of the workweek, namely, those who need a share of it because of their need, in the self-support 'good' and parasitism 'bad' system of work-for-pay, to support themselves. In short, the workweek should vary homeostatically and inversely with the unemployment rate, so that all citizens can easily support themselves and relieve taxpayers of the burden. Longer lives imply longer self-support.]

3/14/2003   eroding retirement - more cumulative capital from the past, more inventions, more labor saving technology, yet worse and worse future, and all because we introduce technology to downsize, not timesize -
  1. Schwab joins others ending contributions to 401k's, by Walsh with McGeehan, NYT, C1.
    ...Other companies that have said they are reducing or halting such contributions include Goodyear Tire & Rubber, Great Northern Paper, Tech Data, the El Paso Corp...and the CMS Energy Co....

  2. Germany's pension system is facing a crisis, Roundup via WSJ, A8.
    BERLIN - Germany's state pension system will be in deficit and could have a liquidity crisis this year, according to the head [Hartmann Kleiner] of the federal pension agency that covers 24m workers....
    [Whaddo we have, a world-around stupidity virus?]

3/12/2003   eroding retirement -
  1. Administration drafting proposals to preserve pension plans, Bloomberg via NYT, C9.
    The Bush administration is drafting proposals to discourage companies struggling to pay for traditional worker pension plans from dropping them, the head of the agency that insures pension plans told Congress today....
    [So no carrot, just stick. Is this a genuine attempt to reverse the spreading drop in the substantial percentage of our consumer base represented by retirees (how much exactly??), or just window dressing? The only effective and flexible way to do this would be to restore labor leverage in the job market, by restoring wartime levels of perceived labor shortage, which market forces would respond to with better wages and benefits, including health insurance and pensions. But as longevity increases, arbitrary-age retirement fades in favor of disability and rehab, and as technological job aids multiply, permanent disability fades in favor of tighter workweek rationing of job candidates to squeeze the private sector into supporting itself - without parasitizing taxpayers - with even more technological job aids.]
    In January, the agency reported an $11.4B loss for the fiscal year that ended Sept. 30 - the biggest in the agency's history - after it assumed liability for pensions at bankrupt steel and airline companies..\..
    [And guess who gets charged for that.]
    Steven Kandarian, executive director of the agency, the Pension Benefit Guaranty Corp...said that it would take the agency 12 years to take in enough premiums to pay for the losses incurred in 2002 alone..\..
    [And who says such losses aren't going to continue for the next 12 years? So here is yet another blank check on the taxpayer, which would be absolutely no problem if we had control of our government and could merely access the suppurating billion$ of the superrich, but they have the control and they're ensuring that through ordinary employees have to cover that blank check with the ten$ and hundred$ they would otherwise spend. Ergo falling consumer demand and no serious hope of economic recovery.]
    Of the companies in the S&P 500, 360 have...defined-benefit pension plans, which provide annual lifetime payments to workers after they retire. Stock market declines in the last 3 years have caused the funds to lose more than $200B in value.... \And\ inadequate requirements had led to a $300B shortfall in company plans....
    [followup]
    Administration scraps proposal on pension plans - A rule on retirement plan conversions is to be reworked, AP via 4/08/2003 NYT, C14.
    [or the Journal version -]
    Pension-shift provision rescinded, by Schultz & Francis, 4/08/2003 WSJ, A8.

  2. Annuities to lose 3% rate floor, pointer 'inside' (to D2), WSJ, D1.
    Investors have flocked to fixed annuities, with their guarantee of 3% minimum annual interest, but state officials plan to replace the floor with one pegged to a floating rate.
    [Doubtless, downward floating.]

  3. FASB likely to add pension accounting, options to agenda, Dow Jones via WSJ, C12.
    The nation's accounting-standard setter...the Financial Accounting Standards Board [FASB] is set to vote today on whether it will take steps to overhaul rules for pension accounting, and whether it will work on new rules that would force companies to count employee stock options as a compensation expense. "It's pretty inevitable that they'll add options accounting [which has] a lot of backers this time,"..\..said Robert Willens, acctg specialist with Lehman Bros....
    [But presumably pension accounting is not such a shoo-in.]
    [Yep - followup -]
    Accounting panel to ovehaul regulations on stock options, Bloomberg via 3/13/2003 NYT, C5.
    [Not in the headline, but -]
    ...The Board also agred to push for greater disclosures from companies on pension fund accounting. Current rules allow companies to include income from estimated gains in their pension funds even if those funds are actually losing money. The Board said it would seek to publish a draft rule within 6 months that would require companies to make quarterly disclosures of their actual return on pension plans, as well as plan assets and obligations....

  4. Florida's pension fund, pointer squib (to B4), WSJ, front page.
    ...owes Washington $517m, says a report delayed by HHS [Health & Human Services] official [Janet] Rehnquist [GOP] until after last fall's election.
    [Ooo, a Republican "Double Nepotism Special"! - Here's the main headline & sub -]
    Florida overbilled U.S. Government draft report says - The report said Florida either should repay Washington or accept reduced federal contributions to the fund in the future, by Sarah Lueck, WSJ, B4.

3/11/2003   eroding retirement - 3/10/2003   eroding retirement - 3/05/2003   eroding retirement -
  1. [Here's a self-contradictory article -]
    Working late: Your friends won't retire at age 65, but here's how you can, by Jonathan Clements, WSJ, D1.
    Most baby boomers won't be able to retire on time.
    [That's in line with our previous articles on this page and it means, of course, that we will continue to have too many workers to produce the goods and services that society needs, because it is this surplus that has, since the boomers hit the job market in the 1970s, flattened ordinary wages and peaked the take of the top income brackets higher and higher. OK. Next statements -]
    But you can.
    Sure the Social Security [SS] system could go bankrupt and most Americans have far too little saved for retirement.
    [Probably because most Americans, weakened by downsizing-not-timesizing capitalism into a surplus of them at the bargaining table to the point that organized labor has retreated to below 14% of the labor force and corporations are converting from fixed-benefit to el-cheapo pensions as fast as they can, have received so little of the profits of technology while the income gap has widened into a gulf and the top brackets are way beyond the stratosphere, beyond the ionosphere, way out in space in what they've received. Now comes Jonathan Clement's bizarre self-contradiction -]
    But the real problem is much more basic than that. If the baby boomers retire at age 65 [which he started by saying "most won't be able to" above], we won't have enough workers to produce the goods and services that society needs.
    [Guess there's no "real problem" then, Jonathan. You can't have it both ways. Yet he persists -]
    Here's what that means for your portfolio and what you can do about it.
  2. Quitting time: Over the next three decades, the proportion of the U.S. population age 65 and older will jump to 20% from 12%.
    [Which, according to his headline "Your friends won't retire at age 65" and his first sentence "Most baby boomers won't be able to retire on time," will have little effect on the number of working people because we'll be too poor to retire. But then comes that weird, self-contradiction again -]
    As a result, there will be just 2.7 working people for every person age 65 and older, compared with the current ratio of 4.7 to 1.
    [So what? Age 65 by his own repeated admission is becoming a meaningless indicator of how many retired people there are. Instead, the significant indicators are life expectancy (which may not keep lengthening if Bush keeps weakening Medicare) and average retirement-age expectancy, if most people ever get to retire. If some do, the question becomes, what is the ratio of workers to retirees at age 70 or 75 or 80 or later? He persists in his self-undermined scenario -]
    The implication: Even if every one of the babyboomers has saved diligently and even if the government cuts them all generous SS checks, we still have a huge problem.
    [Of course, but with gutted pension plans and stingy SS checks, virtually none of the babyboomers has "saved diligently" - they've been betrayed, just like the workers in China.]
    The fact [fact???] is, if all these folks choose to retire at age 65,
    [Jonathan, you putz, that is not an option for most of them, and you can't "choose to retire at 65" if it's not on the menu. But he puts his stupid fear in words anyway & then blames it on others -]
    there just won't be enough workers, aargue Robert Arnott and Anne Casscells in a study that will appear in the March/April issue of the Financial Analysts Journal....
    [With financial "analysis" this acute, who needs the Science Fantasy Journal? They even get in the economy-destroying strategy of bigger population -]
    Greater immigration could boost the U.S. workforce and thus ease the situation [of higher costs of part-time nursing care for elderly]....
    [The eternal economy-punishing drive of the relatively wealthy to keep relatively unskilled labor as common and cheap as water and subsidized corn syrup.]
    The production void could also be filled by developing countries, which don't face the same immediate demographic crunch that confronts the U.S., Europe and Japan....
    [Oh, a "production void" in the most highly technologized and robotized economies in the world? Ri-i-ight. What planet are these people living on? In what past century have their brains sprouted roots and built feudal keeps? Gotta stop. This feast of contradictory scare scenarios, this disinformation, this New Speak, is on par with Orwell's 1984.]

  3. Retirement, interrupted - Back on an early shift, but at half the pay, by Kelly Greene, WSJ, B1.
    Rick Blenis [58] saw his savings fall 40% from the stock slump, prompting him to return to work. [photo caption]
    [Whoa, check out this "poor guy" -]
    ...Four years ago...he took an early-retirement package from his job maintaining equipment for phone company GTE. Back then, his retirement seemed secure and comfortable, with a nest egg valued at about $500,000. Now his savings have plummeted 40% to roughly $300,000.
    [How many older Americans have that kind of "chickenfeed." Let's all shed a croc tear for this poor little rich boy.]
    The stock market did part of the damage; Mr. Blenis did the rest. He locked himself into a plan that requires him to withdraw $2,000 from his account each month. Leery of losing more in the market, he uses part of the money for living and plunks the rest into a savings account.
    "I'm not broke, but I still have to work," Mr. Blenis muses over a Budweiser....
    [Oh yeah? How do ya figger that, given your surviving $300K and your current wage level? -]
    His pay, about $10.50 an hour, is half of what his salary was four years ago..\.. With a truckload of auto parts, working for a chain of car dealerships, he covers about 285 miles of highway every weekday, making two dozen stops by midafternoon at garages dotting southwest Florida.... He simply wishes he could...have the flexibility to take off now and again on extended camping trips with his 55-year-old wife, LaDonna, in their travel trailer. His earnings supplement the roughly $29,000 a year his wife makes as an office manager of a small business.... [Sorry, no sympathy. If this guy has problems, who needs solutions? He's gotta be in the richest 0.01% of the world.]

3/04/2003   eroding retirement - 3/01-3/2003   eroding retirement -
  1. 3/3   At 58, starting over, pointer blurb (to B1), WSJ, front page.
    Many American retirees are returning to work because the stock slump has ravaged their nest eggs. Carolyn Brady, living with her sister and struggling to pay for needed dental procedures, is one of them. First of a series.
    [And the indicated article -]
    Retirement, interrupted - Back to work, reluctantly - Carolyn Brady bet her savings on tech and telecom stocks; $8.80 an hour at Wal-Mart, by Robert Gavin, WSJ, B1.
    ...Carolyn Brady, living in her grown niece's room near Boise ID, sees retirement as a long way off now. [photo caption]..\..
    The slumping stock market has destroyed the nest eggs of millions of people in the last 3 years - erasing at least $678B in US retirees' savings, according to the UMich's Health and Retirement Study.
    Facing sudden financial straits, many retirees have gone back to work; others have postponed retirement, hoping to rebuild their savings.
    [thus worsening the hidden labor surplus of the 1970s babyboomers, the 1980s housewives, and the 1990s unprecedented Democrat-manipulated volume of immigrants. And when labor surplus intensifies, downward pressures on wages strengthen, centripetal forces on national income increase, unspendable spending power consolidates in "black holes" in the top brackets, and classic depression returns. And all because we chose the wrong fork in 1933. Relaxing into sharing the vanishing work instead of continuing to strain for sufficient makework dba job creation is the only sustainable route out of this, and it stops the agism of retirement by switching to weekly, even daily 'retirement' via longer-weekends and shorter workdays, and then, of course, extending it all the way up and down the age cohorts. What madness to still be working the 1940-level of working hours and longer, when we're surrounded by technology that we ourselves designed to take the stress off us!]
    The portion of Americans ages 55-64 who are working or looking for work surged 3% since Jan/2001, to 62.6%, according to the Mich. survey. That increase is "unprecedented in postwar US economic history," says Andrew Eschtruth at the Center for Retirement Research at Boston College.
    ...Carolyn Brady...invested most of her savings in high-risk ventures....
    [Remember how STOOPUD people were in the 90s and even most of 2000? They literally thought that stocks could not go down! Phil Hyde heard from a lot of these true believers as he asked 44,000 people for their signatures Jan-Jul/2000 to get 14000 gross, 12000 certified, 10000 required signatures, to run against Ted Kennedy for US Senate that year. People said to Phil, "You're two years too early." Unh-unh, 6 months max. 'Course Phil bailed out of the market with Greenspan back in the early 90s - had better things to monitor than 'the heat in the kitchen' - stock markets sit on industrial consumer markets, sit on personal consumer markets, sit on job markets. Phil was monitoring the unnoticed damage in the anchoring job markets, which was negligible 1941-1970, low in the 70s, medium in the 80s, and high throughout the 90s. Then it went into hyperdrive and even the highly insulated and isolated financial markets took note. But Carolyn Brady wasn't born yesterday - she should have known better, having seen the stock dips in the mid-70s, early and late 80s, and early 90s.]

  2. [and then there's this little gem, which sortakinda follows on from the previous -]
    3/02   Too old to work? If you're over 40 and work for a big company, your future may well be tied to the fate of 6,400 Allstate agents who refuse to be 'streamlined' - The stakes are high - If the plaintiffs win, Allstate could be forced to pay hundreds of millions - But more important is what the suit could mean for older workers nationwide, by Adam Cohen, NYT Mag, 54.
    Allstate recruited new insurance agents in the 1980s with a brochure aimed at the dreams of time-clock punchers everywhere.... "Have you ever wanted a proprietary interest in a business?" ...How about "unlimited income potential"? And "job security"? Ron Harper...from Gainesville, Ga...had worked his way up in the supermarket business [but] was looking for something more stable.... Allstate[']s Neighborhood Office Agent program offered just the mix of opportunity and security he wanted.... In August 1989, Harper was assigned to the small town of Thomson, Ga. and he uprooted his family and began hunting for customers in difficult terrain.... After a few years, he had his book of business and was making a modest living.
    Then in 1998, Allstate reduced the commissions it paid its neighborhood agents.
    [Sorta like the airlines reduced the commissions they paid their travel agents? What happened then? We need a book about the change of guard, or at least the change of values, of CEOs as old-guard value-the-scarce-employee CEOs retired and new disposable-employee CEOs, spoiled by hidden but huge labor glut, took over, with NO CONCEPT that there was any relationship between their employees and their markets.]
    To make up the lost revenue, Harper's wife quit her job and worked for him at below-market wages.
    [A microcosm of the housewives who hit the job market in the late 70s and throughout the 80s as the postwar babyboomers replaced the World War II kill-off, pushed the balance from employment surplus to labor surplus, and ended the timely raises that had enabled the consumer base to absorb its own productive output between 1945 and 1970.]
    In November 1999, just past Harper's 10-year anniversary with Allstate, his supervisor called him into his office in Augusta. Harper and about 17 of his fellow agents were handed a box of documents...radically redefining their relationship with Allstate. Harper and the others would now be independent contractors. Their benefits, pensions included, would end.
    The box also contained [a] release, which guaranteed that the agents would not sue. They didn't have to sign, but if they refused, their selling days for Allstate were over.... The agents were filled with questions. Prime among them, What happened to the job security they were promised?
    [You putzes and the rest of American and world labor lost focus on the one thing that could give you leverage and security in the job market, that's what happened. And that thing was and is, adjusting the workweek downward as the level of worksaving technology moves upward, so you're not overwhelming the job market with less-needed manhours and cheapening yourselves into "disposable employees." And that loss of focus started with FDR in 1933 and continued in the CIO and then even the AFL and the combined union to this day. Hence their powerlessness and decline to 14% of the workforce. They allowed themselves to be bought off with a string of catchy short-term goodies designed by FDR (not at all a "traitor" to his short-sighted class after all) to distract them from the shorter hours bill. And they fell for it, hook, line & sinker. They "sold their birthright for a mess of pottage": an alphabet soup of gov't makework programs (WPA, CCC, NRA, TVA....) with its rancidity covered over with 4 flavors of FDR socialism (unemployment insurance, workmen's comp, minimum wage and social security), despite the fact that he had branded the shorter workweek as "socialism." All his programs have since been watered down except disability, so of course disability is a growth industry today with 5.4m Americans collecting. And if we were all working the maybe 4 hours a day that would be required to make a great living with all our worksaving technology under a timesizing (not downsizing) system, we wouldn't need any of FDR's programs, which after all, were a hodgepodge that had no internal coherence except to block the progress of shorter hours (see Hunnicutt, "Work Without End," chap.6).]
    But the managers were "on transmit, no receive," Harper recalls....
    [That's what happens when you're a surplus commodity.]
    The same meeting was being played out in Allstate offices nationwide. The company, which had more than 15,000 agents of various kinds, was offering all of its 6,400 employee agents - the longest-serving agents, and those with the best benefits - the same unrelenting terms....
    In the end, [Harper] signed the release. Then he sued for age discrimination.
    According to the federal government, age-discrimination complaints filed with the Equal Employment Opportunity Commission [EEOC] are up more than 24% over the past two years.... The old face of age discrimination was the solitary worker quietly tapped on the shoulder and put out to pasture.... These day, however, age discrimination is more often the product of broad-based company policies, like decisions to phase out entire job categories disproportionately held by older workers.
    [Seniority (expensive) has become a liability. As a positive, it's been replaced by *juniority (cheap).]
    That is precisely what Harper and his fellow agents have charged Allstate with doing. At the heart of their lawsuit is the claim that Allstate executives singled out one category of workers - employee agents - because more than 90% of them were over 40....
    [The Good Book says, Swear to thine own hurt and KEEP IT. It's simple common sense that business depends on predictability, and where promises are broken, business suffers. CEOs have broken sooo many promises to their employees that they're finally getting symptoms of shrinkage from their consumer base, and the national and global economies are going down for the count. There is no way out of this except or doing something intelligent and sustainable for a change = as the ultimate makework program, the Democrat way (as Democrat J.K. Galbraith pointed out, Democrats declared every major US war in the 20th century)
  3. [here's one of the other cases this lawsuit may influence -]
    3/3   U.S. bankruptcy judge clears ending pilot-pension plan, Dow Jones via WSJ, B4.
    [The Times' headline is blunter -]
    Judge rules US Airways can end pilots' pension, by Maynard & Walsh, NYT, C2.
    [Back to the Journal -]
    A federal bankruptcy judge...Stephen Mitchell..\..on Saturday ruled the US Airways Group Inc. can terminate its pilot-pension plan, removing an important hurdle to the 7th-largest US airline's emergence from court protection late this month.
    ["On Saturday"? They couldn't wait till Monday to betray their employees and weaken future, activating, centrifugal forces on spending power?]
    ...[Mitchell] referred to a federal arbitrator the question of whether the pension termination violates the pilot union's labor contract.
    [And here's the fashionable blackmail, instead of changing executive pay -]
    US Airways, which filed for bankruptcy-court protection from its creditors in August, has said it might be forced to liquidate if it doesn't terminate the pension plan, which faces a $1.7B funding liability....
    [Whatever happened to "the captain goes down with the ship"? In down-headed US business today, everyone else suffers first before top executives get touched - not a feedback system. Contrast Lincoln Electric, at least in the 1980s = "all sacrifice together, starting at the top." No wonder Lincoln has unparalleled employee morale, innovation, and productivity.]
    The carrier's ability to receive the last injection of interim bankruptcy financing and a $900m federal-loan guarantee to back a loan to fund its exit from Ch. 11 hinges on its resolution of the pension issue.
    [Sooo, they even got the federal gov't in on pushing this piece of the economy further down. Looming decision for US and other economies - in an age of unprecedented worksaving technology, do we so value the illusion of unlimited personal income and wealth - despite astronomical unspendable spending power involved and consequent wasteful inefficiency ("the Great Leak Upwards") - that we move toward euthanizing people in the non-top classes as soon as they can no longer support themselves? Don't shake your head - plenty of human societies, especially in harsh environments, have followed this strategy. We recall an essay on 'the last igloo' where elders of one eskimo population were sealed when they grew too old to do anything. We thought this essay was in Calverton's "The Making of Man" (1931) but it ain't jumpin out at us. There was also one about eskimos' black - but extremely adaptive - sense of humor. See someone slip off the ice into the water? - you on the shore fall down and roll around laughing. Staves off depression that could kill the whole band.]


For earlier retirement stories, click on the desired date -

  • Jan-Feb, 2003.
  • Oct-Dec, 2002.
  • July-Sept, 2002.
  • June, 2002 & previous.
    For more details, see our laypersons' guide Timesizing, Not Downsizing, which is available online from *Amazon.com and at bookstores in Harvard and Porter Squares, Cambridge, Mass.

    Questions, comments, feedback? Phone 617-623-8080 (Boston) or email us.


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