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

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Eroding Retirement, October-December/2003

12/31/2003   eroding retirement, as documented in the Wall Street Journal & NY Times -

• Corporate pensions face pressure despite stock rally, by Mary Walsh, NYT, C1.
  This year's stock market rally has added more than $100B to corporate America's depleted pension funds, but even that has not been enough to offset forces that continue to weaken the funds. ...Their obligations to their workers have spiraled up at an even faster rate than stocks have risen [because] as the baby boom generation ages, many more people are starting to claim their money....
  [Compare some good news for employees -]
  Judge rules against US Airways on calculating pilots' pensions, NYT, C1.
  [and]
  America West pilots ratify a 3-year contract, AP via NYT, C4.
  ...The contract that won approval...extend[ed] retirement benefits. [It] also includes a 7% annual contribution to the pilots' retirement fund.

• German youth leader urges: Let them use crutches, by Mark Landler, NYT, A4.
  ...instead of costly hip replacements..\.. Philipp Missfelder...by October 2002...was elected chairman of the Young Union, which claims 135,000 members. \He\ said, in an interview with a Berlin newspaper [Der Tagesspiegel] that elderly people are soaking up Germany's financial resources, with lavish pensions and gold-plated healthcare plans. Such largess, he said, comes at the expense of young Germans [no automation or robotization in Germany??], who he warned, will be strangled by the burden of supporting an ever larger population of retirees....
  [Ah, the problem of needing markets and not wanting to support them. Missfelder apparently has no answer to the Ford-Reuther paradox: F, "Let's see you unionize these robots." R, "Let's see you sell them cars." Pick one, Missfelder, military makework or timesizing.]
  Joblessness was, and is, a scourge in Bochum, an industrial city blighted by abandoned coal mines. But with long-term unemployment compensation, something [else] Mr. Missfelder fears will no longer be affordable, grinding poverty was made rare....
  [So what does this know-nothing have to say?]
  "It's important that in 10-15 years, we have a country with a high level of technology [no mention of the tech-inherent necessity of more free time] and a high level of wealth," he said.
  [All things are relative and relatively speaking, Germany is already a country with both these advantages. Here's another Dummkopf predicting, or aiming at, the present. Germany has nowhere to go but down - unless it wakes up to its own key advance, worksharing, and standardizes and extends it. As for the things Missfelder fears -]
  "Not everybody working at McDonald's. Not everything [ie: every job] going to China."
  [he has no ideas for preventing them.]

• Northwest Airlines seeks pension deferment, WSJ, A2.
  ...Northwest suffers, as do some other airlines, from huge pension liabilities at the same time the industry is posting record losses. And when plans get to a certain point of underfunding, plan sponsors must make accelerated contributions. Northwest \however\ will ask the IRS to reschedule some of its contributions due next year [2004] to its employee-pension plans, and spread them out over a 5-year period. ...The sums that are eligible...are $405m [owed] to plans for all unionized employees [except] pilots, and $67m due to the pension plan for salaried workers..\.. The nation's 4th-largest airline late [last year] made a similar request and this past spring received permission to spread out $454m in contributions due this year [2003] over 5 years....
  [This is getting to be a habit.]
  Northwest's plans are underfunded by about $3B;
  United [Airlines] must put more than $4B into its plans in the next 4 years if it doesn't win waivers [from the IRS] or legislative relief....

1. State budget cuts have forced, blurb, WSJ, front page.
   ...1.2m from Medicaid and other programs in the past two years, according to a study by an advocacy group.

2. Germany maps a jobless recovery - Government aims to boost unemployment rate and ask some to drop hunt for work, by Andrea Thomas, Dow Jones via WSJ, A13.
   [...while the U.S. doesn't even bother mapping it - it does not want to know the full extent of joblessness.]
   BERLIN - The German government has hit on another way to lower the country's unemployment rate: Tell the unemployed to stop looking for work.
   [Compare Argentina yesterday.]
   The government has quietly stepped up efforts to wipe jobless workers over 58 years old off the unemployment rolls, people close to the issue said. Several older unemployed workers said they have been approached by the Federal Labor Office asking them to sign a document that says they are no longer seeking work.
   [Gee, is a high unemployment rate really that big of a blot, that important? Guess that's a Good Thing. But why not just redefine it so it counts less or sounds less, like the U.S.?]
   In return, they get to keep collecting unemployment benefits until their pensions kick in. If a worker says he is no longer seeking work, he is no longer classified as unemployed.
   Allowing older workers to say they are no longer looking for jobs isn't new. The labor office publishes statistics on participants in that program. What's new is an apparent formalized push to persuade older workers to sign up.
   A person close to the labor office said the office has sent a memo to job centers around the country laying out a target for civil servants to get 75% of all unemployed people over 58 who come in to sign the agreement by year end....

• [Unemployment qua age-independent retirement -]
  Argentina: Paid but jobless, Bloomberg via NYT, W1.
  Argentina's jobless rate is falling in part because the government is paying people like Paulino Villalba to stay off the rolls of unemployed.
  [So the U.S. leads the way with a doctored unemployment rate and the Third World follows.]
  "I wish I could say I have a job," Mr. Villalba, 42, a former systems technician for the BellSouth Corp's Argentine unit, said during a demonstration by unemployed people in Buenos Aires last week.
  [It's going to take a willingness on Senor Villalba's part to share the vanishing work, since market-demanded work doesn't come out of thin air and the share of work per person (dba the length of the workweek) is a totally arbitrary and artificial construct anyway.]
  Pres. Nestor Kirchner's government says the 150 pesos ($51) it gives Mr. Villalba each month is the equivalent of collecting a paycheck for a job.
  [That gives us some idea of how '3rd-world' Argentina has become.]
  Mr. Villalba, who has been out of work for two years, has received the payments for about six months. Such handouts helped drive [ie: manipulate] down the jobless rate to a [phony] 4-year low of 14.3% in the third quarter from a record 21.5% in May 2002, the government said yesterday.
  Argentina's actual unemployment rate, counting those receiving government handouts, is still above 16%, said Pablo Morra, an economist at Goldman Sachs & Co. in New York.

• U.S. cancels pension plan at Kaiser, by Mary Walsh, NYT, C1.
  ...After Kaiser filed for Chapter 11 in Feb/2002, employees apparently began to fear for the future, and those who qualified for retirement pulled all their money out...while they still had the chance. That set off the equivalent of a bank run.... At Kaiser, the damage was extraordinary. By the time the company told employees that lump sums were no longer available last December, the plan had only 21 cents left for every dollar it owed in benefits. That is the lowest level of any major company pension plan to fail in years, the government said.
  The older Kaiser employees' rush for the exits will probably cost some of the younger employees some of their benefits. When a pension plan collapses, the Pension Benefit Guaranty Corp. insures the benefits, but only up to certain limits, which are set by Congress. The coverage is intended to replace a basic blue-collar pension, and it does not cover all of the benefits promised to executives or well-compensated managerial employees....

• Schwab to resume contributions to employee 401k's, AP via NYT, C4.
  The Charles Schwab Corp., the discount stockbroker, will revive its matching contribution to employee 401k accounts next year, in the latest indication of its renewed optimism after several years of layoffs and penny-pinching. The CEO, David Pottruck, told Schwab's 16,200 employees of the decision in a memo yesterday that acknowledged how dismaying the one-year suspension had been, particularly for a brokerage operation that had long praised the virtues [ah, the phrase is 'had long sung the praises'] of 401k plans. Schwab estimated it saved $48-60m by taking away the matching compensation....

1. The AARP backed out, blurb, WSJ, front page.
   ...of administration-sponsored Social Security forums, calling them too politically hot in light of its Medicare [dilution] endorsement.

2. U.P.S. looks to Congress for relief on pensions, pointer (to A1), NYT, C1.
   ...UPS is chafing at its requirement to cover retirees of other companies because of its participation in [portable] multiemployer plans, in which many employers pool the cost of providing pensions for members of a union.

1. 12/13 In Florida, Medicare shifts raise a cloud - A change in rules fuels elders' fears, by John-Thor Dahlburg, L.A.Times via Boston Globe, A25.
   In no state do senioirs make up more of the population than in Florida.... Florida's nearly 2.8m residents older than 65 "are bewildered" \by\ the recent 'reform' [our quotes] of Medicare.... "They don't know what's happening to their health plan," said Nana Klein...a retired NY state civil servant who keeps track of senor-related legislation for the AARP chapter in [Coconut Creek, a] suburb of Fort Lauderdale.
   Depending on who's doing the talking, by presiding over the greatest transformation of Medicare in its 38-year history, pResident Bush has -
   • either outfoxed the Democrats and has made major inroads in their voter base to reinforce his chances for reelection in 2004.... Bruce Vogel, an economist at the UFla/Gainesville...an assoc.prof.in the...Dept. of Health Policy & Epidemiology \said\ "It's an increased Medicare subsidy for seniors.... Most seniors are eventually going to see some benefit.
     ["Eventually"?? Seniors don't have "eventually."]
   • or [Bush] has presented the elderly with a prettily wrapped time bomb that will damage their long-term interests. ...Said Frank Kaiser...of Clearwater, who runs a website devoted to senior issues called *suddenlysenior.com, "..\..This 'reform' is the biggest Medicare fraud in history, but most seniors won't realize that until 2006. It has booty for the insurance companies, giveaways for the drug companies. It's got stuff for everybody - except seniors."...

2. 12/13 Brazil: Pension curbs pass, Bloomberg via NYT, B3.
   Brazil's Senate gave final congressional approval to Pres. Luiz Inacio Lula da Silva's legislation curbing public employees' pensions, a measure that he has called critical to naroowing the country's budget deficit. ...The legislation...raises the retirement age for federal workers and forces them to finance a bigger share of their own pensions. ...Brazil [has] $400B in debt, which is the largest among the world's developing economies.
   [Never mind this effectively cuts contracted pay and further weakens the economy's already weak consumer base.]

1. Bush signs Medicare measure, pointer (to A1), NYT, C1.
   ...into law...giving [some] elderly prescription drug coverage for the first time and changing the system so that private insurance companies will have a much bigger role.

2. Medicare law's costs and benefits are elusive. NYT, front page.

1. Cut off twice, retiree [Esther Pollack of Great Neck NY] distrusts Medicare HMOs, WSJ, B1.
   [And as colleague Kate points out, Medicare HMOs are exactly what we're going to get under the new Medicare bill.]

2. Pension shenanigans - One more solution in search of a problem, editorial, WSJ, A12.
   ...Both houses of Congress seem determined to turn pension reform into bailout city. And that's too bad. Private defined-benefit pensions are a mess - underfunded by about $400B and in need of a long-term fix. The current problem was generated by a double whammy:
   1. pension plan assets lost a lot of value when the stock market collapsed;
      [this would not have been a problem if CEOs hadn't gone with ridiculously optimistic performance forecasts]
   2. and pension liabilities, which are discounted based on 30-year Treasurys, soared as interest rates fell.
   The result is a [wide] asset-liability gap that must be closed if pension promises are to be kept....

• GM, other firms boost earnings by pouring billions into pensions, by Schultz & Francis, WSJ, A3.
  ...Over the past year, employers have complained that a combination of low interest rates and investment losses have caused liabilities to balloon, prompting companies with seriously underfunded pensions to make mandatory contributions to their plans. In response, many...have cut pensions, and next week the Senate is slated to vote on a measure that would let employers with the sickest pension plans suspend contributions for years.
  But..\..for all the wailing about how the so-called pension crisis might force many employers to put money into their pension plans, there may, in fact, be no better investment for most companies. And many of them are taking advantage of it [and] are only too happy to put money into their pensions. \Some\ companies have pumped billions of dollars into their pension plans this year, even though most haven't been required to contribute a dime. Rather, by contributing to their pension plans, companies are assured of a guaranteed, effective return that can exceed 40% in the first year, thanks to an interplay of tax and accounting rules....
  • In Q3, GM shoveled $13.5B into its pension plans, bringing its total contributions for the year to $14.4B. ...The company assumes that the pension assets will return 9% over the next year [to] boost its bottom line....
    [Wasn't over-estimation of returns a huge part of the pension crisis in the first place? Here we go a-ga-ain, and shouldn't behavior of a company's pension funds HAVE NOTHING TO DO WITH its corporate bottom line?! Of what relevance is pension-fund investing to its corporate mission of making vehicles? Same goes for the other examples -]
  • Boeing Co. stuffed $1.7B into its pension plan this year....
  • Caterpillar Inc. contributed $563m to its pension....
  • 3M Co...$600m....
  [Followup -]
  Pension gap is closing, GM reports - Bond offering helps to erase large deficit, 12/13/2003 NYT, B1.
  [Compare -]
  Disney [expects] rise in [its] pension contributions, 12/13/2003 NYT, B2.

• [after the bad news, some possible good news for a change -]
  Medicare triumph may foil Bush plan for Social Security, by John Harwood, WSJ, A4.
  ...Hidden in Mr. Bush's victory...is a big political setback. While the Medicare bill takes him closer to a 2nd term [aaargh], it takes him further from achieving one of his most important 2nd term goals. The substance of the deal [on Medicare], and the manner in which he achieved it, make 'fixing' [our quotes] Social Security during his pResidency harder - perhaps even impossible.
  [Yeah, he wants to 'fix' it alright!]
  ...There are at least 3 reasons for this.
  1. ...The way Republican leaders steamrolled their Democratic counterparts. While shoving the bill through the House on a precedent-shattering 3-hour House rollcall, they stiffed liberal icon Ted Kennedy after having relied on him to shepherd Medicare legislation through the Senate in the first place.
     [Let this be a lesson to gullible Ted.]
     A veneer [note willingness to trick with superficiality] of bipartisanship provides critical political cover for changes in entitlement programs. But Mr. Bush was left with a thin veneer - and the price for recreating one on Social Security has gone way up.
  2. ...The way Mr. Bush's party lashed its fortunes on Medicare to AARP. That alliance shielded Republicans from attack, and burnished AARP's credibility for independence from Democrats [while destroying AARP's credibility with progressive seniors, many of whom are now cancelling their memberships and looking for another organization to represent them in DC. But] AARP opposes Mr. Bush's ideas on Social Security - strongly....
  3. ...Republican warriors on Capitol Hill [are not] primed for battle.... Rep. Tom Davis [Va.] calls Mr. Bush's Social Security plans "a bridge too far." His successor \as\ chairman of the party's campaign committee...Rep. Tom Reynolds [NY] says neither the House nor Senate is ready for "a quick-fix solution on Social Security." And no wonder. ...Mr. Bush...and Republican leaders used...billions of dollars [in giveaways] for healthcare providers and Medicare beneficiaries \to\ amass majorities [to push thru the Medicare white elephant]. Just like his earlier taxcuts and farm bill wins, Medicare was an expensive victory. And that in the end is the biggest obstacle that the Medicare debate has erected for Social Security overhaul.... With yesterday's budget surpluses heading toward $500B deficits...the Bush administration's cash register is near-empty....

• [re the buzz that the new Medicare bill will actually make drugs more expensive -]
  Biotech industry banks on Medicare law for help on drug bills, by Andrew Pollack, NYT, C4.
  ...Drugs developed by biotech companies are among the most expensive in the world. A year's supply typically costs patients or insurance companies $10,000, and in some cases must more. Consequently, patients, insurers and Medicare often resist [or in the case of pre-Bush Medicare, resisted] paying for them....

1. Scant support is seen for rivals of Medicare, pointer digest (to front page), NYT, C1.
   The most politically sensitive feature of the new Medicare legislation - its attempt to force the traditional Medicare program to compete with private managed care plans - is also the least likely to come to fruition on the 7-year schedule set by Congress, according to health policy experts.
   Many Medicare enrollees fear that they will end up with less-generous benefits in a privately run program, according to Len Nichols, a VP of the Center for Studying Health System Change, a nonprofit research center in DC.
   [Quite probable, given The Great Leak Upward = uncapped private-sector executive pay and perks, as predicted by the G.K. Chesterton Pan-Utopian Flaw.]

2. Veterans of science labs, chimps will soon get own retirement haven, by Jeffrey Gettleman, NYT, A20.
   ...In the woods outside Shreveport, La., construction began last week on Chimp Haven, a $29m federally financed project deemed a humane solution to the growing surplus of chimps. \It\ will soon be the nation's largest sanctuary for chimpanzees....
   For more than a decade, Linda Brent, a Jane Goodall protegee, and a cadre of animal rights advocates searched for a place where chimps could wile away their golden years. In 1998, a Shreveport developer heard about the project and helped persuade Caddo Parish officials to donate 200 acres of thick forest to Chimp Haven. It may not be equatorial Africa, but it is pretty lush. The first of 300 graying chimps are expected to hit the woods next year..\..
   Some people...made cracks that if chimps got a federally financed retirement home, maybe they should also get 401Ks.
   [Don't laugh. In the future where we're a little more educated and enlightened and tolerant ourselves, we'll gradually integrate the other intelligent species into our society on a more and more equal footing.]
   ..\.."When we first heard about this, we all started laughing," said Billy Hanna, administrator for Caddo Parish, which includes the city of Shreveport. "But as we learned more, we realized that we as a society really owe these chimps."...

1. Pension disclosure rules, Reuters via NYT, C4 (// 11/28 WSJ, C7).
   Companies will have to estimate and disclose pension benefits to be paid out to employees for each of the next 5 years as part of a new rule to improve disclosure on corporate pension plans, accounting rule makers [in the] Financial Accounting Standards Board [FASB]..\..agreed yesterday....
   [Makes sense given that taxpayers are bailing out private-sector pension plans that CEOs have looted right and left through the Pension Benefit Guaranty Corp.]

2. What Medicare savings?, pointer digest (to C2), NYT, C1.
   The assumption in the Medicare legislation is that privatizing big parts of the program will save money over the long run. A look at 30 years' worth of data shows this to be false.
   [Main headline -]
   Economic scene - Does Medicare or private insurance do a better job of controlling healthcare costs?, by Jeff Madrick, NYT, C2.
   [They even have to ask this given the chaos of paperwork and jostling administrative systems in the American healthcare "system" today? And how do you control costs when the "Big Leak Upward" = uncapped executive pay, is still wide open?]

1. Sweeping Medicare change wins approval in Congress; pResident claims a victory, NYT, front page.
   1. AARP support came as group grew 'younger', by Stolberg & Freudenheim.
      ...During the past decade, AARP has moved aggressively to expand its membership by focusing on people 45 and older. In polls and focus groups, the organization learned [baby] boomers would support an experiment with private competition in the gov't-run Medicare program - a contentious provision that many elderly people, AARP's traditional constituency, bitterly oppose....
      [So not only have the plutocrats enlisted rednecks and poor Southern whites in their own impoverishment, but also babyboomers. Probably part of the "new reality" - stark reality, that is - whereby our fathers and grandfathers fought to give us the weekend, but our lower-expectation children - spawned into job markets flooded with waves of automation, computers and now robotics and immigrants and starved by mergers, downsizing and outsourcing, all playing against a concept of workshare per person that halved between 1776 and 1940 while wages multiplied but that hasn't declined a minute since - have given the weekend back. Prof. Philip Hauser of Chicago, the prophet of rising expectations, would be appalled.]
   2. Senate backs bill - Measure provides drug benefits for millions of elderly people, by Robert Pear.
      ...by a vote of 54 to 44....
      [Another article has the subtitle "Beware the donut" - It helps the rich who can afford private care, it helps the destitute, but there's a "hole in the middle" - it stiffs (ie: drives downward into destitution) the middle class - another weakening of the centrifugal forces in the American economy, another acceleration for the spread of the "income gap," the "dual economy" and the slide into the Third World. Just as well. America was getting dangerous, and now, lipserving "freedom" and "liberty," it is stifling and anesthetisizing itself by defaulting more and more money to the relatively sluggish megaholdings in the top income brackets. Economic arthritis? Hydrocephaly? Black Hole? Whatever. We must still publish critical economic innovations here because more eyes around the world are still on this one economy than any other, if only to make sure it's increasingly strained agents aren't targeting them with toxic "help."]
      The bill, officially estimated to cost $400B over 10 years, would remake Medicare. It offers drug benefits to 40m elderly and disabled people, while giving insurance companies and private health plans a huge new role in the Medicare program....
      [Two words:
      1. makework, and
      2. vulnerability - if the Bush regime manages to PR-blast its way to tightening its tenuous grip on power in 2004, watch how fast this gets attacked, under pressure to maintain and expand taxbreaks for the rich, all part of the general tidal wave of surplusing and cheapening the workforce - see next article. It was Arthur Dahlberg who grasped all this in 1932 (Jobs, Machines and Capitalism, p.xii): "Never - with the exception of a few years during the World war {now wars} - has Capitalism been permitted to function under a...'scarcity of labor.' It has always been forced to operate under a {chronic} scarcity of job and business opportunity."]

2. Some experts foresee revolt by elderly over drug benefits, by Gardiner Harris, NYT, A18.
   ...The legislation provides billions in tax incentives to discourage employers from dropping the drug benefits they provide to about 11m retirees. But if...many large employers calculate that the incentives are not enough, millions more retirees than [ever over-optimistic] Congress expects will watch as their relatively rich drug benefits are replaced by the government's more meager package.
   They will be forced to trade in a Cadillac for a Chevrolet....
   [or maybe just a Chevrolet for a Yugo.]
   In 1988, Rep. Dan Rostenkowski...had to dash through a Chicago gas station to avoid a mob of frail constituents chanting "coward."
   [Like the AARP today.]
   ..\..With good intentions and bright advisers [and that ever-present over-optimism], Congress overwhelmingly passed legislation in 1988 that would insure the elderly against catastrophic medical expenses, including crushing drug costs. But affluent retirees quickly concluded they were being [forced] to pay for something their employers already gave. They rose in revolt. Congress repealed the legislation within months....
   [All these little legislative flailings are but fingers in the dike against a massive tidal wave of cheapening and disempowering labor surplus that has arisen since, spouting praise for "flexibility," we rigidified the standard American workweek at the post-mechanization, pre-automation 40-hour level ever since 1940 when we first enacted it. Consumer markets are swampy or credit-cliff-edged all over the world, with big money straining to find the next little pockets of uptick. Until we maximize our consumer markets by maximizing our workforce by ending the downward inflexibility of the workweek, we are roadkill.]

1. Estate taxes will turn sharply lower on Jan. 1, WSJ, D2.
   [Their megamillions will be less taxed and so your mini-thousands will have to be more taxed. The economy is the only 'sport' where all the teams don't start again at 'zero games won' each new season. If we ran sports like that, the leagues would break apart - and that's what will happen to our species if we keep running the economy like that - the Eloi and the Morlocks. Note this goody right below it -]
   Employees will get only modest raises in 2004, WSJ, D2 (continued from D1).
   [...because our sharing technology is still so primitive, we don't yet even share the vanishing work.]

2. Angry Democrats took aim, pointer blurb (to A4), WSJ, front page.
   ...at the head of the AARP for what they see as a sellout on Medicare legislation....
   [and the related blurb -]
   Entitlements without end, pointer blurb (to A20), WSJ, front page.
   Don't be swayed by the short-term politics: Seniors won't be thanking Republicans when they learn their new Medicare benefit is worse than the current one.
   [Followup -]
   Congress completes details of Medicare bill - Opponents say AARP has conflicts, 11/21/2003 NYT, A27.
   [More followup - ]
   AARP gone astray - From an advocacy group to a business, op ed by Paul Krugman, 11/21/2003 NYT, A31.

3. United Airlines seeks delay in pension contributions, pointer digest (to A1), NYT, C1.
   ...about $2B of required pension contributions over the next three years, having concluded that it is the only way to bring the airline out of bankruptcy. Under the plan, the federal agency that insures pensions would take on significant risk and is expected to resist the plan.
   {As Chomsky saith, they privatize and concentrate the profit and socialize and spread the risk.]

1. Opting out, pointer summary (to D2), WSJ, D1.
   Fewer employees are taking part in 401k plans this year, even as employers work to 'improve' [for themselves only!] the retirement-savings vehicles....
   [Main headline -]
   Employee participation is dropping in 401k plans, WSJ, A2.

2. Medicare bill supporters confident of passage - The White House tries to quell doubts on both sides of the aisle, NYT, A12.
   [and 11 pages further -]
   The proposed prescription drug Medicare bill isn't perfect - But millions of Americans can't afford to wait for perfect - Tell Congress to pass it now, full-page ad by AARP, NYT, A17.
   [and so -]
   6 Democratic [presidential] candidates attack Medicare measures - A forum's guests criticize the stance of their host, AARP, NYT, A12.
   [but also supporting the bill -]
   The Medicare choice, editorial, NYT, A28.
   Despite its shortcomings, the Medicare prescription drug bill heading for a vote in Congress is worthy of passage.... Millions of middle-income Americans will get only modest help from the program, and they will have to cope with a crazy-quilt pattern of benefits. But fortunately, the bill is strongest when it comes to the most important target groups: elderly people with low incomes or very high drug bills....
   [Great, so it basically pushes everybody down to those levels so it can help them in extremis.]

1. Medicare plan covering [some] drugs backed by [conflicted-interest] AARP - GOP pushes for passage - Endorsement called vital - Kennedy keeps up his attacks on bill, NYT, front page.
   [Compare -]
   A guide to who wins and loses in Medicare bill, by McGinley & Martinez & Abboud & Fuhrmans & Lueck & Landers & Murray, WSJ, B1.
   
   • ...Much of the health industry, including drug companies, hospitals and rural health providers, would be big winners.
     [Note who comes first and it ain't the customer.]
   • Seniors would get the right to an important new pharmaceutical benefit, though some critics say the amount being spent is too small.... But payments would be frozen or would decline for some services, medicines and equipment currently covered by Medicare..\..
   • Employers would get a sizable, tax-advantaged subsidy to keep retirees in existing health plans.
   Even the winners must worry about longer term consequences, such as the cost of the benefit nudging the government toward regulating drug prices....
   [and related -]
   AARP boosts Medicare pact - Seniors' group backing confounds opponents, helps Bush, WSJ, A4.
   [But then, the AARP is an insurance company now, with a BIG conflict of interest.]

2. Is pension crisis a scapegoat? by Francis & Schultz, WSJ, C1.
   Companies across the country have been taking an ax to their pensions, citing rising costs and the declining health of their pension plans.
   [Thanks to CEOs' own subtle raids upon them.]
   This year, some, like investment bank Morgan Stanley and benefits-consulting firm Watson Wyatt & Co., have cut pension benefits, while a few, including US Airways Group Inc., have killed pension plans altogether.
   Employers eager to cut pensions blame the "perfect storm" of falling stock prices and low interest rates. That confluence caused corporate pension plans to go from being 23% overfunded at the end of 2000 to 19% underfunded at the end of last year, according to Bear Stearns & Co.
   [Those two couldn't have made a 23+19= 42% drop without widespread corporate underfunding based on over-rosy forecasts.]
   But some employees say their pension plans aren't as sick or costly as their employers claim, and argue that the companies are just using temporary market conditions as a pretext to cut benefits.... Even though [some] pension problems appear to be ebbing..\..thanks to a 'recovering' stock market [our quotes]...companies continue efforts to reduce or kill pension programs....

• Xerox settles pension suit with retirees, by Mary Walsh, NYT, B1.
  ...over the way it calculated pension benefits by paying an additional $239m to thousands of employees who retired from 1990 to 1999....
  [Even the top executives of a company like Xerox, once good to its employees before the massive downsizing and labor surplus that started in the 70s and 80s, have become dismissive and exploitative of their workforce = more pressure to discipline management with a perceived shortage of labor via Timesizing.]

1. Employers denounce move on pensions, Reuters via NYT, C4.
   DC - Employers on Thursday [11/13] denounced a decision by Congressional negotiators to bar the Bush administration from finishing rules that would allow companies to convert pensions to "cash balance" plans. ...Older workers say [the changes would] reduce their payouts....
   [Are you getting the feeling that there is a massive shift away from sharing in this country? - starting with the angry "Network" scene where an angry middle-class white male sticks his head out his apartment window and shouts "I'm mad as hell and I'm not going to take it any more!" Or maybe that was just where the superwealthy co-opted the middle class in its own demise. If the middle class, which sets the standards, can be convinced that the poor are lazy bums totally responsible for their own poverty, who should be kicked and not helped, then helping becomes a bad thing and kicking becomes a good thing, and it spreads up the income brackets. Pretty soon there are dozens of new billionaires, thousands of new millionaires, and millions more poor people and millions fewer in the middle class. This obviously clobbers the consumer base, so to prop up the consumer base in spite of its starvation by the general passing of costs from the top to the middle and bottom income-ranges, sycophant economists like Alan Krueger develop the theory that population growth per se creates consumption and jobs - never mind at lower and lower levels. Phil and Kate went out Sat. night to a tiny Brazilian buffet in a suburb of Boston and had a meal for less than $12 - that's a 1960 price level! It's "astrophysical economics" - there are periods of balance between the centripetal or concentrating forces on money, and periods of imbalance when the centripetal forces overwhelm the centrifugal forces. The difference is, whether there is a labor "shortage" which occasions much whining from the rich but a general balance of forces, or whether there is a labor surplus, usually officially denied or distracted-from, which occasions imbalance and we move toward the dread Black Hole economy, where the concentrating forces are so strong they suck all the money within an ever-widening perimeter into increasing densities in the middle, and less and less "trickles" out beyond the "event horizon" of the Black Hole, rendering those in the astronomically rich top income brackets ever more insulated, isolated, powerful, unsustainable, and vulnerable. Usually the labor shortage only happens during major wars, like World Wars I and II (WWs 1&2) which both produced surprising prosperity. It's long periods of relative peace where the wealthy busy themselves dismantling the money centrifuges, big and small, throughout the economy, and without them, larger and larger shares of the national income "default" in their flow to - da dada daaaaa - the top brackets. This is what has been going on since the end of WW2, all through the so-called "postwar" period, even though there have been little wars occasioning little pauses in the general deterioration throughout that period, - Korea, Vietnam, ongoing Cold War, Grenada, Panama, Falklands, Somalia, Gulf 1, the twin domestic wars on drugs and crime that changed the war on poverty into a war on the poor, Afghanistan, now Iraq, and all throughout the postwar period, in a mind-boggling switcheroo, the big victims of WW2 have transformed themselves, with UK and US help, into the epicenter of violence in the oil zone, creating steady markets for arms suppliers. So what do the rich do now? Support more population! Make sure the Vatican keeps slamming the pills and gays. Make sure the very definition of America is Immigration, legal shmegal. And paint anyone worried about ecology as an alarmist sissy pinko. Oh yes, and unChristian too. When the GOP got in bed with the religious right in 1980, the moderates begged them not to but it didn't work. Now as usual, all the forces of wealth and God are arrayed against balance and progress. Pathetic. Well, guess it helps to have a developed blueprint of a flexible sustainable alternative, and our entry is Timesizing.]

2. The Trojan horse - What's inside that Medicare bill, op ed by Paul Krugman, NYT, A25.
   What are we going to do about Medicare? That should be the subject of an open national debate.
   But right now Congressional leaders are trying to settle the question by stealth, with legislation that purports to be doing something else.
   An aging population and rising medical costs will eventually require the nation to provide Medicare with more money or to cut benefits, or both.
   Meanwhile, there are demands for a new benefit: a gradual shift away from hospital treatment and toward the use of drugs has turned the program's failure to cover prescription drugs into a gaping hole.
   A Congressional conference is now trying to agree on prescription drug legislation.
   But beware of politicians bearing gifts - the bill will contain measures that have nothing to do with prescription drugs, and a lot to do with hostility to Medicare as we know it. Indeed, it may turn out to be a Trojan horse that finally allows conservative ideologues, who have unsuccessfully laid seige to Medicare since the days of Barry Goldwater, to breach its political defenses....
   [Krugman continues with an interesting, more detailed, more technical discussion of the background, but the above gives the general situation for those who've been wondering.]

1. Nearly half of workers cashed out 401k plans, pointer summary (to D2), WSJ, front page.
   ...instead of rolling them over if they changed [changed or just lost??] jobs last year, Hewitt Assocs. found.

2. A Medicare deal emerged, pointer summary (to A3), WSJ, front page.
   ...but rebellions by Democrats and a powerful House chairman threaten to snag what the White House and top legislators see as the best hope of getting drug coverage this term.
   [NY Times version -]
   Tentative Medicare pact offers [some] drug benefits to elderly - Some Democrats fear a deal could threaten the Medicare system, by Robert Pear, NYT, A18.
   ...Republicans said they had secured the tentative deal by scaling back their demands for direct competition between private health plans and the traditional Medicare program, which serves more than 85% of the 40m beneficiaries....
   But the Democrats' main strategist on healthcare issues, Sen. Edward Kennedy of Massachusetts, rejected the package, especially a proposal to lure private health plans into Medicare with billions of dollars in new federal subsidies....
   [The makework rolls on, all unnecessary when replaced by 'sharework' = systemically sharing the vanishing work, alias worksharing, for example, via the Timesizing design.]

3. Medicare and Medicaid will spend, pointer summary (to D3), WSJ, front page.
   ... $82B a year by 2010 to treat Alzheimer's, and studies give a grim picture of the caregiver's lot.

4. Left with little, pointer summary (to D2), WSJ, D1.
   Only 15% of people born between 1946 and 1964 expect to receive an inheritance in the future, according to a report by AARP, based on data from the Federal Reserve Board's 2001 Survey of Consumer Finances.

5. North Carolina orders review of Alliance Capital Mgmt pension contract, Bloomberg via NYT, C15.
   ...for improper mutual fund trading../.. Alliance Capital Management Holding, a New York-based money manager...is the largest publicly traded US money manager, with $453B of assets at the end of Nov....

6. Delta forecast, pointer summary (to D5), WSJ, front page.
   ...a worse than expected loss, partly because an exodus of senior pilots increased pension obligations.

1. Failed pensions: A painful lesson in assumptions [or CEO greed?] - Companies can game the system to reduce pension obligations, by Mary Walsh, NYT, front page.
   [Mary has really messed up some of the wording here for some reason, so we're just going to invisibly unmess it to get the message across.]
   Robert Bowden retired from his job as accounts manager for a large trucking company with a plan to do some traveling. But his company's pension plan collapsed this year, and his annual payout was cut in half from $48,000.
   Mr. Bowden and other retirees of the company, CNF, see a culprit. In a lawsuit, they accuse the company of failing for many years to set aside enough money in the plan. The company did this, they say, by assuming they would retire much later than the earliest option. Though the CNF plan offered full benefits to people as young as 55, the company projected people would stick to their desks until they turned 64.
   [Another cell of top executives declares class warfare. Here Mary regains her articulateness -]
   A look at documents made public in the retirees' fight at CNF and at a few other companies, including US Airways and Bethlehem Steel, shows that companies have great leeway to tweak certain crucial assumptions about the future -
   • when their workers will retire,
   • how long they will live,
   • and which way interest rates will move,
   among others. A year shaved off an estimate here, a decimal point's difference there, can signficantly reduce a company's pension obligations on paper [and] the company can 'save' millions of dollars in pension contributions.
   But if the company shortchanges its pension fund year after year and the company then gets into trouble, the plan that looked healthy can fail, seemingly out of nowhere [ha!], leaving workers stranded.
   "I'm in financial survival mode," Mr. Bowden said. At 59, he recently refinanced his mortgage in Lake Oswego, Ore., to conserve cash while looking for a cheaper place to live....

2. Pension Benefit Guaranty Corp., pointer summary (to A3), WSJ, front page.
   ...warned Congress against giving airlines and other firms a break in pension-funding requirements.
   [More demonstrations of how many little money-centrifuges throughout the economy the top brackets can dismantle or simply redirect toward themselves - until they've got themselves another Black Hole Economy that impoverishes and endangers them along with everyone they've looted.]

• The secret life of a retirement account - An IRA turned tax-shelter, by Browning & Johnston, NYT, C1.
  Grant Thompson, a large accounting firm, has marketed a way to reduce taxes using Roth IRAs - investment accounts that allow people to invest money and keep what they earn taxfree. Though contributions to Roths are limited to $3,500 a year, Grant Thompson's prospectus says use of a shell corporation owned by the Roth can shelter much larger amounts of income.... [diagram caption]
  [Pathetic. Those with the most money waste most of their lives straining to keep it or get more.]

1. 11/10   TIAA-CREFF CEO Herbert Allison to get at least $9 million this year, by Dale &
   Hayashi, WSJ, C16.
   NEW YORK - [The] pension fund...revealed its CEO's total pay package for the first time...just after [he] was named one of eight members of the 'independent' board [our quotes] proposed for the NYSE by Interim Chairman John Reed....

2. [meanwhile, what are these few thousand guys in the top brackets, who are grabbing so much, doing for the millions of other American pensioners?]
   11/09   How the GOP is subverting Medicare, op ed by Thomas Oliphant, Boston Globe, D11.
   [Tom trips all over his "segments" and "parts" of segments, but we'll try to make some sense of it -]
   WASHINGTON - Sometime this week, a group in Congress will try to get the government to intervene more forcefully in one of the most important markets in the country, healthcare, [while] favoring one segment [the energy business] with lavish taxpayer subsidies and penalizing the other [= Medicare beneficiaries] with harsh federal rules. The idea is to herd Medicare beneficiaries into that part of the segment [huh?] favored by these politicians and the economic interests they represent [ie: insurance companies]. This effort is being pursued despite the fact that it is capable of derailing yet again the decade-long effort to add a desperately needed prescription drug benefit to Medicare....

3. [here's something from the Times that may cast light on this -]
   11/10   Issue of competition causes widest split over Medicare - A contentious plan to put Medicare in the marketplace, by Robert Pear, NYT, A14.
   WASHINGTON...- In the current debate over Medicare, no issue excites more passion that a proposal for it to compete directly with private health plans....
   [If private health plans in America are sooo successful, why have we stopped hearing any criticism of the Canadian universal health-insurance plans lately? This is just another attempt by the grasping, meddling neo-cons to fix something that ain't broke. Note they're STILL trying to privatize Social Security using circumlocutions, despite the bursting of the dot-com stock bubble.]
   ...Rep. Pete Stark of Calif., the senior Democrat on the Ways & Means Subcommittee on Health, said the proposal was "a cockamamie scheme" to privatize Medicare, and he asserted that it would not save money....
   [Same old problem - the G.K. Chesterton pan-utopian flaw - "How much can we get away with doing for us rich while spinning that we're doing it for everyone?" The GOP wants everyone but them involved in God-Sent Competition - so they can privatize and concentrate [ie: loot] more of the public infrastructure - not seeing that:
   • the concentration of the national income has already gone far past the point of diminishing returns,
   • competition in many dimensions has already turned into a race to the bottom,
   • and everyone-else-at-the-bottom is going to bring them a lot closer down too.]

4. 11/10   Ireland's pension plan attracts few, by Quentin Fottrell, Dow Jones via WSJ, A6B.
   DUBLIN - With an average age of 35, Ireland has the youngest population in the EU [and unsurprisingly, the worst drivers!]. While France and Germany struggle [to cut pension benefits], Ireland's...latest big idea - Personal Retirement Savings Accounts [PRSAs - how original, coffcoff], which aim to boost private pension coverage to 70% from 50% - isn't proving to be the savings bonanza the government had hoped.... Banks and other pension providers report that the policies have sold poorly. ...While...51,782 employers have distributed information on PRSAs to their staffs, only 6,707 employees had taken out one of the accounts by the end of September....
   [How many times in how many different countries does our "intelligent species" have to relearn the moral of "The Grasshopper and the Ants"?]

• Israel braces for walkout over changes in pensions - On eve of a stoppage, passage from Gaza is eased, by Greg Myre, NYT, A4.
  JERUSALEM...- Israeli motorists lined up at gas stations on Sunday as Israel braced for a nationwide strike on Monday [11/03] to protest the government's planned economic changes. ...Finance Minister Benjamin Netanyahu...has been aggressively pushing...to extract Israel from one of the worst economic downturns in its history.
  [Saudi Arabia, Israel and the USA, three rich countries that are in economic downturns. How stupid and greedy do you have to be to accomplish that?]
  ...Netanyahu ["net: a yahoo"?] has been cutting budgets and benefits and dismissing workers....
  [Again the just-don't-get-it attempt to upsize the economy by downsizing the consumer base.]
  The retirement age is to be raised to 67 for all workers, up from the current 65 for men and 60 for women. The Finance Ministry also plans to take control of pension funds held by the Histadrut..\..Israel's large labor federation, which represents 100,000s of government and private sector workers....
  [Wouldn't the Bush administration love to do that, but privatizing Social Security, ie: handing it over to their cronies on Wall Street, is a big enough goal for now.]
  ...The leader of the labor federation, Amir Peretz...has repeatedly accused Mr. Netanyahu of imposing ever-greater burdens on the poor and working-class Israelis....
  [Tax the poor, subsidize the rich, split the economy, diminish everyone, and call any critic a "class warrior." Sounds like a plan - for unsustainability at the transition from the Economic Age to the Ecological Age, from the Age of Quantity to the Age of Quality, the chief quality being ... sustainability, and the chief variable that maximizes sustainability being ... variability itself.]

• They're not retiring types, by Davis Bushnell, Boston Globe, G1.
  ...Attitudes toward retirement are undergoing a sea change, shaped in part by the economic cycles that mature workers have experienced during their careers, say specialists.
  [How about just the secular economic downswing that they're experiencing?!]
  Some, for example, have found themselves working past age 65 to make up for savings depleted during the recent slowdown. Others - many of them boomers - have opted[?] to take early retirement packages offered by employers seeking to streamline staff during hard times..\..
  "Retirement" has become a dirty word for some members of this group, which includes the oldest of the nation's baby boom generation ["boomers"] born between 1946 and 1964..\..
  [= making a virtue of necessity?]
  A number of older workers are heading into their golden years determined to find meaningful part-time work after leaving the corporate or professional world....
  [You mean like serving lattes at Starbucks instead of burgers at McDonald's?]

1. One side[1] says pension fund[2] is not too ill; Other[3] dubious, NYT, C1.
   [1]US Airways...[2]its pilots' pension plan...[3]the government....

2. Working past retirement ... Way past: An octogenarian scores a 10-year deal, by Jeffrey Zaslow, WSJ, D1.
   ...with a 10-year option..\..legendary former baseball announcer, Ernie Harwell..\..a $1m employment contract [with] Blue Cross Blue Shield of Michigan...to be the public face of its company..\..[a deal] that could keep him on the job until age 105.... If everything works out, the company says, it will sign him for even another 10 years of commercials and public appearances - until he's 115..\.. All of us should have such senior moments.
   And given work-force changes ahead, some of us just might....

• Medicare recipients, pointer blurb (to D2), WSJ, front page.
  ...will pay 13.5% more in premiums for doctor visits in 2004, the program said in a sign of how steeply costs are up.

• U.S. pension agency's deficit widens sharply to $8.8 billion, by John McKinnon, WSJ, A2.
  WASHINGTON - The Pension Benefit Guaranty Corp., the government's tattered safety net for corporate pension plans, said its long-term deficit has swollen to $8.8B from $3.6B last year....
  [This is a 'business' the government should not be in - and it would not have even been in the social security business if FDR had done the smart thing, pushed through the 30-hour workweek in 1933, and made it easier for people to support themselves so taxpayers wouldn't have to.]

1. UAL [United Airlines' parent] will seek IRS permission to postpone pension payments, WSJ, B4.

2. American Exchange's chairman [Salvatore Sodano] on hot seat for retirement pay, by Kopin Tan, Dow Jones via WSJ, C11.
   [First, NYSE's Grasso. Now another exchange, another ripoff 'entitlement.']
   ...Sodano disclosed that his retirement package is valued at $12.4m and that he might be entitled to more, as criticism of his tenure mounted....
   [Weren't "entitlements" supposed to be one of the big targets for conservatives in this country? - or was that just entitlements for the poor, not the rich? Compare also today -]
   Big Board ponders pay disclosures - Trying to break the news of huge pay packages gently, NYT, C3.

1. House backs pension-donation cut - Bill would let businesses contribute $26B less over the next two years, WSJ, A6, //NYT C17.

2. [meanwhile -]
   The NYSE's other millionaires - Top two remaining executives will be due for retirement pay totaling about $30m each [co-CEOs Catherine Kinney and Robert Britz], WSJ, C1.

• Weirton Steel Corp...seeks to cut staff, end pension plan for retirees, WSJ, A18.

• Dilbert, 8-frame cartoon strip by Scott Adams, Boston Globe, comics 1.
  [The first two frames say it all -]
  1. [Catbert, the evil Director of Human Resources:]
     "Your 401k retirement plan will be replaced with a 401A plan."

  2. "The 'A' stands for afterlife."

• Ruling lets Enron workers sue [ex-CEO Kenneth] Lay, others over lost savings, WSJ, front page.
  ...former Enron Corp. Chairman Kenneth Lay and Northern Trust Corp., trustee of Enron's 401k retirement plan...under federal pension law for allegedly failing to protect Enron employees....
  ["Failing to protect" ha! They robbed them blind!]

For earlier retirement stories, click on the desired date -