This is a BusinessWeek article by Laura Tyson published the day before Election Day.  I think it's a good summary of the class warfare waged by the Bush Administration.
While Tyson was an advisor to the Kerry campaign and did work in the Clinton Administration, she is also Dean of London Business School.  And remember, BusinessWeek is no leftie rag.

http://www.businessweek.com/magazine/content/04_44/b3906038_mz007.htm

A recent study by the bipartisan Congressional Budget Office confirms that the 2001 and 2003 Bush tax cuts have disproportionately benefited the wealthiest households. The tax cuts have boosted the aftertax incomes of the top 1% of households, with average incomes in excess of $1,000,000, by 10% -- compared with a 2.3% increase for middle-income families with average incomes of $57,000 and a 1.6% increase for the bottom 20% of families, with average incomes of less than $17,000. The tax cuts for millionaires alone have reduced government revenues by $90 billion a year, more than the lost revenues from tax cuts for the 80% of families making less than $100,000. Ninety billion dollars a year is more than enough to pay for the comprehensive health-care plan proposed by John Kerry and for the promises President Bush himself made but has not funded in his No Child Left Behind education bill.

And this comes as a surprise?  In addition, the new rules on overtime will deprive millions of workers of those few extra bucks that pay the water bill or buy the kid a little toy.  Further, federal judges are allowing companies to void union contracts and skip out on promised pension benefits.  I posted this once before, but it bears repeating.

to the tune of the Doxology.  "Wobblies loved to steal the hymn tunes because they were pretty, and change the words so they made more sense."
--- U Utah Phillips

"Praise boss when morning workbells chime
Praise hium for bits of (vanishing) overtime
Praise him who's wars we love  to fight
Praise him fat leach and parisite

Amen"

This is a BusinessWeek article by Laura Tyson published the day before Election Day.  I think it's a good summary of the class warfare waged by the Bush Administration.
While Tyson was an advisor to the Kerry campaign and did work in the Clinton Administration, she is also Dean of London Business School.  And remember, BusinessWeek is no leftie rag.

http://www.businessweek.com/magazine/content/04_44/b3906038_mz007.htm





bushie is reviewing the scheduled deficit budget.  He believes that more of the money earmarked for domestic
programs should be diverted to Iraq.  Our tax dollars at work. 

Further, federal judges are allowing companies to void union contracts and skip out on promised pension benefits.  I posted this once before, but it bears repeating.


Tread lightly on the facts there, Don Carlos.  I happen to be a former employee of one of those companies that went bankrupt and the Bankruptcy court "allowed" the company to abrogate pension benefits.

My experience is in the steel industry, and I have extensive airline industry experience as well.

The steel companies had been losing money for YEARS.  They were BROKE.  There was NO MONEY to pay the benefits.  In the case of Bethlehem Steel they had 90,000 retirees and 12,000 active employees.  The Bankruptcy Judge decided nothing.  There was no money.  No money, no benefits.

My company, National Steel, was in the same situation.  We lost money for years.  No dividends to stock holders.  Bond holders got stiffed.  Pension health benefits stopped because there was NO MONEY LEFT after years of losses.

Ditto for LTV Steel.  In the end, the "high bidder" for LTV put up $80 million for the whole place.  Nobody else wanted to even touch the thing.

Ditto for Weirton Steel, who valiantly did everything they could to keep the business running.  In the end there was NO MONEY LEFT to pay retiree benefits.

All of these steel companies (and more) simply ran out of money.  And there were no "distributions of cash" to shareholsers, etc... that precipitated the cash burn.  These companies lost their money the old fashioned way, selling products at a loss.  But the markets would not support higher prices so these companies died.

Let's look at US Airways.  They have lost money for years.  The only money they have is what was borrowed from the US Government (they already burnt through all investor cash long ago).  The Bankruptcy judge will decide nothing in the end.  When ther money runs out, it runs out.  Same situation will occur for United Airlines who continues to burn through money at an unbelieveable rate.  Now, in the case of USAir, the company did some really unconsionable "protected" pension deals for management, which I fully object to.  But in the case of the steel companies and the vast, VAST majority of other companies that go bankrupt, it is simply a case of the money ran out.

Where, exactly, do you expect the Bankruptcy Judge to come up with the money to "allow" the companies to continue to pay retiree benefits when there is NO MONEY LEFT?

Note that in every example I have cited, the companies in question had long-term money losing operations and quite simply ran out of cash (thus filed for bankruptcy).

I of all people do not like what happened.  I am one of the guys who lost his retiree health benefit coverage.  But I have also been through the books of these companies and I know that the Bankruptcy Courts were powerless.  Companies that lose money and run out of cash can;t pay benefits.  Pure and simple.

And these massive American steel companies are going broke because....?
??? ??? ???

The latest outrage I've heard is that the Bushies will do away with the tax exemptions for employer based health insurance.  It's as if the Bush Administration wants to see more Americans desperate without health insurance. 

This "Ownership Society" is a total crock.  Everything these evil sons of b*tches do is designed to shift the tax burden from the capitalist class to the working class.  "Ownership Society" means the banks own your sorry @ss! 

If they try to impose their private health savings accounts, the number of uninsured will double.  However, the Bushies don't care.  They have all the concern for the people as a Latin American fascist junta.  In fact, the capitalist overclass is in the middle of doing to Americans what they've already done to Central America. 

May they lose power the way fascist juntas tend to lose power!

And these massive American steel companies are going broke because....?
??? ??? ???

The latest outrage I've heard is that the Bushies will do away with the tax exemptions for employer based health insurance.  It's as if the Bush Administration wants to see more Americans desperate without health insurance. 

This "Ownership Society" is a total crock.  Everything these evil sons of b*tches do is designed to shift the tax burden from the capitalist class to the working class.  "Ownership Society" means the banks own your sorry @ss! 

If they try to impose their private health savings accounts, the number of uninsured will double.  However, the Bushies don't care.  They have all the concern for the people as a Latin American fascist junta.  In fact, the capitalist overclass is in the middle of doing to Americans what they've already done to Central America. 

May they lose power the way fascist juntas tend to lose power!


Maxwell,

The steel companies went broke much the same way that farmers go broke.  Simply put, there was too much capacity in the marketplace and the costs of owning a steel mill (whether it is running or not) are extremely high.  When you are a farmer and there is an excess of your crop, you simply lower your price because you'll lose less money than not selling crops at all.  And you won;t stop until you run out of money (ie go bankrupt).

Back in 1979 when I entered the steel business my company had about 30,000 employees.  When I left last year, we had 8000 workers making MORE steel than those 30000 were.  But we 8000 were shouldering the load of retiree benefits for those 30000.  Along with general overcapacity in the marketplace and pricing drops it broke the company's back.  Note that 4 out of the top 6 steel companies filed Chapter 11.  As I mentioned, Beth Steel and LTV Steel had something like 12000 workers shouldering the load for 100000 retirees.  Eventually the companies collapsed under the weight of all that cost.

Also note that, with the exception of the 1989-1990 time period, steel prices in the United States were the highest in the world.  So for all the talk of steel "dumping", the American market enjoyed the HIGHEST steel prices in the world.

Also note that George W. Bush put into place the Section 201 quotas and tarrifs on steel.  Mind you, I think that it was wrong and counterproductive to do that, but during 8 years of the Clinton Administration, Clinton did SQUAT to help the steel industry.

By the way Maxwell... I agree with your assessment of the health insurance issue.  If a company wishes to give out health insurance benefits, so be it.  It is an expense to the company.  To "tax" that money would be silly.

Tread lightly on the facts there, Don Carlos.  I happen to be a former employee of one of those companies that went bankrupt and the Bankruptcy court "allowed" the company to abrogate pension benefits.



Pensions are suppose to be funded as the obligation is incurred, not paid out of future profits.  The $$$ for my pension is already there, paid by my employer to TIAA-CREF, just as we both contribute to Social Security.  I know nothing about how steel companies managed their pension plans, but I do know that IBM and many other firms make regular contributions to "lock box" accounts for their workers.  The funds in those accounts no longer belong to the employer but to thge employee.  There is also a federal insurance program designed to cover defined benefits shortfalls, which this admin has allowed to become under funded.  It has also allowed companies to under fund their pension plans.  I will conceed that health insurance and similar benefits are a different story.

I know nothing about how steel companies managed their pension plans, but I do know that IBM and many other firms make regular contributions to "lock box" accounts for their workers.  The funds in those accounts no longer belong to the employer but to thge employee.


Remember that a lot of people are enrolled under older pension plans.  ANd for various reasons, they often either refust to upgrade the plan, or unable to upgrade their plans.

One great story I remember from the early 1990's was a gal that retired from the C&H Sugar Company.

After working for over 50 years, she finally decided to retire.  Many times over the years, she was offered chances to either upgrade her pension plan to a newer one, or to convert it to a 401k or some other plan.  But each time, she refused, saying that the one she started with was good enough.  5 years before she retired, the Site Manager begged her to upgrade her plan.  But again, she refused.

When she retired (I think it was in 91 or 92), she recieved her original pension plan.  $25 a week for the rest of her life.

But C&H stepped in and upgraded it on their own, so she actually got a liveable amount.

Remember, a lot of the old style pension plans were sponsored entirely by the company, and were little better then Social Security.  And the entire plan was based on the health of the company that you worked for.  Now in the 1950's (or even the 1960's-70's), who could picture a company like US Steel going bankrupt?  It was about as unthinkable as say Ford going under, or Coca-Cola, or K-Mart.

Thankfully, most people now invest in a 401k or some other retirement program, which does not invest all of the money in a single company.  Although that does not prevent some companies (ie Enron) from manipulating how it is administered.

"Ownership Society" is a total crock. 

See this is exactly why George Bush's ownership society bothers democrats and leftists so much.  The more you own, the more self-reliant you are.  The more self-reliant you are, the less you need government.  Because in an ownership society you don't need government.  And the less you need government, the less you need democrats!

And the less you need government, the less you need democrats!


I personally do not have a problem with the Democratic party.  My only problem is with the Socialist arm of the party.

Some socialism is good.  It gives a safety net for when it is needed.  To much though, and it stifles incentive.  And because it tries to "share the wealth", it often only shares the misery.

I am sure FDR would be appaled to see what happened to his ideas.  I am sure he did not intend to create such a mess when he started.

See this is exactly why George Bush's ownership society bothers democrats and leftists so much.  The more you own, the more self-reliant you are.  The more self-reliant you are, the less you need government.  Because in an ownership society you don't need government.  And the less you need government, the less you need democrats!

Go tell it to Mr. Limbaugh.  That's not the point, mon frere.  I invite you to read David Cay Johnston's book Perfectly Legal  The subtitle of the book is "The Covert Campaign to Rig Our Tax System to Benefit the Super Rich - and Cheat Everybody Else."  Every American needs to read this book...unless you are a rich horse's @ss like Dennis Miller, who is currently gracing my TV screen.  Johnston spells out in plain language why this "Ownership Society" is worse than a crock, it's a malicious lie.  Mind you, the book was written before this "Ownership Society" flapdoodle was concocted, but the same principles apply.

The book is out in paperback now, so you don't have to shell out the bucks for hardcover.  Get it.  Read it.  I'm not just making banter.

Pensions are suppose to be funded as the obligation is incurred, not paid out of future profits.  The $$$ for my pension is already there, paid by my employer to TIAA-CREF, just as we both contribute to Social Security.  I know nothing about how steel companies managed their pension plans, but I do know that IBM and many other firms make regular contributions to "lock box" accounts for their workers.  The funds in those accounts no longer belong to the employer but to thge employee.  There is also a federal insurance program designed to cover defined benefits shortfalls, which this admin has allowed to become under funded.  It has also allowed companies to under fund their pension plans.  I will conceed that health insurance and similar benefits are a different story.


Doncarlos,

I think we have some points of agreement here.

I too prefer the "lock box" style pension (defined contribution).  But there is a big problem with the "defined benefit" type of pension plan.  That problem is simply stated "How much money do you put into it?".

The pension plans of most of the old-line companies are/were defined-benefit.  So you assume a certain rate of return on the investments (a diversified mix of stocks).  This return was usually estimated at 8% which USUALLY was conservatively low.

But then in 2000, the stock market crashed and pension portfolio valuations were severely hurt.  Also, the target rate of return (pegged to govt securities) plummeted to 3% or so.  Both of these actions conspired to cause many previously-fully-funded plans (like mine) to become underfunded overnight.

Example:  a plan that had $1billion in assets earning 8% return could pay out $80 million in benefits a year.  But when the market crashed, say, 30% the assets were now worth $700 million.  And with rate of return dropping to 3%, it could only support $21 million of benefits.  Instant problem.

Now, I very much agree that pension funding law must change.  Some of those companies UNDERFUNDED their pension plans and instead did some unwise aquisitions that sank their companies.  That said, the steel companies and the airlines were losing money regardless, and the pension plans would have failed anyway.  But AT LEAST they would have had a little more money in the pension plans than they did.

By the way... Social Security is also an STATISTICALLY UNDERFUNDED defined-benefit plan and it is not a "lock box" program.  Latest projections are that by 2020 (I think, don't quote me on the year), the fund goes red.  So either benefits have to be cut or more money has to go in via taxes.  Interestingly, Bush's "private SSI account" approach is specifically a LOCK BOX proposal, and he is being vilified for even suggesting a lockbox approach where you get to control your own money.

As for the Federal pension agency, the PBGC, it went underfunded because of the general problem in industry with pension under funding (caused by stock market losses, rate of return drops, and good old underfunding).  Federal Pension Reform must be passed to clean up this problem.  Quite frankly, the law must be rewritten to enable the PBGC to terminate and take over a pension plan SOONER when it becomes apparent that a member company is severely underfunding a plan.  Today they usually wait for an imminent bankruptcy to take over a plan, and that is way too late in the game.  The underfunding of the PBGC (which is funded my pension plan insurance premiums levied on the member plans) has been brewing for the last 20 years.  Not just a "Bush" or "Clinton" phenom.

By the way... Social Security is also an STATISTICALLY UNDERFUNDED defined-benefit plan and it is not a "lock box" program.  Latest projections are that by 2020 (I think, don't quote me on the year), the fund goes red.  So either benefits have to be cut or more money has to go in via taxes.  Interestingly, Bush's "private SSI account" approach is specifically a LOCK BOX proposal, and he is being vilified for even

I suspect the entire thing is a fraud.  The Republicans have for the past 25 years for the redistribution of wealth upwards from working classes to the rich.  The so-called "private accounts" will only serve to make us more subservient to the stock market and enrich Wall Street brokers.  No thanks.

I suspect the entire thing is a fraud.  The Republicans have for the past 25 years for the redistribution of wealth upwards from working classes to the rich.  The so-called "private accounts" will only serve to make us more subservient to the stock market and enrich Wall Street brokers.  No thanks.


So you would rather that your SS Account be managed by the government than have the choice of an interest-bearing account (would not need to be stocks or mutual fund) of your choice, with your name on it?

You are a generous man, Maxwell.  I am sure that the government would be more than happy to manage the rest of your money for you too.

So you would rather that your SS Account be managed by the government than have the choice of an interest-bearing account (would not need to be stocks or mutual fund) of your choice, with your name on it?

You are a generous man, Maxwell.  I am sure that the government would be more than happy to manage the rest of your money for you too.


According to a recent report by Austin Goolsbee of the University of Chicago Graduate School of Business:

"Creating individual accounts in the social security system would lead to a massive increase in payments of financial fees to private financial management companies ... the net present value of such payments would be $940 billion.

Rather than using the money to close the social security gap, the plan would transfer this money to private financial managers and mutual fund companies.

The fees would be the largest windfall gain in American financial history.

For a worker at the average income level, the fees in privately managed accounts are likely to reduce the ultimate retirement value of their individual accounts by 20 percent for the intermediate case."

Remember, since the "Ownership Society" is based on tax breaks and savings plans, by its nature it cannot do much of anything for those in lower income brackets who cannot accumulate savings and don't pay taxes outside of payroll taxes.
The Bush propaganda makes a sketchy case for individual "locked box" health savings accounts, but the enormous costs of healthcare should you suffer trauma or long term illness are far greater than the amounts lower income people (and even relatively high income people) could accumulate in those accounts.
The same is true for individual retirement accounts.
Social Security is not a savings plan, it is social insurance.  Insurance only works as a collectively pooled benefits program. 
Yes, we need a social overhaul in this country, but Bush's "Ownership Society" is just another right-wing reverse Robin Hood scam.  The goal of the Bushies is to roll the social contract back to 1901.  All those who suffer privations now will suffer them far worse if Bush gets his way, and far more people will slip from secure to marginal.
Meanwhile, all the tax breaks of the "Ownership Society" will give the "haves" even more ways to stash more money away from the collective good, further exacerbating the problem.

According to a recent report by Austin Goolsbee of the University of Chicago Graduate School of Business:

"Creating individual accounts in the social security system would lead to a massive increase in payments of financial fees to private financial management companies ... the net present value of such payments would be $940 billion.
.....

For a worker at the average income level, the fees in privately managed accounts are likely to reduce the ultimate retirement value of their individual accounts by 20 percent for the intermediate case."



Well, since I am a graduate of the University of Chicago, I feel quite confident to say that Gooldbee is a quack on this issue.

Currently SS funds are invested in government securities, which are amongst the lowest-yielding investments that one can make in the market today.

If a personal SS account were invested in a mutual fund, these funds usually take a 1% to 3% annual fee (3% is extremely high), but over the long haul generate a rate of return about 5% higher than what you get with govt securities.

Or... you can invest the funds in a personal "savings account" and enjoy the same returns that are had with government securities, and NO MANAGEMENT FEE.  Like buying a CD in your IRA Account.

People who hold on to YOUR money will do anything to keep holding on to it. 

The way to fix Soc Sec is to elilminate the cap on the tax.  Since both wage earners and employers pay that tax it might encourage firms to reduce the salaries of those useless CEO's.  The idea of private accounts is just too risky.  Think of Archy Bunker making wise investments.

The way to fix Soc Sec is to elilminate the cap on the tax.  Since both wage earners and employers pay that tax it might encourage firms to reduce the salaries of those useless CEO's.  The idea of private accounts is just too risky.  Think of Archy Bunker making wise investments.


Why not allow individuals to keep their Social Security accounts in simple interest-bearing instruments as a first start?  This would eliminate the perceived fear that people can not be trusted to manage their own money, only the government.

Also, if the tax cap is removed, will you also remove the benefit cap?  Because if you don't, then just eliminate the SS tax altogether, increase the income tax, and fund the whole mess out of the general fund and call it welfare.

It's like I say, I have a fundamental distrust of the Republican party when it comes to taxation and fiscal reform.  Since the start of the Reagan administration in 1981, all Republican-driven policies have served the rich at the expense of the poor.  You expect me to start trusting George W. Bush in 2004?
::) ::) ::)

Anyway, I don't have the time or the energy to pursue the argument over the specs of the "Ownership Society" at the moment.

It is a shame under our current Social Security system that a 64-year-old man who dies loses all that money over his lifetime he was forced at gunpoint to give to the federal government.

It is a shame under our current Social Security system that a 64-year-old man who dies loses all that money over his lifetime he was forced at gunpoint to give to the federal government.


It is good that men AND women are able to count on so some money and benefits coming in, however
small the amount.  That 64 year old man may have a 64 year old wife who many have been a
stay at home mom who is grateful for anything she can get.

It is a shame under our current Social Security system that a 64-year-old man who dies loses all that money over his lifetime he was forced at gunpoint to give to the federal government.

Again, Social Security is not individual savings, it is collective insurance.  The goal of the conservative movement is to tear down all collective obligations, except your obligation to pay taxes to bolster the Pentagon and corporate welfare.