On 2009-11-09, Hawke wrote:
Ignoramus12778 wrote:
Pensions were underfunded for decades, due to improper assumptions
about future returns. There was a tacit understanding between unions
and corporations, whereby pensions would go underfunded, and pension
promises were over-promised. The hope was that the management could
avoid war with the union, and the workers would later get paid anyway
due to government pension benefits guarantees. In the mean time,
higher assumptions about future returns greatly boosted the bottom
line of those companies, leading to great management bonuses.

This is well described in a book that I have, _While America Aged_ or
some such. It reads well and is very insightful.

As to whether management should or should not be paid more than the
contribution to workers pensions, this is not an easy question and
deserves more than a stupid knee-jerk reaction.

In the ideal world, I think, corporations would be best without
defined benefit pensions at all and with the workers accumilating
their private savings, in addition to Social Security. The pension
accounting is rife with hard to fix problems.

i


Whether the pension plans are designed well or are fair is one thing.
The larger issue is about how much money some people are getting paid in
the midst of an economic downturn that has millions of people actually
suffering. So millions suffer while thousands still live like kings.

Income disparity is nothing new and is not unfair as such.

Back in the days when real kings did the same thing the masses were not
happy about it. The disparity of a country's wealth in the days of
monarchy led directly to the end of that system.

This is completely false, as almost all revolutions that ended
monarchies, did not end up with any large income redistributions.

Today we are seeing economic monarchism. More people than ever are
seeing the obscene levels of pay for the privileged few as morally
and inherently wrong. Maybe now something will finally be done to
change a system that unfairly enriches a lucky few while the
majority lives on "cake". The people did something about the
unfairness of monarchies; they abolished them. Let's see if they are
willing to do the same thing today.

The estate tax serves this purpose and, in the long run, ends those
economic dynasties. I believe it to be one of the great tools that
maintain some semblance of equality in the society.

I hope that estate tax is reinstated, and I also hope to die rich
enough to be affected by estate tax.

i