The joys of retirement

The CEO-worker retirement divide

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Source: Too Much.

The passing scene – August 31, 2015

Here are some links to article I found interesting, and perhaps you will, too.

How Close Was Donald Trump to the Mob? by David Marcus for The Federalist.

Maybe there are innocent explanations tof Donald Trump’s business connections with known Mafia bosses in New York City and Atlantic City.  If such exist, we the voting public deserve to hear them.

Katrina Washed Away New Orleans Black Middle Class by Ben Casselman for FiveThirtyEight.

Black homeowners and business owners lost the most in Hurricane Katrina.  Black professionals such as physicians and lawyers have moved on.  And black school teachers are losing their jobs to supposed school “reform.”

∞∞∞

Hat tip for the following to Bill Harvey—

The Myth of the Middle Class: Have Most Americans Always Been Poor? by Alan Nasser for Counterpunch.

The United States was the first country in which a majority of the people were taught to think of themselves as middle class.  In Victorian English novels, the middle class are the doctors, lawyers and other professionals who aren’t working class, but not truly upper class.

Retirement

Via Candorville.

Lamont and Susan are both right.

Why Social Security should be expanded

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Expand Social Security infographic via Democracy for America.

Click on Even when you do everything right, life happens for a case study by “Digby” on Hullabaloo.

Hat tip to Eschaton.

Reasons to worry about retirement

Double click to enlarge.

Hat tip to The Big Picture.

Living longer and living on less

I’m thankful that I’m the age I am (76).   I have Social Security, a company pension and savings.  But President Obama has made it acceptable to whittle away at Social Security, company pensions are becoming a thing of the past, and saving money is easier said than done.

I was able to save money because I had no medical emergencies, no children to put through college and, most importantly, steady employment all my life.  Very few young Americans will be able to live the kind of life I led.  They live from one short-term job to another, saving money and then spending it throughout their lives.

And even if you have money to save and even if you are reasonably prudent, you can be misled or ripped off.  Most investors take on more risk than they realize.   They don’t realize that their gains in the bull market can be wiped out in the bull market.  They don’t realize how much of their savings are bled away by management fees.

Yves Smith had a good post about this on her naked capitalism web log.   She concluded as follows.

… … The big reason so many Americans are coming up short as far as retirement is concerned is that worker wages have stagnated, thanks to companies no longer sharing the benefits of productivity gains with employees as was once the norm.  We wouldn’t be having a debate about possible future Social Security shortfalls if wage gains hadn’t tailed off as a result of 30 years of policies oriented towards weakening the bargaining power of labor.

But you’ll never hear that from the finger-wagging 1%: if you’d only been more frugal and responsible, you’d have an adequate retirement.  For the lucky few that have no periods of unemployment, no divorce, no medical emergencies, no sick parents who need time and financial support, that might be the case.  But those of us who live in a world whose instability is in no small measure due to rent-seeking by those at the top of the food chain know better.

Click on Even Harsh Frontline Program on Retirement Investments Understates How Bad They Are to read her full post, which comments on a PBS Frontline program called The Retirement Gamble.

What not to do about Social Security

Recently the Institute for Policy Studies ran a comparison of how proposed reductions in Social Security benefits—raising the retirement age, and lowering cost of living adjustments by means of the Chained CPI—would affect a home health aide, 51-year-old Rhonda Straw, and corporate CEOs Stephen Hemsley of UnitedHealth Group, the largest U.S. health insurer, and Larry Merlo of CVS Caremark, the largest U.S. drug retailer.

Click on Inequality in the Social Security Debate for the full IPS article.

Obama sells GOP agenda to Democrats

The battle now going on in Washington over taxes and entitlements is a fixed fight.  Democratic and Republic leaders now agree that crucial safety net programs such as Social Security and Medicare would be cut.  The only question is whether reductions in entitlements will be accompanied by moderate tax increases on the upper-income brackets, as the Democrats propose, or not, as the Republicans insists.

I blame President Barack Obama more than I blame right-wing Republicans such as Rep. Paul Ryan.  It is obvious what Ryan’s objective is—to destroy the social safety net, minimize taxes on rich people and give free rein to corporations.  And his supporters are in full agreement with his objective.

Obama’s actions are the opposite of his rhetoric, and, unlike with Ryan, the opposite of what his core supporters want.   I oppose the whole right-wing corporatist coalition—Ryan, Scott Walker the Koch brothers, the American Legislative Exchange Council and all the rest.  But I feel betrayed by Obama.

When it comes to the Bill of Rights, President Obama lacks the courage to do what’s right in the face of public opinion.  But when it comes to going against the economic interests of his core supporters, he does possess the courage, as well as the political skill, to enact unpopular policies that are deeply wrong.

I forget who said that if Barack Obama is a liberal, he is an idiot, but that if he is a conservative, he is a genius.   I think he’s a genius.  Who else could have created a situation in which Democrats regard attacks on Social Security and Medicare as the moderate liberal position?

Wedge issues and generation gaps

I’m 74 years old.  I’m a member of the most fortunate generation in American history so far.  Like almost everyone in my generation who was willing and able to work, I held reasonably secure jobs at reasonably good wages.  Between my discharge from the Army and my retirement, I had only two employers.  Now I enjoy a secure retirement, based on Social Security, a company pension and my own savings and investments.

Few people under age 55 enjoy are so fortunate.  They have typically experienced layoffs, downsizings, flat wages (in inflation-adjusted terms) and diminishing pension and health benefits.  During the late 1980s and the 1990s, when I reported on business for the Rochester (NY) Democrat and Chronicle, some companies in Rochester negotiated two-tier wage contracts, under which existing wages and benefits would be maintained for the existing union members, but newly hired workers would get less.  The assumption was that people will fight to keep what they have, but accept being denied what they never knew.

Labor unions are based – or should be based – on the principle of equal pay for equal work, and the principle that an injury to one is an injury to all.  Besides being morally wrong, two-tier contracts are short-sighted.  The newly-hired second-class workers will direct their justified resentment not at the company, but at the union leaders and members who sold them out.  If sacrifice is necessary to preserve jobs, it should be shared by everyone, including management.

Now Paul Ryan, Alan Simpson and others propose a two-tier retirement system.  People of my generation would get to keep our Social Security and Medicare at current levels, but the new retirees would have to retire later and receive fewer benefits.  We current retirees would be foolish to fall for this.  The wrath of the generation behind us would fall not on those privatized Social Security and voucherized Medicare, but those of us who still enjoy retirement security.  I don’t believe that the proposed cutbacks are necessary, but, if they are, they should be shared equally by all.

You already see this in the split between union and non-union workers.  Some non-union workers, seeing the better wages and job security that union members get, do not conclude that they should have unions of their own.  Rather they think of the union members are enjoying special privileges that should be taken away.

Exit Helen Thomas

It’s too bad that Helen Thomas didn’t retire years ago from her job as White House correspondent when she could have done so with dignity. Unlike baseball players, journalists tend to stay in the job long after they lose their ability to hit the long ball.  That was true of once-revered figures such as James Reston, and it is true of  David Broder and Larry King today. In contrast, Bill Moyers and, in an earlier era, Walter Cronkite retired when they were at the top of their game.

Helen Thomas is best known for asking questions at Presidential press conferences that other reporters do not dare to ask. But the reason she could get away with asking them is that she functioned as a licensed court jester – someone who could speak insults, nonsense or unwelcome truths because nobody took her seriously. It was an indulgence that was a flip side of prejudice against elderly women. She was a kind of mascot, a sort of elderly child who sometimes said the darndest things.

She deserves credit for being a woman who made her way to the top in journalism at a time when women were relegated to what was then called the “society page.” She must have had a tough time. I respect her for that. But what great news stories did she write? Her biography on her web site mentions her many journalism awards, but it has been a long time since she broke an important news story (*).

I agree that her remark about Jews in Israel going back where they came from was thoughtless and offensive, but I think they are less the words of someone who hates Jews than of someone who has lost the habit of thinking before she speaks.

Coffee, retirement and other privileges

Back in the 1980s, I once talked to a couple of machinists for Eastman Kodak Co. about our respective jobs. They were in their 50s, the same as me. From what they said, and from what I know about skilled trades, their jobs required at least as much knowledge and skill as my job, and their jobs were of more obvious usefulness to society.

The thing that struck them about my job as a newspaper reporter was that I could go to the bathroom, or go to the vending machine for a cup of coffee, without having to ask permission of a supervisor.

I remember what conversation whenever I read about somebody saying that the retirement age needs to be raised to 67 in order to save money on Social Security.  I’d bet that none of the people who say that work under conditions in which they have to ask permission to go to the bathroom or get a cup of coffee.