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Monday, March 7, 2011

Stewart, Pensions, Bonuses and Bailouts

John Stewart had a piece last Thursday night on certain contrasts in people's attitudes in different circumstances.

He had a bunch of people on who felt that since some pension funds were underfunded the pension contracts that had been made will just have to be modified (= reduced). He then went to some other people who had argued (a while back) that the bonuses that had been promised to the bankers who had received bailout money were CONTRACTS and could not be abrogated.

It was persuasive, but omitted a couple of points. One was that the bonuses were a "bad taste in the mouth", but the unfunded pensions were a fundamental cause of the problem. On the other hand the bonuses were going to the people who had contributed to, if not caused, the problem. It was the government representatives (politicians) who made the promises to the pensioners, and not the pensioners themselver, who were at fault in the other case. No I don't think that it is important that the workers pushed for benefits. That is what they should do. The folks who were irresponsible were the ones who agreed to deliver that which they could not deliver.

It is very much like that old saying about selling short in the market:
He who sells what isn't his'on. Must buy it back or go to prison.
But none of those government officials will be going to prison.

Lastly, I have not seen Stewart depart from the media's main way of handling the bailouts. They do not distinguish between the government's giving, loaning, or buying: just call'em all "bailouts". They also seem reluctant to point out that alnmost all of that money has been returned.

1 comment:

  1. I agree with everything Wayne said above with one additional nuance concerning the concept that pushing for benefit is something workers should do. If an enterprise is successful (government or private) then I would agree with the logic that all workers have been part of the success and should share in the benefits of success. Unfortunately, the same logic would apply if an enterprise is unsuccessful. All must share responsibility for failure.

    How this applies to this discussion is that workers should push for benefits, but not to the point of being counterproductive to the success/viability of the enterprise. If they do that then they are part of the problem.

    I once heard a Union official state that it is the Union’s responsibility to ask for everything possible and if management accepts an unreasonable demand it is a management failure. In my opinion a preposterous position to take, still I have to agree that his statement is correct, but with the caveat that it is also a Union failure.