My rant on the real problem - read this link first

Here I was thinking that I would like to do some writing and then along comes this article and "Sha-bam" - I have a lot to say. :)

Do you realize the incredible connection between the coming retirement fund crisis in North America and the Occupy movement?

Do you realize that there is a strategy to "change the story" as the public relations professionals would call it?

Many of you have no concern with the quietly on-going, but raging battle between Bay Street, Government and Workers regarding retirement savings and pensions.

You wouldn't be aware that just a couple of years ago a court decision allowed pension plan managers to shift from defined benefit pensions to defined contribution pensions. You probably don't even know what that means...

Heck most of you who read my blog are so young you think retirement thinking is nutty.

But let me speak to your needs?

snicker... snicker... Am I creating power?

In about 20 years, there will be over 6 million new retirees in Canada (20% of our population) who will be living off the public purse in the form of Old Age Security - maybe $600 per month, Canada Pensions Plan - maybe $1000 per month and then whatever savings they have.

There is not enough money in the government's savings account to cover all this cost and the government doesn't want to increase taxes to get the money in the account because to increase taxes would get them ousted from power. Heck, it could cause a revolution.

Anyway, it shouldn't come from taxes. It should come from those who benefited from the work of those retired Canadians. But I am getting ahead of my self...

What it means is that you young people will have increased taxes as well as a legal obligation to support your parents when they don't have enough money to live on each month.

You and I both know that living on $2,000 a month is a bitch. Rent payment, car and insurance payment and then what's left? Enough for the minimum payment on your constantly growing VISA card balance and some Kraft dinner. This of course is the fast track to bankruptcy. You see this coming, but rather than worry that you don't know what to do, you buy a new pair of shoes - go out for a drink - watch a little NFL/NHL/MLB/MMA and do your best to ignore it.

Then along comes the Occupy folks who say that the economic system, as it is being managed by a greedy few and an enabling government, is not working and it is pointed at collapse. The folks in the tents are unclear about how to fix it because the system is so complex.
Our system has so many layers and twists that the average person cannot easily understand exactly how the subprime mortgage crisis raped a trillion dollars from tax payers because Wall Street managers were greedy and stupid ( I emphasize stupid cause that's what they are ) But they were smart enough to have government in their pockets and as such got the money that they lost back by taking it from taxpayers with the false threat that if they didn't get that money everyone would be broke, not just them.

Disassembling our system will be hard and people will scream nasty names like communist and socialist. The name callers are like the idiots who would shout "fire" in a theatre. They want to distract you from the truth.

There is nothing socialist in demanding that those who take risks seeking high rewards bear the burden of the losses from the risks. They sure want you to let them exclusively enjoy the benefits. To share the benefits is communist. Same goes for losses. There has been nothing more communist in our society than making the taxpayers pay for the last round of Wall Street losses.

So in the true capitalist spirit, let those capitalists bear the risks and losses as well.

But my point is that they want you to change the story.

People are not sure where they stand on the Occupy folks.

Long haired, dope smoking, anti establishment, whiney, I don't fit in, cry babies.

On the other hand, gutsy, fair minded, compassionate, human-oriented, future seers who are doing their best to say that we don't have solutions, but you gotta be asleep at the wheel to not know we are pointed at a wall. All of this with a true desire to see everyone happy - not just a few.

But mayors are getting pressure from businesses and banks to get the tents down and the people moving along. Why?

Because the press have now asked them - "What do you want?" And many of us are interested in their answer.

By listening we have found out that some of them are intelligent and articulate and have something very important and meaningful to say.

So quick change the story.


And if at all possible turn these people on each other.

So now we are discussing pension plans and the lack of retirement savings and the crisis that comes upon us starting this year when the first Baby Boomers (8 million Canadians) turn 65.

Now, the question is, How can we blame that on those people themselves?

Well, we could say that people have failed to save enough for their retirement.

Oops - that won't work. They did save enough.

But the bankers were too busy trying to maximize their own accounts and they drove us into the worst recession in history and an enormous 30% loss of all retirement savings accounts being managed by them on behalf of all those people who did save enough money.

In fact, they screwed it up so bad that we just gave the corporations a bank bail out, a car industry bailout, constant subsidies to the oil businesses to create the oil sands project, just to name a few. Then, to top it off, we spent our wad going abroad to seize the oil reserves of other countries on behalf of oil companies. All of this is paid for by - tax payers. Who gets the profits from such mind boggling expenditures?

Business Corporations – because, after all, this sham of a communist state calls it self capitalism.

Wait we are not done - Now that we have spent trillions of tax dollars to help senior managers of corporations get rich, what about the little they might pay back in taxes? Nope. We gave corporations a tax reduction!

Then we do the unthinkable - we let the 38% of Canadians who are covered by a defined benefit pension plan get screwed.

So let's explain that one...

A defined benefit pension is an investment program created through the bargaining between employers and employees. They agree that part of their pay will be by putting a few hundred dollars each paycheck in an account that will be invested for their future. The employer and the employee each put in the same amount of money.

But it is all part of the compensation the employees bargained for. They knew they didn't have the resources or wherewithal to create a plan to ensure they have money for all of their life - including the time they can no longer work. So they planned ahead and got the employer onside.

That was back in the day when employers acknowledged that the workers best interests coincided with their own.

For example I work at the college with a DB Pension plan. Every paycheck they take over $400 out of my pay. They also take $400 of college money and contribute the total to the pension plan. In exchange I have a contract that says when I hit 65 I am entitled to be paid a fixed sum of money every month for the rest of my life. That sum is determined by how many years I worked and contributed to the plan and how much I was getting paid during the last five years I worked.

The plan is managed and when it is done right - as in the case of school teachers and college professors- there is lots of money to cover it and there will be lots of money as long as there is a public school or college system.

This is genius in my opinion. And we did live in the greatest country in the world because almost 40% of our population had access to such a plan.

But then greed kicked in.

Economic times go up and down. So some years the businesses make lots of money and making their pension contributions is easy. Some years they don't and so making those contributions is an expense they want to dodge.

So they go to court and argue that there is lots of money in the plan. Maybe this year we shouldn't have to honor our contractual obligations to our employees. May be we can short change their paychecks for a while. After all it’s for their own good - keep the company alive and all that. So they get "contribution holidays." And since courts and government represent only the corporate class in society they agree to this.

How can I be so bold in my words and so hard on courts and government?

Because fairness means you could reverse the roles in the facts and still come to the same result. Would the courts have allowed the workers to say - Look, the company is making lots of money and right now our children need more of our time so we can raise them right. So let us take 3 hours a week off, get paid the same amount of money, and let the employers take care of them selves for a little while.

Not in this universe.

But it gets better. Since the courts bought the whole contribution holiday thing, corporations went back and said. Guess what? The pension plans have so much money in them and the stock market is doing so well, that when we calculate the projected demands on the pension fund, we have discovered there is a surplus. There is more money there than we will need when the time comes to pay pensions. So rather than be sensible and expect that the markets go down as easy as they go up, or remember that it isn't the corporation's money it is the workers' money and they should decide what to do with it (pay bigger pensions maybe?) The Courts said “Ya sure, you corporations can take some of the money back out again.”

Then it's 1990 the market tanks never to come back, the pension funds are underfunded and everyone who has eyes focused on the future is freaked out. But we still have 20 years to fix this before the all the pensions have to be paid.

We can fix this. So how do we fix it? Do we put the money back in? Do we create more DB plans so everyone can have a safe retirement and keep the economy rolling?

No.

We decide that defined benefit pensions are ill conceived. We should have Defined Contribution pensions. That is, we agree how much money goes in but we make no promise as to how much should come out. And back to the courts we go because we know they are on our side

And the court agrees to let them change half of those defined benefit plans into defined contribution plans. Now workers, some who have worked under a contract for decades that provided them a DB plan have had the DB plan taken and then replaced with an inadequate program because their business partner, a corporation that employed them, didn’t pay their share, mismanaged their share, mismanaged the business, took big bonuses for managers who quite obviously didn’t earn them, took some of the money back to try to fix those mistakes and now can’t keep its original promise ( although that employee honored his or her promise every day for 30 years.)

But we will let them off the hook. After all we are capitalists. I mean communists. No wait which is which again?

But who goes on the hook then? Taxpayers – because the workers aren’t going to die. But they can’t work and they have to be taken care of.

Feeling scared and lost we turn to government. They are there for the people right?

Not so much.

This brings us to this most idiotic article in which a writer suggests that the problem is that government has allowed some people to have a great retirement (DB Pension Plan people) and not helped the others who can’t have a good retirement (people who simply saved for retirement) and so let’s blame the government’s errors and make the poor retirees blame the just-barely-surviving retirees rather than focus the blame where it belongs - on a dysfunctional corporate-run, non-capitalist non-democracy.

I love capitalism and I love democracy. I hate liars and greedy cheats. And I hate stupid people in the press who manipulate the truth so that some big fat hateful mayor (make no mistake this man hates half of the people he claims to serve) can clear a park that mostly street people use.

The obvious answer to the problem this writer says he is concerned with, is to have more DB plans. Not fewer. Or limits on them.

Cause anyone who knows anything about economics knows that the best future we can all have is to have as much disposable income as possible in the hands of consumers so they can spend it and create demand and jobs and surpluses.

Come on, are you daft? Having a retirement fund limit is crazy. Why would you want to create a market where people can’t have a lot of money to spend?

Whether you call it a pension plan, pension savings or a managed estate, it is all wealth and I thought we believed in capitalism because it was supposed to give every one the chance to be wealthy.

But no – let’s suggest that the problem is that some people have it too good. But not the people with all the money – the famous 1% - no, lets focus on the part of the 99% who have more than the others. After all our obligation is be poor like everyone else.

The problem cannot be in the history and corruption in government and corporations since the inception of this brilliant idea of a DB Pension Plan. The problem must be that everyone didn’t roll over and let their retirement savings get stripped away from them by a stupid, greedy, shortsighted and narrow minded elitist corpretocracy.

We all thought the government would take care of us.

Well good morning in the real world.

The Occupy people might not know why they matter. They might not know what they want. But at least they know the system is screwed and something has to be done. Stop kicking at them and start kicking at the system that created this mess over the past 40 years.

Keep the tents. Maybe they will remind us that the system is for the people and by the people and not for an elite who want to use the people.

And maybe the poor retired people can live in them when they are broke.

whooo- that was a long one - what do you think?