Monday, October 17, 2011

Storming the Pension Castle?

Nancy Folbre, an economics professor at the University of Massachusetts, Amherst, wrote an excellent op-ed piece in the NYT, Storming the Capitalist Castle:

Wall Street is not literally a castle, and the small green space of Zuccotti Park claimed by Occupy Wall Street may soon be emptied. But an upstart movement has spray-painted a new slogan onto the ramparts of the economic establishment.

"We Are the 99 Percent" effectively publicizes a message consistent with research on the distribution of income and wealth: the top 1 percent of households in the United States represents an economic aristocracy.

Over the last 30 years, it has consolidated and amplified its privileged position, making strategic political investments in policies ranging from financial deregulation to cuts in top marginal tax rates.

It took home 21 percent of the nation's pretax income in 2008, up from 9 percent in 1976. It controlled 36 percent of the nation's private wealth in 2009.

Some economists argue that inequality has no downside -- a view critically dissected by Timothy Noah in a terrific essay, "The United States of Inequality."

As a poster I admired at the park last Wednesday succinctly put it: "We want democracy, not plutocracy."

The protesters don't necessarily demonize the top 1 percent or suggest that taxing them at a higher rate will balance the budget. What brings them together is the conviction that this group exercises disproportionate control over our economic and political life.

Republicans seem to confirm this view when they assert that higher taxes on millionaires would stunt employment growth - as though a small reduction in disposable income would demoralize otherwise mighty job creators.

The very rich are depicted as champions of the people who would graciously repay further tax cuts with economic growth. Yet Republican tax cuts dug much of the budget hole we live in.

A quarter of the millionaires in the United States pay lower tax rates than some middle-class households, vindicating concerns expressed by Warren E. Buffett, the investor king of Omaha now widely considered a traitor to his class.

The posters I saw didn't propose class war, but they did express class rage. "I paid for your bailout" said one, "and I want a refund." "Health care, not wealth care," said another. Several said simply, "I need a job."

The protestors I heard didn't pretend to offer a political program. One held up a sign saying, "We're Here, We're Unclear, Get Used to It." He genially described his participation in a week's worth of workshops and discussions as a "think tank of democracy."

Another, more discursive poster described the ideals of the "solidarity economy," starting with: "I don't have a boss. I'm a worker-owner in a cooperative business," and ending with, "I joined a credit union so my money stays in the community."

What seems to be emerging is what the historian Gar Alperowitz described as a process of "evolutionary reconstruction." It might start by making capitalism more distinct from feudalism.

This idea came to me while reading about a great new product that just hit the market: a $6,400 toilet with its own remote control for water spray and drying fan. Marie Antoinette would have loved it for Versailles.

Whether the ramparts are breached or not, I predict a long and fascinating siege.

As I discussed in my last comment, Occupy Pensions, there is something brewing here and its only going to grow as mass unemployment meets new social media. What happened in Egypt and elsewhere can easily happen here, except they won't be overthrowing some despotic leader, but going after the huge inequality ingrained in our socio-economic system.

And as the masses wake up, they'll start paying closer attention to what is going on with their pensions. There is literally a pension-raiding epidemic worthy of film documentary exposure, and I am calling on Michael Moore, Charles Ferguson and other filmmakers to expose how companies have cheated millions of their workers out of a secure retirement, while enriching executives at the top. The great retirement heist is a subject that is only now garnering attention.

But it goes much deeper than that. There is a complex, symbiotic relationship between public and private pension plans and Wall Street's money masters that needs to be placed into context and examined closely. Most people that manage pensions are honest, hard-working professionals, but there are many unscrupulous sharks in the pension world that abuse their power to profit. These slimy weasels couldn't care less about the workers and pensioners they represent. I leave you with Paul Krugman's thoughts on the Occupy Wall Street movement.

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