Friday, April 12, 2013

Luxury Pensions to Marx's Revenge?

Frank Dohmen and Dietmar Hawranek of Der Spiegel report, Luxury Pensioners: German Execs Scrutinized over Fat Retirement Plans (h/t, Suzanne Bishopric):
Despite public outcry, German executive pay continues to grow. While most people in the country are gradually becoming concerned about whether their retirement pensions will be adequate, many top executives can look forward to worry-free golden years.

There are no longer many certainties in the lives of Edwin Eichler, Olaf Berlien and Jürgen Claasen. At the moment, the three former executive board members of steelmaker ThyssenKrupp don't know what the future holds for them. Will they be able to find new jobs, or are they simply no longer capable of being placed?

They were let go at the end of last year after ThyssenKrupp posted a loss of €5 billion ($6.5 billion). There had been some failed business deals in North and South America, and the supervisory board wanted to send a message. Now the three managers are tainted with the reputation of being the personification of failure.

But there is one thing the three men can depend upon: a generous pension that should enable them to lead a carefree life. Eichler and Berlien will each receive €402,000 a year. Claasen, who had a shorter tenure on the executive board, will receive half that amount.

Tidy Rate of Return

The terms under which the men will receive their benefits are also favorable. Instead of having to wait until their 67th birthdays, like normal employees, they will begin collecting benefits at age 60. The managers won't even have to worry about external hardships, like rising inflation. At ThyssenKrupp, executive pensions are "adjusted annually according to the Consumer Price Index."

In other words, a tidy rate of return is guaranteed. And the executives' families will also be taken care of.

Should one of the former directors die, the steelmaker will continue to pay his wife 60 percent of his pension. In the case of Eichler and Berlien, their spouses would receive €241,000 a year. Each child entitled to support would qualify for another 20 percent the original pension, or €80,400. And although ThyssenKrupp would only provide benefits to the children of its former executives "until the age of 25," there are "certain well-founded cases" in which benefits would still be paid "until age 27."

ThyssenKrupp, like all corporations listed on Germany's DAX stock index of blue chip companies, spends a lot of money on the retirement pensions of its top executives. The total pension commitments are valued at €6.2 million for Berlien, €7.8 million for Eichler and €2.5 million for Claassen.

German carmakers are even more generous. The current record holder is Daimler CEO Dieter Zetsche. His pension commitments are currently worth €39.6 million. VW CEO Martin Winterkorn can expect to see benefits worth a total of €23 million, and even VW human resources chief Horst Neumann will receive about €18 million.

Industrial gas producer Linde and electric utility E.on have to set aside €16 million each for their respective CEOs, Wolfgang Reitzler and Johannes Teyssen, while VW is saving €14.8 million for its chief financial officer, Hans Dieter Pötsch. The list of benevolent deeds for top executives could go on and on.

Self-Service Mentality

The numbers reveal a self-service mentality among corporate leadership that stands in sharp contrast to the financial sacrifices executives often demand of their employees.

When it comes to compensation, corporate executives in Germany have now stepped beyond the level at which society still tolerates social injustice. Triggered by the €20 million that VW CEO Winterkorn would have been paid in 2012 if his contract had not been amended, a national debate began over equality and fairness. Even Chancellor Angela Merkel weighed in, saying: "Exorbitance is unacceptable in a free and social society."

Winterkorn decided to forego some of the money to which he was contractually entitled, which was probably not a very painful sacrifice for him. Including a second salary as head of Porsche Automobil Holding SE, Winterkorn received €15.3 million.

Anshu Jain, the co-CEO of Deutsche Bank, also wanted to send a small message. He declined a bonus in the millions, because if he had accepted it he would have earned more money than his fellow board member and chief executive Jürgen Fitschen, which wouldn't have gone over well at the bank.

Winterkorn and Jain apparently sense that there are limits to income growth. Besides, the German government reacted more quickly than many had expected.

Shareholders To Set Salaries

Under a new law the government intends to pass after the federal election in September, shareholders will determine the amount of executive compensation in the future. This is currently done by supervisory boards, in which representatives of labor and capital work out the details behind closed doors.

But as well intentioned as the new legislation is, it is unlikely to change much. Shareholders are interested in high profits and rising stock prices. To them, whether a chief executive who promises and guarantees these results earns €5 million or €15 million is somewhat irrelevant.

Still, the government's quick reaction shows how seriously it takes the problem. It doesn't want to hand over the subject of social justice to the opposition Social Democrats and the Left Party. "I understand perfectly well how people can only shake their heads at some salaries that are completely out of line," says Chancellor Merkel.

Pensions Easy to Hide in Disclosures

It is precisely because of the fact that the salary debate in Germany has become so heated that pension commitments for executives hold a special appeal. There's a reason for this, too: They are easy to hide in financial reports.

After SPIEGEL reported the pension claims of several corporate leaders last year, a few supervisory boards confessed that it wasn't an issue they had focused on until then. The supervisory boards at Daimler and VW indicated that pension commitments would no longer be as generous, at least for new contracts given to senior management. But in reality, the value of pension commitments has increased substantially once again.

ThyssenKrupp has to place €32 million in reserve for the pensions of its directors, while Siemens keeps €52 million in executive pension reserves, Daimler €82 million and the Volkswagen Group €104 million. Each of these amounts is about 20 percent higher than in the previous year. The value of the pension claims of Daimler CEO Zetsche, for example, increased from €29 million to €39 million in one year.

There is an actuarial explanation for this miraculous increase, but it only reveals a further problem with the retirement pensions of senior management.

Daimler, for example, guarantees Zetsche an annual pension of €1,050,000. The automaker has to form a reserve for the anticipated payments. The amount of this reserve depends on how much interest the money earns until the company has to pay pension benefits. Because interest rates for safe investments have declined, the Stuttgart-based company has to place a larger sum in reserve to be able to pay its CEO the guaranteed pension later on.

Unfair Advantage

Zetsche can look forward to something of a guaranteed pension. He and other executives know how much money they will receive in retirement, no matter what happens in between, since their employers assume the risk of falling interest rates.

Of course, ordinary employees who make private arrangements for retirement and buy life insurance policies don't have this guarantee. If interest rates in capital markets decline, the amount that will be paid out to them in old age is reduced. In light of the debt problems in the euro zone, more and more Germans are worried about slowly being deprived of some of their retirement income in this manner.

It is already impossible to justify the difference between senior executive and ordinary employee compensation. A number of DAX companies have now reacted to this imbalance. At ThyssenKrupp, Daimler, Linde and RWE, for example, managers who are newly appointed to the executive board receive a so-called contribution-oriented pension.

In addition to salaries, bonuses and profit sharing, the companies pay several hundred thousands of euros into an account for the pensions of top management. Over the years, this adds up to a handsome company pension for the executives. But the companies know how much money they are actually spending for their managers' retirement benefits. And if interest rates fall, they no longer have to constantly increase the amounts paid into the fund.

Should Executives Even Get Pensions?

This is a small improvement, and yet it doesn't address the underlying issue: Why do companies pay their senior executives a pension at all? After all, they are also expected to accept a certain amount of risk.

Employees are advised to save money in a private pension account, because the pension required by law is unlikely to allow them to maintain their standard of living. Factory workers and office employees are expected to set aside a portion of their earnings. But the top executives, who earn salaries in the millions and for whom saving money shouldn't be a problem, have no need to save, because their employer pays their luxury pension. When it comes to their own retirement pensions, top managers show a pronounced tendency to hedge their bets.

The amounts in question can no longer be justified. Pension commitments in the double-digit millions "are hard to defend from an ethical standpoint," says Christian Strenger, "even if there are contractual claims."

The former head of the DWS investment fund is a member of the German government's Corporate Governance Commission, which develops proposals for good corporate governance. Strenger is critical of the fact that "supervisory boards are unable to put a stop to such excesses."

"Salaries cannot be unlimited in a social market economy" like the one in Germany, says Berthold Huber, the head of the IG Metal metalworkers' union, referring to the country's model of capitalism, which encourages free markets but also includes support for organized labor and a comprehensive social system. Nevertheless, he and his fellow labor leaders, in their capacity as supervisory board members, have not stood in the way of corporate executives receiving generous pensions in addition to their salaries. Sometimes this acts as a hidden salary increase.

A Discrete Way of Padding Salaries

"Pension commitments are a very popular way to make sure managers get more money without attracting notice," says Peter Dehnen. As a member of the steering committee of the Association of Supervisory Boards in Germany, he has seen how companies have increased pensions for top management at times when management salary increases seemed unjustified, because the companies were imposing wage freezes on ordinary employees.

Pension commitments have developed into "an unregulated area in which some executives have essentially secured a second salary for themselves," says Ulrich Hocker of the German Protective Society for Security Holdings. Because all companies establish their own rules, with some granting executives pensions at 60 while others wait until the managers turn 63, it is already difficult to compare payments among different companies.

In general, Hocker thinks it would be a good idea "if managers paid for their own retirement pensions and perhaps received a higher salary in return." Executives could still hardly expect to face poverty in old age, but the process would be "fair and, for outsiders, comparable and transparent."

Many details are currently tucked away in the legal language on the back pages of company reports. E.on, for example, invented the term "third pension situation" for longstanding executives. The first situation occurs when a manager leaves the company at 60, and the second situation applies if he becomes disabled. So far, so good. But if the company decides not to renew the executive's contract, perhaps because of poor performance, E.on does not refer to this as firing the executive, but rather as a "third pension situation."

In that case, the manager receives an "early pension" of between 50 and 75 percent of his last base salary. In the case of current E.on CEO Johannes Teyssen, this would be €930,000 -- a year.

Who wouldn't want to be fired and start collecting a pension of €930,000 a year for the rest of their life? These luxury pensions are a travesty and just another underhanded way to inflate executive compensation.

Magazines like Forbes will rank America's highest paid CEOs, all part of the American plutocracy, but they won't scrutinize the total compensation which includes luxury pensions. And yet the American Accounting Association did a study a few years back and warned CEO retirement is big loser for shareholders, especially when chief's pension is based on company's late-stage performance.

In the article above, Hocker is right, it would be a good idea "if managers paid for their own retirement pensions and perhaps received a higher salary in return." Executives could still hardly expect to face poverty in old age, but the process would be "fair and, for outsiders, comparable and transparent."

And what about the rise of plutocracy and its effects on democracy? Margaret Wente of the Globe and Mail recently reported, Plutocrats – the credibility of capitalism itself is at stake:
If you want to understand the forces that are shaping democratic capitalism, I have a terrific book for you. It’s Chrystia Freeland’s Plutocrats, the winner of this year’s Lionel Gelber Prize for the best English-language book on international affairs. (I was the least illustrious member of the stellar jury, and I got to read a lot of wonderful books.)

Plutocrats is an intimate portrait of the world’s new super-elites, some of whom Ms. Freeland has gotten to know well. None of them are cartoon villains. They are a genuine meritocracy – men (and they’re all men) who worked their way up to dominate the tech world or finance. They honestly believe that what’s good for them is good for the rest of us, and they’re hurt and baffled that not everyone agrees.

One of the good guys in this book is Mark Carney, the Bank of Canada Governor who’s heading to the Bank of England. In 2011, he had a showdown with Jamie Dimon, the head of JPMorgan Chase (by some measures, the world’s largest bank). At a meeting of leading bankers in Washington, Mr. Carney explained why he supported a new set of international financial rules that would constrain the banks and cost them money. Mr. Dimon’s response was a rant; he called the rules “cockamamie nonsense” and “anti-American.”

Mr. Dimon, a self-made man who ascended to the pinnacle of Wall Street by way of Harvard Business School, sincerely believes that regulatory overreach is stifling the financial system. Mr. Carney believes that plutocrats need to be reined in when their interests collide with ours. They’re on different sides of a titanic struggle for power. The battle is a test of our ability to defend democracy from the plutocrats when the markets don’t work the way they’re supposed to.

As Ms. Freeland writes, the super-elites are often the product of a strong market economy. But as their influence grows, they can become its opponents. They claim they’re pro-market, but what they really are is pro-business. Ms. Freeland cites University of Chicago professor Luigi Zingales as saying they use their lobbying power to tilt the playing field, not to level it. “As a result, serious tensions emerge between a pro-market agenda and a pro-business one.”

You’d think the crash of 2008 would have taught Wall Street some humility. Instead, those tensions are as bad as ever. Last year, Mr. Dimon’s firm got into a mess with “whale trades” – a series of huge bets on derivatives that blew up. JPMorgan suffered large losses. But the scary part is that nobody in charge had a clue what was going on. A damning Senate investigation has concluded that bank officials ignored the warning signals and misled regulators and the public. In other words, nothing has changed. Wall Street is still unable to police itself, and the regulators are unable to police it, either.

There are no simple answers to these problems. The fundamental challenges of democratic capitalism won’t be resolved by a wealth tax or by redistributing more money from rich to poor (although making sure no bank is too big to fail might be a good idea). As Ms. Freeland writes, the credibility of capitalism itself is at stake. “Businessmen who cannot even persuade their own children that business is a morally legitimate activity are not going to succeed, on their own, in persuading the world of it.”
There are no simple answers except we should recognize that two-tiered capitalism has its limits and is now threatening democracy. Having an ever growing permanent underclass collecting disability while executive compensation keeps skyrocketing is not what the Founding Fathers of the United States had in mind in terms of a strong and stable democracy.

The same can be said all over the world where income inequality threatens to erode strong social democracies and hit emerging markets. Interestingly, Michael Shuman of TIME Magazine recently reported, Marx’s Revenge: How Class Struggle Is Shaping the World:
Karl Marx was supposed to be dead and buried. With the collapse of the Soviet Union and China’s Great Leap Forward into capitalism, communism faded into the quaint backdrop of James Bond movies or the deviant mantra of Kim Jong Un. The class conflict that Marx believed determined the course of history seemed to melt away in a prosperous era of free trade and free enterprise.
The far-reaching power of globalization, linking the most remote corners of the planet in lucrative bonds of finance, outsourcing and “borderless” manufacturing, offered everybody from Silicon Valley tech gurus to Chinese farm girls ample opportunities to get rich. Asia in the latter decades of the 20th century witnessed perhaps the most remarkable record of poverty alleviation in human history — all thanks to the very capitalist tools of trade, entrepreneurship and foreign investment. Capitalism appeared to be fulfilling its promise — to uplift everyone to new heights of wealth and welfare.

Or so we thought. With the global economy in a protracted crisis, and workers around the world burdened by joblessness, debt and stagnant incomes, Marx’s biting critique of capitalism — that the system is inherently unjust and self-destructive — cannot be so easily dismissed. Marx theorized that the capitalist system would inevitably impoverish the masses as the world’s wealth became concentrated in the hands of a greedy few, causing economic crises and heightened conflict between the rich and working classes. “Accumulation of wealth at one pole is at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole,” Marx wrote.

A growing dossier of evidence suggests that he may have been right. It is sadly all too easy to find statistics that show the rich are getting richer while the middle class and poor are not. A September study from the Economic Policy Institute (EPI) in Washington noted that the median annual earnings of a full-time, male worker in the U.S. in 2011, at $48,202, were smaller than in 1973. Between 1983 and 2010, 74% of the gains in wealth in the U.S. went to the richest 5%, while the bottom 60% suffered a decline, the EPI calculated. No wonder some have given the 19th century German philosopher a second look. In China, the Marxist country that turned its back on Marx, Yu Rongjun was inspired by world events to pen a musical based on Marx’s classic Das Kapital. “You can find reality matches what is described in the book,” says the playwright.

That’s not to say Marx was entirely correct. His “dictatorship of the proletariat” didn’t quite work out as planned. But the consequence of this widening inequality is just what Marx had predicted: class struggle is back. Workers of the world are growing angrier and demanding their fair share of the global economy. From the floor of the U.S. Congress to the streets of Athens to the assembly lines of southern China, political and economic events are being shaped by escalating tensions between capital and labor to a degree unseen since the communist revolutions of the 20th century. How this struggle plays out will influence the direction of global economic policy, the future of the welfare state, political stability in China, and who governs from Washington to Rome. What would Marx say today? “Some variation of: ‘I told you so,’” says Richard Wolff, a Marxist economist at the New School in New York. “The income gap is producing a level of tension that I have not seen in my lifetime.”

Tensions between economic classes in the U.S. are clearly on the rise. Society has been perceived as split between the “99%” (the regular folk, struggling to get by) and the “1%” (the connected and privileged superrich getting richer every day). In a Pew Research Center poll released last year, two-thirds of the respondents believed the U.S. suffered from “strong” or “very strong” conflict between rich and poor, a significant 19-percentage-point increase from 2009, ranking it as the No. 1 division in society.

The heightened conflict has dominated American politics. The partisan battle over how to fix the nation’s budget deficit has been, to a great degree, a class struggle. Whenever President Barack Obama talks of raising taxes on the wealthiest Americans to close the budget gap, conservatives scream he is launching a “class war” against the affluent. Yet the Republicans are engaged in some class struggle of their own. The GOP’s plan for fiscal health effectively hoists the burden of adjustment onto the middle and poorer economic classes through cuts to social services. Obama based a big part of his re-election campaign on characterizing the Republicans as insensitive to the working classes. GOP nominee Mitt Romney, the President charged, had only a “one-point plan” for the U.S. economy — “to make sure that folks at the top play by a different set of rules.”

Amid the rhetoric, though, there are signs that this new American classism has shifted the debate over the nation’s economic policy. Trickle-down economics, which insists that the success of the 1% will benefit the 99%, has come under heavy scrutiny. David Madland, a director at the Center for American Progress, a Washington-based think tank, believes that the 2012 presidential campaign has brought about a renewed focus on rebuilding the middle class, and a search for a different economic agenda to achieve that goal. “The whole way of thinking about the economy is being turned on its head,” he says. “I sense a fundamental shift taking place.”

The ferocity of the new class struggle is even more pronounced in France. Last May, as the pain of the financial crisis and budget cuts made the rich-poor divide starker to many ordinary citizens, they voted in the Socialist Party’s François Hollande, who had once proclaimed: “I don’t like the rich.” He has proved true to his word. Key to his victory was a campaign pledge to extract more from the wealthy to maintain France’s welfare state. To avoid the drastic spending cuts other policymakers in Europe have instituted to close yawning budget deficits, Hollande planned to hike the income tax rate to as high as 75%. Though that idea got shot down by the country’s Constitutional Council, Hollande is scheming ways to introduce a similar measure. At the same time, Hollande has tilted government back toward the common man. He reversed an unpopular decision by his predecessor to increase France’s retirement age by lowering it back down to the original 60 for some workers. Many in France want Hollande to go even further. “Hollande’s tax proposal has to be the first step in the government acknowledging capitalism in its current form has become so unfair and dysfunctional it risks imploding without deep reform,” says Charlotte Boulanger, a development official for NGOs.

His tactics, however, are sparking a backlash from the capitalist class. Mao Zedong might have insisted that “political power grows out of the barrel of a gun,” but in a world where das kapital is more and more mobile, the weapons of class struggle have changed. Rather than paying out to Hollande, some of France’s wealthy are moving out — taking badly needed jobs and investment with them. Jean-Émile Rosenblum, founder of online retailer Pixmania.com, is setting up both his life and new venture in the U.S., where he feels the climate is far more hospitable for businessmen. “Increased class conflict is a normal consequence of any economic crisis, but the political exploitation of that has been demagogic and discriminatory,” Rosenblum says. “Rather than relying on (entrepreneurs) to create the companies and jobs we need, France is hounding them away.”

The rich-poor divide is perhaps most volatile in China. Ironically, Obama and the newly installed President of Communist China, Xi Jinping, face the same challenge. Intensifying class struggle is not just a phenomenon of the slow-growth, debt-ridden industrialized world. Even in rapidly expanding emerging markets, tension between rich and poor is becoming a primary concern for policymakers. Contrary to what many disgruntled Americans and Europeans believe, China has not been a workers’ paradise. The “iron rice bowl” — the Mao-era practice of guaranteeing workers jobs for life — faded with Maoism, and during the reform era, workers have had few rights. Even though wage income in China’s cities is growing substantially, the rich-poor gap is extremely wide. Another Pew study revealed that nearly half of the Chinese surveyed consider the rich-poor divide a very big problem, while 8 out of 10 agreed with the proposition that the “rich just get richer while the poor get poorer” in China.

Resentment is reaching a boiling point in China’s factory towns. “People from the outside see our lives as very bountiful, but the real life in the factory is very different,” says factory worker Peng Ming in the southern industrial enclave of Shenzhen. Facing long hours, rising costs, indifferent managers and often late pay, workers are beginning to sound like true proletariat. “The way the rich get money is through exploiting the workers,” says Guan Guohau, another Shenzhen factory employee. “Communism is what we are looking forward to.” Unless the government takes greater action to improve their welfare, they say, the laborers will become more and more willing to take action themselves. “Workers will organize more,” Peng predicts. “All the workers should be united.”

That may already be happening. Tracking the level of labor unrest in China is difficult, but experts believe it has been on the rise. A new generation of factory workers — better informed than their parents, thanks to the Internet — has become more outspoken in its demands for better wages and working conditions. So far, the government’s response has been mixed. Policymakers have raised minimum wages to boost incomes, toughened up labor laws to give workers more protection, and in some cases, allowed them to strike. But the government still discourages independent worker activism, often with force. Such tactics have left China’s proletariat distrustful of their proletarian dictatorship. “The government thinks more about the companies than us,” says Guan. If Xi doesn’t reform the economy so the ordinary Chinese benefit more from the nation’s growth, he runs the risk of fueling social unrest.

Marx would have predicted just such an outcome. As the proletariat woke to their common class interests, they’d overthrow the unjust capitalist system and replace it with a new, socialist wonderland. Communists “openly declare that their ends can be attained only by the forcible overthrow of all existing social conditions,” Marx wrote. “The proletarians have nothing to lose but their chains.” There are signs that the world’s laborers are increasingly impatient with their feeble prospects. Tens of thousands have taken to the streets of cities like Madrid and Athens, protesting stratospheric unemployment and the austerity measures that are making matters even worse.

So far, though, Marx’s revolution has yet to materialize. Workers may have common problems, but they aren’t banding together to resolve them. Union membership in the U.S., for example, has continued to decline through the economic crisis, while the Occupy Wall Street movement fizzled. Protesters, says Jacques Rancière, an expert in Marxism at the University of Paris, aren’t aiming to replace capitalism, as Marx had forecast, but merely to reform it. “We’re not seeing protesting classes call for an overthrow or destruction of socioeconomic systems in place,” he explains. “What class conflict is producing today are calls to fix systems so they become more viable and sustainable for the long run by redistributing the wealth created.”

Despite such calls, however, current economic policy continues to fuel class tensions. In China, senior officials have paid lip service to narrowing the income gap but in practice have dodged the reforms (fighting corruption, liberalizing the finance sector) that could make that happen. Debt-burdened governments in Europe have slashed welfare programs even as joblessness has risen and growth sagged. In most cases, the solution chosen to repair capitalism has been more capitalism. Policymakers in Rome, Madrid and Athens are being pressured by bondholders to dismantle protection for workers and further deregulate domestic markets. Owen Jones, the British author of Chavs: The Demonization of the Working Class, calls this “a class war from above.”

There are few to stand in the way. The emergence of a global labor market has defanged unions throughout the developed world. The political left, dragged rightward since the free-market onslaught of Margaret Thatcher and Ronald Reagan, has not devised a credible alternative course. “Virtually all progressive or leftist parties contributed at some point to the rise and reach of financial markets, and rolling back of welfare systems in order to prove they were capable of reform,” Rancière notes. “I’d say the prospects of Labor or Socialists parties or governments anywhere significantly reconfiguring — much less turning over — current economic systems to be pretty faint.”

That leaves open a scary possibility: that Marx not only diagnosed capitalism’s flaws but also the outcome of those flaws. If policymakers don’t discover new methods of ensuring fair economic opportunity, the workers of the world may just unite. Marx may yet have his revenge.
Indeed, if policymakers don't stop shamelessly pandering to the "super-elites" and tackle the ongoing jobs crisis and rein in gross income inequality, Marx may yet have his revenge.

And if Marx was alive today, he'd be pouring over pension documents, scrutinizing trends in global pensions, warning of the onslaught that is taking place on private and public pensions. He would recognize that retirement is history, disability the new norm, and realize the financial elites are not done milking the pension cash cow. Far from it, they're just getting started.

On that cheery note, leave you watch a clip from Real News where one of my favorite economists, Michael Hudson, discusses Obama's Catfood Reform. Michael sent me an email yesterday commenting on Der Spiegel's interview with Carmen Reinhart on the ongoing crisis, stating:
What a really stupid interview. Thanks for alerting us to the New Nonsense. She fails to realize that we're in a debt deflation. "Inflating our way out of debt" can only occur ON CREDIT. And this will deflate economies all the more.
Just another thing to keep in mind as pensions struggle with their rate-of-return fantasy. Watch Michael Hudson's latest interview below (transcript available here). Enjoy your weekend.