Wall street wants your $$ and wants to break your Unions.

During most of the Bush regime, Social Security "reform" was the star of the Bush administration’s agenda. The idea was to give over $1 trillion from our Social Security payments to create personal investment accounts for employees under 55 years old. Those retirement funds would have been handled by being invested in the stock market.


Our accounts would have magically multiplied in value, giving us a comfortable retirement. You would have taken the risk but not the brokers; no matter how poorly they performed they would have "earned" a percentage of your money to reward their "investment skills".
No matter what happened, the brokers would have been guaranteed huge profits regardless of performance.

A fee of only two percent would have given a return on $1 trillion of $20 billion win, lose or draw.

Well, we all know how that would have worked out.

This situation has been a long time coming. Wall Street thinks that they should have your paycheck whether is called a bailout or "reform". Union pension funds have always been seen as a pot of money workers don’t deserve.

Now, as Wall Street failures get free handouts from the taxpayer. Secretary of the Treasury Paulson sings "I’ll spend it my way" to the tune of Sinatra's I did it my way.
While the banks and Paulson refuse to say where the money is going, the right wing is tries to make sure that the big three don’t get any help.

Sure the CEOs of the big three were idiots for flying private jets to Washington, but this is a smokescreen for the ongoing campaign against Unions. "They make $70.00 an hour!" is the war cry. The $70.00 figure is only true if you include all retirees and all current workers at the present pay scale and don’t look to 2009 where the new UAW pay scale is nearly half of what today’s workers can earn.

Wall Street and the Government use a two prong attack to break Unions

The recent near collapse of the Teamsters’ Central States Pension Fund is frightening to all workers planning on a pension. The fund covered about 460,000 until UPS was allowed to pull out 44,000 workers. The CSPF even during the Mob years was famous for being able to provide benefits for all of its members until the funds were made a piggy bank for the only group greedier than the mob, Wall Street.

Did the Teamsters lose the money?

The federal government started attacking pensions and Union power under the Kennedy administration and continued under both Democrats and Republicans under the disguise of a campaign against organized crime.

Starting with attacks on the Teamsters, the reason given for the anti-Union campaign was a fight against crooked Unions and Mafia involvement. The links to the mob were real and many Teamster leaders were involved, and convicted of crimes. While ridding the Unions of corruption is a great goal and makes good headlines, there was always a dual agenda, and this was the first step in a long campaign against organized labor in the modern age.

While U.S. corporations and their paid for politicians were claiming to punish corruption, the real target was Jimmy Hoffa's attempt to unite workers in all transport industries into a single Union. The second motive was to gain control of Union pension funds. The control of the Union pension funds would allow the corporations to loot the funds and destroy one of the great drivers of Unionization, security in retirement.

The Teamsters - mainly due to real connections with organized crime were forced in 1982 to turn over control of the Union to the the government. The prizes for the Corporations were two, huge funds and ongoing income of the Central States Fund and the removal of the Union power provided by a fund this size.

The pension fund was turned over to the control of Morgan Stanley, and the cash and half a million employees future became toys for Morgan Stanley. They didn't care if they broke the toys. When the Unions lost control of their investments, they also lost the political power that went with the choice of where to invest.

Morgan Stanley immediately started shifting pension funds into high-risk investments. Buying and selling investments repeatedly to earn fees with no regard for the investor is called churning, an old reliable income generator for brokers. The old method of long term stable investments did not generate enough fees. When successful, the investments earned fat bonuses for the brokers. When risky investments failed the brokers fees never stopped. Only the employees depending on the funds for a secure retirement took any risk. The bankers couldn't lose.

By 2003, after years of the greatest stock market gains in history the pension fund could only find 60 cents for every dollar owed to retired members, and for the first time cut benefits. While cutting pensions, a new rule cut off benefits for employees if the employees returned to work. They were not to be allowed to make up what Wall Street had lost.

Little mentioned is that while the Teamsters’ Fund lent nearly half a billion dollars to Las Vegas’ casinos and hotels during the 1960’s and 70’s, the loans were repaid and the CSPF had always paid benefits owed to its members.

Pension looting as a Union busting tool

The Teamsters retirement funds collapse is not a unique incident. At the top of the list of "under funded" defined benefit pension plans are the "big oil" companies like Exxon which is now crying that they may be forced to spend money if forced to fund pensions to the letter of the law. In 2002 the list included General Motors, Ford, IBM, Boeing, Exxon Mobil, DuPont, Verizon, Lucent and Delphi Automotive. Airlines have been allowed to file bankruptcy, break Union contracts, leave pensions unpaid, and return to profitability with no obligation to restore the pensions of the employees that built the companies.

Many major corporations have followed the models set by the airline and steel industries by defaulting on their pension plans. The pattern has been clear, first the pension funds are used to pay gross executive salaries, provide golden parachutes. The next step is bankruptcy and a release from Union contracts and pension plans. This model of looting and Union breaking became commonplace during the Bush years.

"Under funding" should called what it is, theft. Pensions are a part of workers’ wages. To earn a secure retirement workers delay part of their pay to provide retirement income.

You pay, you lose, you still pay

When the Pension Benefit Guarantee Corporation was created it was sold as a back up in case an employer pension fund collapsed. At the same time regulations that had long protected employee retirement funds were deregulated, with the claim that freeing the funds from government oversight would allow them to invest freely and grow.

The PBGC is funded by premiums paid by corporations.Premiums that are much less than the amount needed to provide promised benefits if the employer collapses or files for bankruptcy. in a move to escape pension obligations while breaking Unions. At the same time the Corporations were looting their employees pension funds they were lobbying to keep down the payments that would have provided a secure fall back.

In 2005 the PBGC announced a loss of $12.1 billion. The losses increased the PBGC’s deficit to over $23 billion. At that time the PBGC had $39 billion to cover $62 billion owed to retirees. At the same time the government consistently refused to enforce even the lax standards for premium payments that were in place, allowing the gap of assests to grow. The PBGC solution was to cut benefits to employees further rather than collect what was owed.

In 2005 it became clear the PBGC would go fail unless it received billions from the government. When the PBGC takes over pensions it receives the funds of the pensions it controls. Union pension funds make a highly visible target to help bail out years of government mismanagement.

In the years after WWII while the U.S. was becoming a better and better place for the worker, corporations paid about 48 percent of the Federal taxes collected. In 2005 that percentage had fallen to seven percent. This means that workers must pick up the tab first paying for their pensions and then paying the taxes for the PBGC to pick up after the companies go bankrupt.

If pensions were still paid at the agreed upon rate we could make an argument that the government was doing its job, but when companies default on a pension plan, the PBGC, slashes pension benefits by as much as sixty percent. The right is looking for a triple dip. They lost your original pension funds through greed. You are paying the taxes for the PBGC, and they want your pensions to fund the PBGC.

The current bail out is providing "pension" plans for millionaires and billionaires while the right wing foams at the mouth at the suggestion that any Union pension plan be helped in any way. The solution for the right is now to have the big three file bankruptcy, smash the Unions, and drop their pension obligations. Maybe if we called a pension a golden parachute they might let it slide..

Should we let the big three collapse? Do they deserve to fail for bad judgement? We need to look at recent history to judge Wall Streets motives and the possible results. If the deregulating, private account crowd had gotten their way, Social Security would now be bankrupt.

Until Wall Street wanted your money Government intervention was evil. Now government intervention is only evil if it might continue to provide jobs for Union workers. The Bush administration was preparing toloot Social Security in the same way they allowed the Teamsters and other pension funds and the stock market. Unions built strong funds that can recover, but not if they are forced under Wall Street management schemes.

Social Security must be kept strong as an example of the meaning of Security. Pension funds must be kept strong for the workers who trusted their security to these funds. We can not allow the economic crisis to be used as an excuse to break Unions.

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