[Occupymendocino] Banksters win again

[ELLEN ROSSER]

Where's the Outrage? Congress Changes Savings Accounts and Retirement
Funds, and America Sleeps

By Tess Vigeland, Guardian UK

17 December 14



*Nothing is permanent in this wicked world except banks getting whatever
they want, whenever they want, regardless of the risk to their own
customers. Two major provisions in the US budget bill spell doom for US
savers and retirees*


o you remember where you were six years ago? Probably not. It was a long,
long time ago. December 2008 is not one of those dates that gets burned on
your brain, like the moon landing, or D-Day, or the end of Seinfeld.

But I remember where I was. I was at my post as the host of a personal
finance show on national radio, and I was taking calls from people all over
the country who were a) furious that their tax dollars were siphoned off to
pay for a massive bank bailout that crashed the world economy, and b)
outraged that the stock market was responding by wiping out their
already-meager retirement and college education savings funds.

In December 2008, the number of jobs shrank by 533,000, the worst monthly
loss in more than 30 years. Construction permits fell by more than 12% as
people stopped buying houses. And retailers got a giant lump of coal from
consumers, who decided that buying a bunch of worthless junk to put under a
tree was probably not the best idea when their bank accounts – not the
mention the country’s – were circling the drain.

“This shall not stand!” we cried, then. “We can never allow our own savings
to be put at risk like this!”

And yet. Here we are again.

Congress has passed, and President Obama has said he would sign, a budget
bill that allows banks to use your savings when they make giant financial
bets called derivatives. Again.

And because those savings are insured by the federal government, you, the
taxpayer, would be on the hook if those bets go south. Again.

This isn’t arcane financial stuff we can ignore. These are the exact
financial mechanisms that led to the global crisis just six (short!) years
ago. The Dodd-Frank reform law that was passed in the wake of that crisis
forbade this from ever happening.

Charlie Chaplin said that nothing is permanent in this wicked world, not
even our troubles. I’d add that nothing is permanent in this wicked world
except banks getting whatever they want, whenever they want, regardless of
the risk to their own customers. Regardless of the risk to the rest of us.

In addition to all that, this so-called compromise also contains a
provision that would wreak havoc on the pensions of more than 10 million
American workers, who likely have no idea this is coming.

Pension plans were promises to employees that they could count on a certain
income in retirement. Unlike the 401k that most of us are familiar with,
where we have to rely on our own savings and our own strategies for
investing that money, pensions were a guaranteed payout.

That’s why pensions don’t really exist anymore: because they’re expensive,
and if a company doesn’t plan correctly, it’s easy to run out of money. The
Pension Benefit Guarantee Corporation, or PBGC, has to take over the plans
from employers who go bankrupt or bust or simply can’t make the payments.

That has happened over and over again, and workers with those pensions have
found their benefits cut in half or even more.

Now there’s a real pension crisis. The PBGC itself is now in something of a
hole, and warned recently that it doesn’t have the reserves to pay even the
reduced amount of the income that was promised to millions of workers.

And a proposal in this same budget bill would allow some pension plans to
cut current benefits to employees who are retired – if those plans can show
that they’ll otherwise run out of money in the next 10-20 years. The
proposal applies to multi-employer pension plans, which cover a diverse
cross-section of blue-collar workers such as truck drivers and people in
construction.

This isn’t supposed to be legal.

>From their beginnings, if you were already retired, your benefits were
supposed to be untouchable.

Change the payout on workers who are still working, sure (because it’s OK
to break promises and alter people’s lives as long as you give a few years’
notice), but don’t touch the folks who’ve already started the golden years.

But now, they’re fair game, too.

Supporters say this is simply part of the necessary give-and-take of the
political process. Nonsense. They can make other choices that don’t subject
Americans to financial ruin.

As someone who spent six years taking calls on-air from people who will
never fully recover from the devastating losses they experienced during and
after the 2008 crisis, and from pensioners who watched their benefits get
cut and wondered how all the financial planning they did around that number
they were promised was somehow rendered useless, I wish I could go back in
a time machine and warn everyone that George Santayana was right: those who
do not remember the past are doomed to repeat it, or worse, allow it to be
repeated by others.

People in the personal finance field love to talk about how if we could
just get more Americans to save, if we could just get more Americans to
learn the basics of the stock market, if we could just convince Americans
to forego that latte at Starbucks, if we could just put Americans on a
budget, then things would be OK.

But how is any of that supposed to work when banks can use people’s savings
to play the roulette wheel that is the stock market – and then when they
lose, they just order another cup of coffee and use the federal budget to
make sure that the losses fall not on them but on the people who just tried
to save a little money in the first place?

This one is only on workers if they say nothing and fail to educate
themselves on what is being plundered from their futures. The powers that
be are counting on you not to pay attention, or to feel so impotent that
you just give up and say “Well, really, what can I do?”

How about instead of calling a personal finance show, you call your senator
or representative and tell them your story, and ask them how they would
solve your financial predicament? They should hear your stories. When I
heard them, I got angry, I felt for you and I tried to help.

Maybe if you tell those stories, someone else will listen, and try to help.
Or at least try not to make things worse.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://lists.mcn.org/pipermail/occupymendocino/attachments/20141217/cbaa8683/attachment.html