When people realize these aren't two mutually exclusive concepts, they can begin to have a more rational debate. It's not like socialism is fire and capitalism is water for fuck's sake. I prefer to think of them and more yin and yang. OHM....

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if someone can't keep working doing hard physical labor when they turn 65, just put them on an ice floe. usa! usa!

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You're tied to the economy both ways! What the hell do you think pension funds invest in? The difference is who chooses the investment mix.

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Yeah, is that why everyone is stupid over this? Because they don't understand that sob story.

The problem with Enron is that, like with many other companies, the 401k match was in company stock. The money employees contributed was theirs to invest as they saw fit! The problem was that many employees selected of their own volion to heavily invest in more company stock and got wiped out when it did. Because they're bad at investing, and because the company's "retirement advisors" encouraged them to do it.

A pension plan is also fundamentally tied to the equity of a firm as well, so I still don't see your point. At least SOME people with Enron 401k's got out - in a pension scenario EVERYONE is left with nothing.

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There aren't that many large companies in the U.S. There are 7 million companies TOTAL in the U.S. The largest ones are the Fortune 1,000. Number 1,000 has just $1.5 billion in sales. So you can do the math as to how many "big rich" companies are out there - not many.

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I really don't like to frame it that way - it's so vulnerable to populism because 1.5B is insanely large. I just picture some Congressional chucklefuck saying "BILLION" in that way that makes his cheeks puff and lips flobber out like rubber sausages. Keep it kinda high-level and philosophical, the argument is won easily enough there before you dredge up the details or try to paint corporations as victims worthy of sympathy.

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If someone makes $50,000/year (avg U.S. hhold income) - some people can handle having a $10,000 line of credit and some can't. So you are saying penalize the ones who can handle it (say, because they are in their early 30s and their income is on an upswing) and some can't (someone in their 50s with a no-future job who uses the money to buy a motorboat). It is a dangerous road to say "you can have it - you can't" or to just universally say "no one can have it".

If one of my kids needed expensive experiemntal surgery, I wouldn't want someone saying "you can't borrow $20K because we don't think you can handle it".

It's like saying an alcoholic isn't at fault because it is so easy to buy booze. Existence of something (be it alcohol or credit) doesn't equate to being forced to use it.

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"Why is it the banks' "fault" because credit is "too loose"? Define "too loose"- that is the problem."

It is a dangerous road to say "you can have it - you can't" or to just universally say "no one can have it".

First of all, by design: bank don't want to to be able to get out of debt. They want you in debt, forever. That is how they make money. That is why the financial services industry has been growing like poison ivy for the past 20 years.

Solution: France has a good one. You credit card limit is a small percentage of your PROVEN annual salary. No more of this bullshit letting Americans lie on their credit applications by overstating their income and banks not checking this because they want you in debt (forever) so they can hit you with fees and interest charges.

If you prove $50,000 salary, you get a $15,000 credit limit. If you prove a $12,000 salary, you get an $1,800 limit. APRs can go no higher than 20%. (If you're a 21% credit risk, the banks shouldn't loan to you.)

Very simple, really.

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Toyota doesn't have this problem. And in Japan an MRI costs $98 (and it's not subsidized by the govenrment).

This is an argument for strengthening entitlements and putting it back into the govenrment as its core social responsibility so that GM doesn't have to deal with this shit.

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That's, yeah, that's kind of the thing. The pensions were a lie to begin with.

All those pension promises were based on unrealistic growth projections for pension fund assets. You see, when you're negotiating with a union and you don't want to contribute more profit to pay members of that union, you make claims of compensation based on theoretical asset performance. It's the only way everybody can win. Otherwise, there would be many more profit/labor wrangling up front and the deals wouldn't get done. Far better to force those hard conversations on future executive regimes!

Worse, tons of pension plans for municipal and state governments are critically underfunded and cannot pay their obligations. Some municipalities have begun going bankrupt to avoid these obligations. It's a growing problem for economic growth, because that's all funded by municipal bonds tied to the credit rating of local towns. While the Federal Government is AAA, plenty of cities and towns have junk ratings. That means that progress is difficult to achieve using conventional funding. I theorize that this will extend the lord/vassal relationship between state governments and their Congressional overlords, effectively killing state sovereignty.

Overall, though, what's happened here is that all these promises of secured retirement income are turning out to be lies due to a break in the responsibility between the promiser and the one who actually has to pay you. Yeah, 401k's aren't exactly paying for your retirement, but I'd wager you'll get more out of those then you will from our decaying blue-collar large-cap-value industrial firms. Or your teachers' union pension lie.

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If you think it's such a vacation, why are you in your "private sector" job?

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Oh yes! There's also this, recently, from New York City. Who watches the watchmen, indeed?

[dealbook.blogs.nytimes.com]

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Also, the problem that you're facing in LA (and, I assume, all of California if it's a product of shoddy state law) doesn't actually obviate the problem that I'm suggesting exists: that tenure does, in many instances, still serve a useful purpose, and that, in fact, there remains no effective metric for measuring a teacher's performance.

Are you saying that LA's problems mean that there IS an effective metric?

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This seems counter-productive.

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