The irony is that, when corrupt gangsters who employed hooligans to maim and even kill dissidents were in charge of US unions, US workers had it better than today, as the gangsters stole less from US workers than nice neoliberal fund managers who are bankrupting their pensions:
<blockquote><http://www.cepr.net/Economic_Reporting_Review/nytimesarticles/teamsters_11_22.htm> November 15, 2004 Teamsters Find Pensions at Risk By MARY WILLIAMS WALSH
In the 1960's and 1970's, the Teamsters' huge Central States pension fund was a wellspring of union corruption. Tens of millions of dollars were loaned to racketeers who used the money to gain control of Las Vegas casinos. Administrative jobs were awarded to favored insiders who paid themselves big fees. A former Teamster president and pension trustee was convicted of trying to bribe a United States senator.
Yet for nearly half a million union members who are expecting the fund to pay for their retirement, those may have been the good old days.
Since 1982, under a consent decree with the federal government, the fund has been run by prominent Wall Street firms and monitored by a federal court and the Labor Department. There have been no more shadowy investments, no more loans to crime bosses. Yet in these expert hands, the aging fund has fallen into greater financial peril than when James R. Hoffa, who built the Teamsters into a national power, used it as a slush fund.
The unfolding situation holds a hard lesson for others with responsibility for retirement money. What may appear as a sensible, conventional approach to investing - seeking a diversified mix of growth and income investments for the long term - can wreak havoc when applied to a pension fund, especially one in a dying industry with older members who are about to make demands of it.
But the kinds of investments that make sense for such a fund - like long-term bonds that will mature as members enter retirement - are not attractive to most money managers, because they generate few fees. Consequently, very few pension funds use such strategies today.
At the end of 2002, the pension fund had 60 cents for every dollar owed to present and future retirees - a dangerous level. In a rough comparison, the pension fund for US Airways' pilots had 74 cents for every dollar it owed in December 2002, just before it defaulted. During the bear market after the technology bubble burst, Central States' assets lost value as its obligations to retirees ballooned, causing a mismatch so severe that the fund had to reduce benefits last winter for the first time in its 49-year history.
"There never were benefit cuts in the 1970's," said Wayne Seale, 52, a long-haul driver from Houston and one of about 460,000 Teamsters participating in the fund. "We were happy. We were being taken care of."
If the pension fund fails, it will be taken over by a government insurance program. In that case, some Teamsters would lose benefits.
Hoffa and his successors had put an extraordinary 80 percent of Central States' money into real estate. Instead of hotels, casinos and resorts, its new managers - first Morgan Stanley and later Bankers Trust, Goldman Sachs and J. P. Morgan - invested the money mostly in stocks, and to a lesser extent, in bonds. At the end of 2002, about 54 percent of the fund's assets were in stocks, somewhat less than the average corporate pension fund, which had about 74 percent of assets in stocks that year, according to Greenwich Associates, a research and consulting firm.
Federal law calls for fiduciaries to invest pension assets the way a "prudent man" would, and the strategy used for Central States would certainly be familiar to wealthy individuals, philanthropic trusts, university endowments and other pension funds. The fund's investment results in recent years closely track median annual returns for corporate pension funds, according to Mercer Investment Consulting.
The assets lost 4.5 percent of their value in 2001 and 10.9 percent in 2002, but gained 25.5 percent in 2003, according to the fund's executive director and general counsel, Thomas C. Nyhan.
Morgan Stanley and J. P. Morgan declined to comment. Goldman Sachs defended its record, pointing out that it had exceeded its benchmarks in a very tough market.
But the Central States situation shows that using stocks or other volatile assets to secure the obligations of a mature pension fund greatly increases the risk of getting caught short-handed in a down market. If that happens it can be nearly impossible to bring the ailing pension fund back. This is what has happened recently to pension funds at United Airlines and US Airways.</blockquote> -- Yoshie
* Critical Montages: <http://montages.blogspot.com/> * Greens for Nader: <http://greensfornader.net/> * Bring Them Home Now! <http://www.bringthemhomenow.org/> * OSU-GESO: <http://www.osu-geso.org/> * Calendars of Events in Columbus: <http://sif.org.ohio-state.edu/calendar.html>, <http://www.freepress.org/calendar.php>, & <http://www.cpanews.org/> * Student International Forum: <http://sif.org.ohio-state.edu/> * Committee for Justice in Palestine: <http://www.osudivest.org/> * Al-Awda-Ohio: <http://groups.yahoo.com/group/Al-Awda-Ohio> * Solidarity: <http://www.solidarity-us.org/>