If employers were honorable there would be no need for unions. This is not to say that unions are blameless: if union bosses were honorable there would be no desire to bust unions.
Of course, if people were honorable we wouldn’t need regulations, guns, or most of our laws.
Guess we have to accept the idea that pretty much anyone can be dishonorable, and plan accordingly.
One big difference is that the union pensions were part of what the workers were paid for work that they did. No one enters employment with the understanding that they have a risk that they might not get paid. Bond holders, on the other hand, were investing in something that paid better than a savings account, precisely because it is more risky than a savings account. If you invest in a city that is badly run, whether because of incompetence in management or because of blind conservative tax cutting that makes the city insolvent, you knew the risks when you invested.
Thank you for making this information available to those of us who don’t know the intricacies of the story.
If this is truly the case, it would make sense that Lisa should be drawing a different cartoon, showing the workers (“makers”) being shafted by the bondholders (“takers”). The workers should be able to keep the money they were promised. Investors do not have any guarantees that their investments will pay off, and sometimes the investments don’t. That’s what happens when you gamble.
It makes no sense to me that workers should have to bail out gamblers because of their bad fortune.
But….since the workers are union, that evidently takes them out of the realm of “makers”.
So, Ms. Benson seems to be saying that a judge should violate the state constitution so that gamblers can recoup their losses, paid for by working civilians. Do I have this right?
“Stockton made commitments in pay to it’s employees that are legally required to be met as CA’s constitution says pension commitments are inviolable.”
A few of the little tiny facts that were omitted. Several years ago when California was feeling flush they over extended their infrastructure commitments for building, and the unions got wage and benefit packages that were some of the best in the country. In California, the unions literally sit in on the budget negotiations for the state funding. They are now so powerful they dictate their wage and benefit increases.
So yes, the obligation is there on the part of the city, and yes the city mismanaged their funds, but it’s a little more complex than alluded to in the article you quote.As has been reported before, this isn’t the first city in California and likely won’t be the last that files for bankruptcy protection. It is also a common issue that the pension obligations and wage and benefit packages of the unions are a significant part of their deficits.
And let me quickly add that I was not referring specifically to you about the name-calling. I know you are above that, and thank you for it. On the other hand, many posters here will spoil an otherwise educational post with a tag like, “if you weren’t such a __________, you’d know this, but what can we expect from people like you?”
So let’s see, the investment bankers selling phony baloney investments based on worthless derivatives to cities, counties, and states had nothing to do with the current situations we are in now, but the unions did. Interesting but once again Ms Benson is completely full of it.
We all know those poor shareholders were far more deserving than the employees, taking out of account standard accounting procedures. plus look at the damage it will do to the economy, the wall street investors would have used the cash to buy a yacht, all those lazy workers will only use it to stave off bankrupsy, after all when has a home being foreclosed on EVER been detrimental to the economy.
As a general rule don’t make promises you can’t keep, that said as a legal rule don’t make contracts you have no intent to keep, thats a great way of finding friends in the court system
“What should, if anything, the pensioners have to give up?”
I can’t answer that in the general sense, only look to the law. “In bankruptcy, while claims arising from pension plan obligations may have priority over general unsecured claims in particular circumstances and with certain monetary limits, they are usually treated as general unsecured claims without any priority or substantiated status in connection with any distribution in bankruptcy.”
The above quote is from (Page 50) the “Pension Protection act of 2006” and essentially says (I’m summarizing) that particularly the unfunded pension liability of a company doesn’t take precedent over any other creditor. Be advised, these unfunded amounts are so significant in some circumstances, that the courts feel they have to make special dispensation in dealing with them, whether favorably or unfavorably.
David, to your point of fairness or legality or immorality, I question the fairness and moral obligation of ANY entity with a pension liability that “kicks it down the road” because they would rather spend money on other things, whether a business or a municipality.
What is coming to light here is the fiscal mismanagement of government, regardless of the level, Local to Federal. I don’t fault the unions, they fight for their members as they should. By the same token it is the responsibility of the government to efficiently use taxpayer monies to their best purpose, and it can be said they haven’t done that.
Just to soak up some more space on this issue. President Obama set somewhat of a precedent in the G.M. bankruptcy by acting contrary to established law. He essentially gave the unions and their pensions a pass while stripping the bondholders and stockholders of any compensation. It seriously hurt many pension funds that held G.M. stock and bonds in their portfolios and many individual investors (large contingent of seniors) that held G.M. for retirement purposes. In effect, the UAW walked away with all the money.
“Once unions were needed and a good thing…now they are putting companies out of business (twinkies) and destroying cities and states.”-Read about what Hostess did with the employee pension funds, then come back.
ConserveGov about 11 years ago
That’s what happens when you promise the world to everybody without any real plan to pay for it.
Call it Hope And Change, but it’s really Bait and Switch.
And when it does inevitably fail, just blame somebody else again and again.
Sounds like The Barry Hustle.
alcors3 about 11 years ago
Corporate greed, union greed and a public that thinks $9.99 is way cheaper than 10:00.
I Play One On TV about 11 years ago
If employers were honorable there would be no need for unions. This is not to say that unions are blameless: if union bosses were honorable there would be no desire to bust unions.
Of course, if people were honorable we wouldn’t need regulations, guns, or most of our laws.
Guess we have to accept the idea that pretty much anyone can be dishonorable, and plan accordingly.
ARodney about 11 years ago
One big difference is that the union pensions were part of what the workers were paid for work that they did. No one enters employment with the understanding that they have a risk that they might not get paid. Bond holders, on the other hand, were investing in something that paid better than a savings account, precisely because it is more risky than a savings account. If you invest in a city that is badly run, whether because of incompetence in management or because of blind conservative tax cutting that makes the city insolvent, you knew the risks when you invested.
I Play One On TV about 11 years ago
Thank you for making this information available to those of us who don’t know the intricacies of the story.
If this is truly the case, it would make sense that Lisa should be drawing a different cartoon, showing the workers (“makers”) being shafted by the bondholders (“takers”). The workers should be able to keep the money they were promised. Investors do not have any guarantees that their investments will pay off, and sometimes the investments don’t. That’s what happens when you gamble.
It makes no sense to me that workers should have to bail out gamblers because of their bad fortune.
But….since the workers are union, that evidently takes them out of the realm of “makers”.
So, Ms. Benson seems to be saying that a judge should violate the state constitution so that gamblers can recoup their losses, paid for by working civilians. Do I have this right?
Mickey 13 about 11 years ago
“Stockton made commitments in pay to it’s employees that are legally required to be met as CA’s constitution says pension commitments are inviolable.”
A few of the little tiny facts that were omitted. Several years ago when California was feeling flush they over extended their infrastructure commitments for building, and the unions got wage and benefit packages that were some of the best in the country. In California, the unions literally sit in on the budget negotiations for the state funding. They are now so powerful they dictate their wage and benefit increases.
So yes, the obligation is there on the part of the city, and yes the city mismanaged their funds, but it’s a little more complex than alluded to in the article you quote.As has been reported before, this isn’t the first city in California and likely won’t be the last that files for bankruptcy protection. It is also a common issue that the pension obligations and wage and benefit packages of the unions are a significant part of their deficits.
I Play One On TV about 11 years ago
And let me quickly add that I was not referring specifically to you about the name-calling. I know you are above that, and thank you for it. On the other hand, many posters here will spoil an otherwise educational post with a tag like, “if you weren’t such a __________, you’d know this, but what can we expect from people like you?”
Tempus Fugit Premium Member about 11 years ago
So let’s see, the investment bankers selling phony baloney investments based on worthless derivatives to cities, counties, and states had nothing to do with the current situations we are in now, but the unions did. Interesting but once again Ms Benson is completely full of it.
Peabody-Martini about 11 years ago
Flagged for advocating violence against people with a different point of view.
Quipss about 11 years ago
We all know those poor shareholders were far more deserving than the employees, taking out of account standard accounting procedures. plus look at the damage it will do to the economy, the wall street investors would have used the cash to buy a yacht, all those lazy workers will only use it to stave off bankrupsy, after all when has a home being foreclosed on EVER been detrimental to the economy.
As a general rule don’t make promises you can’t keep, that said as a legal rule don’t make contracts you have no intent to keep, thats a great way of finding friends in the court system
Mickey 13 about 11 years ago
“What should, if anything, the pensioners have to give up?”
I can’t answer that in the general sense, only look to the law. “In bankruptcy, while claims arising from pension plan obligations may have priority over general unsecured claims in particular circumstances and with certain monetary limits, they are usually treated as general unsecured claims without any priority or substantiated status in connection with any distribution in bankruptcy.”
The above quote is from (Page 50) the “Pension Protection act of 2006” and essentially says (I’m summarizing) that particularly the unfunded pension liability of a company doesn’t take precedent over any other creditor. Be advised, these unfunded amounts are so significant in some circumstances, that the courts feel they have to make special dispensation in dealing with them, whether favorably or unfavorably.
David, to your point of fairness or legality or immorality, I question the fairness and moral obligation of ANY entity with a pension liability that “kicks it down the road” because they would rather spend money on other things, whether a business or a municipality.
What is coming to light here is the fiscal mismanagement of government, regardless of the level, Local to Federal. I don’t fault the unions, they fight for their members as they should. By the same token it is the responsibility of the government to efficiently use taxpayer monies to their best purpose, and it can be said they haven’t done that.
Mickey 13 about 11 years ago
Just to soak up some more space on this issue. President Obama set somewhat of a precedent in the G.M. bankruptcy by acting contrary to established law. He essentially gave the unions and their pensions a pass while stripping the bondholders and stockholders of any compensation. It seriously hurt many pension funds that held G.M. stock and bonds in their portfolios and many individual investors (large contingent of seniors) that held G.M. for retirement purposes. In effect, the UAW walked away with all the money.
Justice22 about 11 years ago
There is a need now just as there was 100 years ago. When executive pay has increased over 400% to less than 2% for workers pay in the past 14 years.
Stormrider2112 about 11 years ago
“Once unions were needed and a good thing…now they are putting companies out of business (twinkies) and destroying cities and states.”-Read about what Hostess did with the employee pension funds, then come back.