Labor’s Last Best Weapon: Lying

From the front flap of The Rise of the Working-Class Shareholder: Labor’s Last Best Weapon:

David Webber uses cases such as Safeway’s to shine a light on labor’s most potent remaining weapon: its multitrillion-dollar pension funds. Outmaneuvered at the bargaining table and under constant assault in Washington, state houses, and the courts, worker organizations are beginning to exercise muscle through markets. Shareholder activism has been used to divest from anti-labor companies, gun makers, and tobacco; diversify corporate boards; support Occupy Wall Street; force global warming onto the corporate agenda; create jobs; and challenge outlandish CEO pay. Webber argues that workers have found in labor’s capital a potent strategy against their exploiters. He explains the tactic’s surmountable difficulties even as he cautions that corporate interests are already working to deny labor’s access to this powerful and underused tool.

I can’t speak to the first seven chapters of the book but that last chapter (The Retirement “Crises” and the Future of Labor’s Capital) makes the case that the pension crisis is a fraud perpetrated on the public by “billionaire conservative activists Charles and David Koch and their organization Americans for Prosperity, as well as Enron billionaire John Arnold and his Laura and John Arnold Foundation (LJAF) and other allies [who] are determined to reform public pension funds in ways that would destroy labor’s shareholder activism.” (page 213).

To that claptrap of a chapter I can speak.

Centralized, defined-benefit plans are capable of engaging in shareholder activism in ways that are almost impossible to do with 401(k) plans or the like. (page 218)

Since most 401(k) investors are looking to maximize their returns without requiring investments to reflect a personal or pro-union agenda.

The underfunding of pensions remains hotly contested by economists, finance academics, and actuaries. Mere underfunding alone is not necessarily a problem – pensions are widely considered healthy if they are 80 percent funded. According to a recent study by the National Conference of Public Employee Retirement Systems, pensions nationwide have hit a 76 percent funding level, up from 74 percent post-financial crisis. (page 226)

This is true to the extent that the majority of people weighing in on the very real pension crisis would not know a commutation function from an ozone hole and their benighted stance is entirely a result of wishful thinking impervious to even the American Academy of Actuaries’ mythbusting.

In addition, most of the state and municipal sponsors of these purportedly underfunded public pension funds have seen little or no negative effects in the bond market, with the notable exception of Illinois and, to a lesser extent, New Jersey. (page 226)

Webber could have given a shout out to Kentucky too but maybe the bond market also has its reasons (i.e. wanting to sell bonds) for ignoring reality.

7 responses to this post.

  1. Posted by PS Drone on June 13, 2018 at 3:00 pm

    As a famous person once said — “What, me worry”?

    Reply

  2. Actuaries are among the most corrupt people in the world. But for ponzi scheme pensions, actuaries would have little to do.

    Reply

    • Posted by Tough Love on June 14, 2018 at 9:57 am

      OK, if excluding pensions, then what is the basis for your statement that …..”Actuaries are among the most corrupt people in the world” ?

      Reply

    • Posted by NJ2AZ on June 14, 2018 at 2:26 pm

      actuaries retained by governments maybe

      but i still think they pale in comparison to the bond rating whores

      Reply

      • Posted by Stanley on June 14, 2018 at 3:14 pm

        With fiat money, falsified interest rates and mountains of regulations that god and jesus couldn’t get their arms around–what can an accountant or actuary do with the mess? Oh yeah I forgot about the debts! Anyway, IMO there will be enough disappointment that everyone will get their fair share. In search of an honest Ponzi scheme! If you can’t trust a fixed fight, what can you trust?

        Reply

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