A recent article gives a view of some of the steps which have caused a public employees pension fund debacle in New Jersey. This very informative, well researched report, is written by a police officer. It seems to be lacking only one piece of essential information: were pension funds actually looted by New Jersey governors, or were employee pay-ins simply not matched, at the 8.5% rate stipulated by law when the funds were created? No matter the answer, it’s apparent that there are serious problems with the pension fund’s management.
I don’t love the US pension system. In my mind, it’s faulty in several essential ways:
- It withdraws almost unimaginably huge amounts of money from the economy and reach of the general public, and
- Hands those funds over to banks and other financial institutions – which use them as capital to invest in ways that further their own long-term ambitions (while incidentally, returning some profit back to investors in order to keep them happy and keep the capital rolling in).
- In the long run this has created a loop which dictates that the financial institutions and the major corporate beneficiaries they invest in, will become more powerful and wealthy every year. Others will become increasingly subject to the will of the institutions which hold their money and use it to buy more interest in the processes society requires to be viable (electrical grids, water delivery, oil and coal mining, transportation), thereby guaranteeing that the big guys’ wealth will increase any time a switch is thrown, a faucet is turned on, a vehicle is driven, a delivery of goods is made.
- Pensions have become a subtle mind-control tool, teaching participants to place faith – and sometimes great sums of money – in the hands of their employers, and suspend their cogent grasp of reality when, by various mechanisms, employers shaft participants out of the monies they thought were guaranteed to be their retirement funds – and then ask them to manage their disappointment, dismay, frustration and even rage . . . reasonably, peaceably and “maturely”. The shafting mechanisms are various: fire an employee months before s/he becomes pension eligible; raid pension funds and refuse to match the agreed-upon payments into the fund that employees pay in.
So much of social conditioning in the US is designed and mandated from the top to make average citizens believe that our interests are best served by doing what the wealthy and powerful say we should: spend prolifically on the products and services they manufacture, discard in fantastic quantities without regard for impact on our environment, labor for them without consideration for whether we are furthering or harming our own interests with the work we produce; entrust them with the safeguarding and investment of our retirement funds; believe they mean us well even when events and actions definitely demonstrate otherwise.
The pension system seems to be well and truly broken in the US. It is not serving employees in the ways it has promised to do. Maybe it’s not even viable. What if all the pension funds employees pay in, were – for example – used to fund cooperatively managed credit unions; to fund purchases of housing in need of rehab, which are refurbished and sold to the financial and community building benefit of neighborhood groups which purchase them; and to finance the stability and growth of small businesses, which are so important to communities everywhere. Going forward, we need to look into these possibilities.
A 1995 New York Times article discusses Whitman’s looting of NJ state pension funds.