Thanks for this. I know it was tough to write but someone must speak the truth. Anyone with a trace of humanity wants to do something to stop unfolding tragedies, but sometimes we are as helpless in the face of human disasters as when we face the forces of nature -- floods, earthquakes, drought.
I'm in complete agreement with the thrust of this story, that the behavior of those who ran the company into the ground was unconscionable. I wish more people could grasp the difference between "equity" capitalists and "venture" capitalists but unfortunately the distinction is hard for non-financial types to digest.
But it is misleading to suggest, as Hartmann does here, that tax money is being misappropriated. PBGC is, in fact, overseen by government, but it is not funded by taxes. Like FDIC, PBGC is an insurance scheme funded by the entities being insured. In this case funding is by all those defined benefits pension plans themselves. Like most insurance funds, there is a fairly lengthy time span between when premiums are collected and payouts are required (which is VERY long in the case of retirement plans, plus payouts are incremental, spread over several years) so the risk is spread wide).
Unrelated to this odious practice is one I heard about a few years ago, funding executive compensation packages by the proceeds of life insurance policies on employees about which the insured individuals know nothing. The company pays the premiums and becomes the beneficiary and eventually all will be paid since everybody eventually dies. link to online.wsj.com
I don't know how widespread this practice was or if it still possible. But it seems for every regulation there is a way around it for those with enough influence.
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Thanks for this. I know it was tough to write but someone must speak the truth. Anyone with a trace of humanity wants to do something to stop unfolding tragedies, but sometimes we are as helpless in the face of human disasters as when we face the forces of nature -- floods, earthquakes, drought.
Naomi Wolf listed ten steps, too, several years ago.
I can see plenty of overlap.
link to guardian.co.uk
This is what your post inspired.
link to hootsnewplace.blogspot.com
I'm in complete agreement with the thrust of this story, that the behavior of those who ran the company into the ground was unconscionable. I wish more people could grasp the difference between "equity" capitalists and "venture" capitalists but unfortunately the distinction is hard for non-financial types to digest.
But it is misleading to suggest, as Hartmann does here, that tax money is being misappropriated. PBGC is, in fact, overseen by government, but it is not funded by taxes. Like FDIC, PBGC is an insurance scheme funded by the entities being insured. In this case funding is by all those defined benefits pension plans themselves. Like most insurance funds, there is a fairly lengthy time span between when premiums are collected and payouts are required (which is VERY long in the case of retirement plans, plus payouts are incremental, spread over several years) so the risk is spread wide).
Unrelated to this odious practice is one I heard about a few years ago, funding executive compensation packages by the proceeds of life insurance policies on employees about which the insured individuals know nothing. The company pays the premiums and becomes the beneficiary and eventually all will be paid since everybody eventually dies.
link to online.wsj.com
I don't know how widespread this practice was or if it still possible. But it seems for every regulation there is a way around it for those with enough influence.