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      Peter was the kindest man I ever met. I moved into his old house one winter in the early nineties. Rent was $235/month, there was a shared kitchen and showers and 7 tenants. On the ground floor lived the landlord—Peter, and his Japanese wife. I lived there three years. They were thin, cold years for […]
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What I want to hear from Hillary if she decides to run

1.) That it is immoral for the finance industry or any industry to engage in exploitative profit mining of Americans.

2.) That the definition of success is more than how much money you make. That there is intrinsic value to many occupations that has nothing to do with the ability to exploit one’s neighbors or accumulating a hoard of cash that doesn’t serve the public good.

3.) Infrastructure in the United States requires immediate attention. That means broadband, highways and bridges, and mass transit.

4.) That retirement for most Americans is going to be a crisis situation and she plans to address the 401K ponzi scheme with expanded Social Security.

5.) That we don’t know at what temperature the earth will find its melting point so it is important to evolve away from fossil fuels.

6.) That it is more important to “Have courage and be kind” than invade other countries and cruelly kick people when they’re down.

7.) That truly good Christians do not delight in the misfortunes of others, are not proud, and don’t sound like clanging gongs when they insist on their “religious freedoms” at the expense of others.

Add what you want to hear in the comments below.

Saturday: Power Wash

It’s a nice day, the kid is available, why not power wash the house? That’s what’s on the menu today. I’m headed off to the rental place to pick the washer up. Fun, fun.

In the meantime, remember a couple weeks ago when I wrote that Pfizer was a poster child for The Strategy of No Strategy and that the pension fund would start looking like a target soon?

Gettin’ closer. Pfizer announced on Thursday that they were ending their pension plan. Yep, everyone will now be transitioned to a 401K. Isn’t that special? It looks like people with pensions in companies that were acquired may be safe (please, please, please) but, you know, who knows at this point. The change in the pension plan will affect people who will be turning 55 in about the year 2018. Unfortunately, I know a number of Pfizer employees who may be affected by that and can only imagine how thrilled they are at this news after the cruel amount of stress they’ve been through in the past 4 years.

So, to recap, for scientists living in America but not some parts of Europe:

  • Pharmageddon continues at a steady pace, throwing many, many scientists out of work, perhaps permanently.
  • The only jobs we can get pay a LOT less. You don’t even want to know.
  • Benefits are few to non-existent.
  • Job-hopping and instability is now “expected”. You may have to leave your family behind. Better yet, don’t have a family.
  • You might end up working for a CRO where your input in projects is restricted to task oriented, boring procedures all day, like widget making. No more creativity or learning will be necessary after all those hard science courses.
  • You probably won’t be getting that pension you were counting on after 2 decades of work.
  • If you want health insurance for yourself and your family, you’ll have to pay through the nose for it from your vastly reduced salary at a CRO.
  • Your 401K is tanking- again. But THIS time, because you are out of work, there won’t be any build-back.
  • You are slowly being turned into an “entrepreneur” without any of the benefits. No group insurance rates, no labor protections, no reasonable business loans, and the costs of starting your own pharma, with all of it’s associated risks, are astronomical and suicidal. If you haven’t asked yourself whether all of the entrepreneur talk politicians keep touting will eventually lead to abuse and exploitation of workers without protections, now’s the time to think it over.
  • And finally, the morons in Congress whose skinny necks you would like to wring right now are blithely and capriciously talking about significantly reducing the only retirement option left to you- Social Security. (BTW, see Charles Pierce’s destruction of David Brooks this week. Very satisfying. I strongly suggest David Brooks stay out of central New Jersey because there are a lot of unemployed cancer researchers who he finds indistinguishable from Maury Povitch trailer trash who would like to rip the face off of people like him- metaphorically, of course.)

You know those elected people in Washington? Yeah, I hate those people. I knew the bastards would be putting the screws to us before the election to make people panic and agree to anything. But I never thought they could be this clueless, savage or viciously cruel. I’m not afraid but I am extremely angry at both parties. And, Yes, I know one party is much worse than the other but it hardly makes a difference which party is the worst when both have now crossed the threshold to the dark side. That leaves the vast majority of us without representation but still paying taxes, unemployed or not. And taxation without representation fueled the last revolution.

We are living in a kleptocracy and Democrats did not try hard enough to keep it from happening. Everything you’ve ever worked for your entire life can be stolen from you piece by piece. Your career, your patents, your house, your pensions, your retirement nest egg and all of those extra taxes you paid into a Social Security plan. Promises can be broken, you could get screwed and end up dying poor and no one is held accountable.

Yep, what Washington, DC needs is a good power wash, on the inside.

P.S.- Working people who vote Republican because of social issues should have their heads examined.

‘gits
****************************************
One more thing: according to a new book by James Mann, Hillary Clinton and Timothy Geithner didn’t get along at the beginning of the Obama administration. Geithner was muscling Clinton aside when it came to dealing with China. It seems that Geithner wanted the Treasury department to be in charge of foreign policy with China and to concentrate solely on economics. Clinton wanted to address more than economic matters and wasn’t going to yield on China. There was a standoff and Clinton won. But she was overruled on the issue of ambassador appointments. Why is that significant? It’s because the ambassador that Obama appointed to China is none other than former Republican presidential candidate and wealthy chemical company scion Jon Huntsman. Yep, read it and weep, labrats. The guy that Obama appointed to China at a time when our jobs were hemorrhaging there was none other than a Republican chemical company guy who speaks Mandarin.

No wonder this administration doesn’t give a royal F#%* about the destruction of our American research industry. It was the plan all along. Right, Mr. Geithner? You guys did nothing to slow things down. In fact, you went out of your way to make it easier for our companies to relocate to Shanghai.

So, let’s review: the people who really didn’t get along with Tim Geithner were all women. They were Sheila Bair, Elizabeth Warren, Christina Romer and Hillary Clinton. I’m sure there are others but any woman who stands up to Geithner and disagrees with him is ok by me. All of these women proposed policies that were ignored by Geithner and the White House but would later turn out to be right. In every case, Geithner had the upper hand except in his interactions with Hillary, where she had a victory on overall policy with China but didn’t get to pick the ambassadors.

And we’re still not at war with Iran.

It’s amazing how so many Democratic party activists got it so wrong. I wonder how that happened, given that they supposedly do not fall for political mind tricks and propaganda…

How the Social Security Commission will kill the American Economy

According to the New York Times, small investors are pulling their money out of the stock market.  Yep, seems like it’s a bit too risky for the boomer generation.  What with all of their retirement savings opportunities drying up:

To be sure, a lot of money is still flowing into the stock market from small investors, pension funds and other big institutional investors. But ordinary investors are reallocating their 401(k) retirement plans, according to Hewitt Associates, a consulting firm that tracks pension plans.

Until two years ago, 70 percent of the money in 401(k) accounts it tracks was invested in stock funds; that proportion fell to 49 percent by the start of 2009 as people rebalanced their portfolios toward bond investments following the financial crisis in the fall of 2008. It is now back at 57 percent, but almost all of that can be attributed to the rising price of stocks in recent years. People are still staying with bonds.

Another force at work is the aging of the baby-boomer generation. As they approach retirement, Americans are shifting some of their investments away from stocks to provide regular guaranteed income for the years when they are no longer working.

And the flight from stocks may also be driven by households that are no longer able to tap into home equity for cash and may simply need the money to pay for ordinary expenses.

On Friday, Fidelity Investments reported that a record number of people took so-called hardship withdrawals from their retirement accounts in the second quarter. These are early withdrawals intended to pay for needs like medical expenses.

According to the Investment Company Institute, which surveys 4,000 households annually, the appetite for stock market risk among American investors of all ages has been declining steadily since it peaked around 2001, and the change is most pronounced in the under-35 age group.

Under 35’s?  Honey, you ain’t seen nothing yet if the current proposals to raise the retirement age and cut Social Security benefits gets passed.  Contrary to the expectations of the corporate retirement fund managers out there, if social security gets more difficult to collect, my whole investment strategy is going to undergo a radical readjustment and not in Wall Street’s favor.

Suddenly, I will have to start a new savings plan to cover the costs of getting older when I can no longer bop around in the lab and up and down the stairs to the autoclave.  That is, if I even get the privilege of retiring from a job, which at this point looks less and less likely.  No, if social security becomes a distant dream, that segment of my retiremement scheme will have to be made up somehow.  And I WON’T be sticking my money in some risky stock market fund where there is no guarantee that my dollar of savings won’t be a dollar of withdrawal down the road.

Cutting Social Security means no more vacations, no more furniture, no more gadgets.  It means downsizing, selling the modest townhouse ASAP and finding some cheap little condo without high maintenance fees.  It means putting the money in the safest, least sexy place possible and just sitting on it.  For decades.  Seriously, life will become a LOT simpler.  After all, I have a kid I need to put through college and something’s got to give. I’ve never been a gambler and only participate in the 401K program under duress.  Give me a nice guaranteed pension and I’d be happy.  I’d rather be secure than rich.  Maybe that’s just me but I could be happy in Denmark where people can focus on living their lives and less on acquiring stuff.

Sometimes, I think that the people who are so hell bent on dismantling social security haven’t thought through this problem sufficiently.  They think we are so driven to outdo the Joneses that we’ll keep shoveling our hard earned paychecks into high yield investments.  Maybe some irrationally exuberant people will but the NYTimes article suggests that many of us have been too burnt to be careless with fire.  The outcome they are expecting seems to deny that the American worker has structured his whole life around social security and when it becomes unattainable, that security has to be compensated in other ways.  I don’t think current recipients should get too comfortable either.  Once the social pact is gone, the overstrapped still employed are going to start resenting the amount of money that goes into a program they can never benefit from.  Consider too that some companies are cutting out pensions entirely in the near future even though they provide them for current employees.  Future wages are already going down.  There is just not enough money to pay for everyday living and kids and saving for retirement and saving for some older person’s retirement.  Right now, it’s not so much of an issue but take away that piece of the retirement pie and there *will* be consequences.  The US economy is dependent in part on social security, which is why it was developed in the first place.  Seniors without incomes spend no money.  So, to save up for those senior years, money will have to be sequestered and some of us don’t have a lot of time to do it.

What’s really shocking about the “Catfood Commission” is that it’s being done by Democrats.  Even if the recommendations were acceptable, which they aren’t, this is not the time to be proposing them.  It smacks of the worst kind of politics when a respected program that everyone loves is held hostage for electoral gain.  Democrats are doing this.  It’s like taking the baby out of the basinet and holding it over a pit of Republican crocodiles, daring us to vote against Democrats.  It makes me LESS inclined to vote for the Democrats because if it happens this year, they’re going to keep doing it and one of these years, that baby’s going to fall or be so emaciated that it will be worthless, sort of like what happened to reproductive rights.  If Democrats want my help this year, they will dismantle the commission before November, recognizing that the economy can’t handle any talk of cutting benefits or extending the retirement age.

So, go ahead, bipartisan commission, make it harder for me to retire.  Hell, let’s be honest, make it *impossible* for me to retire.  And I will suck all of my funds out of the free market system.  I’ll stick to the bare necessities, continue to buy used cars, will forgo my next laptop, stop buying nice clothes and, like this year, turn down the family cruise this winter.  My bank account will become fat but the economy will stagnate as people all over the country remember what happened to people in the Roaring Twenties who sunk all of their retirement money in the stock market and risky investments.  My bank account and CD’s may make squat in interest but as long as they’re guaranteed by the government, I’ll live with it.

Until some new Idiot in Charge proposes a bipartisan committee to study the FDIC.

And now for something radical and extreme: Get rid of the 401K

Last weekend, I got polled.  Er, by Harris, the polling company.  I’ve been getting a lot of that lately.  Maybe being a middle class suburbanite independent Democrat-in-exile in NJ means I have finally arrived but it’s unlikely I fit their notions of the typical polling subject.  Well, not after this poll anyway.

The first question was about my attitudes towards the military.  Would I suggest the military to a young person?  As it happens, I’m a military brat, my family has a long tradition of joining up and I have current family members who are career military.  So, while a military career is not for everyone and it’s certainly more dangerous than it was 10 years ago, I wouldn’t rule it out for someone who doesn’t know what they want to do as a career.

That first answer seemed to have put me, a lifelong liberal, on the Tea Party branch of the decision tree.  Many of the other questions after that point were kind of insulting to the intelligence.  For instance, is someone arrested for a crime entitled to speak to an attorney?  Jeez, all those years of Dragnet should have sunk in by now.  Of course they are.  What about if the crime is serious or particularly heinous?  Um, yeah, that’s when you are most in need of one to defend you.  What about if it’s a TERRORIST???  Do they get to speak to an attorney on the government’s dime if they are accused of TERRORISM?  Well, Timothy McVeigh went through the process, was represented, had a fair trial and got what was coming to him.  I think the system can work.  Let’s not start making exceptions for alleged terrorists.

Anyway, that wasn’t the section that tripped my trigger.  No, the one that got to me was about 401Ks.  I don’t know what our brilliant braintrusts in the Democratic party are up to but if they are the ones who are suggesting that it would be a nifty keen idea to expand the 401K system, we might as well all just get used to an America whose salad days are over.  The poll question was something like, “Would you approve or disapprove of expanding the 401k system to workers whose employers would not be required to make a matching contribution?”

That’s a weird question for so many reasons.  The first one is, if you allow *some* employers to opt out of making contributions, wouldn’t you just give the rest of them justification for also opting out?  And what about the Enron-esque employers who match with stock?  But I digress.  Because the real employment trend is to make everyone contractors, freeing the corporation from actually employing and being responsible for the lives of the people who work for them.  So, maybe that’s where this question is coming from.  Say you are now a contractor, forced to go through some rent collecting middle man who acts as an intermediary between the corporate entity and your paycheck.  Now YOU are responsible for your retirement accounts, not the corporate entity.  So, does the old corporation have to match your 401k contributions?  Something to think about as the traditional bonds between employer and employee are redefined.

But that’s not why the 401K needs to go.  Now, I am not a financial wizard.  Far from it.  If you want that kind of expertise, check out Dakinikat’s posts, or Baseline Scenario or Naked Capitalism.  No, I am just Jane Bagodonuts from the burbs.  Nevertheless, blogging allows me to expound on any subject I like or don’t like.  And I have particular dislike for my 401k, may it grow and prosper.  Here are my reasons from a liberal perspective:

1.) It’s a Ponzi scheme.  Yep.  Unlike Social Security, which we are all required to participate in and which has actuarial expertise built into it and is a fall back retirement insurance policy, the 401k is for suckers.  It relies on lots of people dumping their investment dollars into pumping up the price of stocks.  When the baby boom generation starts to retire in earnest, it’s going to want to cash in, leaving us with funds with diminishing value.  UNLESS we get some other poor schmos who don’t have employer contributions to send their money to our 401Ks in return.

2.) Wall Street thinks the money in your 401K is there for them to use as gambling chips in some global game of roulette.   We saw this happen in 2008 when the subprime mortgage market collapsed but it’s not limited to the bond market.  Oh, sure, the stock market is more highly regulated but when the bottom fell out of the mezzanine subprime tranche CDO’s it took everything else with it.  Besides, who has time to monitor their 401K’s at every minute of the day?  Most of us follow the Ron Popeill method of financial investment: set it and forget it. Turning a bunch of naive amateurs into financial planners of their old age lifestyles has turned into a windfall for the predators on Wall Street.  What we don’t know can hurt us and we don’t know what they’re up to.

3.) Wall Street and the financial sector in general is like the Wild West right now.  Until there is more oversight and regulation, you just can’t trust them.  The constant infusion of cash to these testosterone poisoned, self centered, highly overrated gamblers who manage our money only encourages more risk taking and future financial collapses.

4.) 401Ks lead to employees betting against themselves.  The shareholder is the emperor.  The money we put into these funds increase when employers see staff as unattractive drags on the bottom line.  I’ve always preferred the word Personnel to Human Resources because it acknowledges that there are persons actually doing the work and that we are not just variable costs to be minimized for the benefit of the bonus class.  Nevertheless, when corporations cut staff, the stock goes up and everyone starts dreaming of their new retirement condo in Mexico.  That is, iff they have the privilege of actually retiring.

5.) 401ks lead to less innovation.  Well, if you have to cut staff to assuage the quarterly panic attacks of the shareholders, you don’t have people innovating for you.  It’s true.  People who no longer work for you are not required to do your thinking for you.  The people who are left are too busy preparing for their own “displacement” to do any real work.

6.) 401ks invite the bonus class to invest in emerging markets, not the American market.  They’re always chasing profits.  For themselves.  For you?  Ehhhhh, not so much.  Shareholders, that is the BIG shareholders, not you and me, have to be satisfied so the money must go somewhere.  Why not India?  Oh, sure, it means that the capital will be invested in a place that means more Americans will lose their jobs and potential American entrepreneurs will go begging for startup money. But that’s the nature of capitalism.  Suck it up.

5.) In order to get a break on taxes, which in my case are pretty ugly, you can’t take the money out until you retire.  You can borrow from your 401K but then, you have to make sure you stay employed so you can pay yourself back.  It’s not very liquid and most of us can’t afford to fund multiple retirement/savings/college funds.  In emergencies, it’s useless.

Now, I am glad that I have a 401K, for the short term forseeable future, and that my employer is rather generous in funding it.  But it’s all on paper as far as I’m concerned.  By the time I am ready to retire, it might be worthless.  Getting rid of them wouldn’t exclude investing in the stock market.  It would just not institutionalize it and make it an all-but-mandatory retirement strategy.  Maybe the financial sector would be a little bit more attentive to our needs if they didn’t have a steady stream of easy money flowing into their gargantuan gullets.  Maybe customer service would improve.  There might be incentives offered to attract your business.  Maybe the risky gambling addiction behavior would cease.

I dunno.  I can only speculate with my money averse mind. But the more I hear about the financial meltdown, the more I keep coming back to the 401K “instrument” as the root of all evil.

Get

Rid

Of

It

Eric Massa

I met Eric Massa in Las Vegas in 2006 at the first YearlyKos convention.  He was milling around the lobby of the Riviera, trying to round up people to walk down the street to the tackiest bar you’ve ever seen for a drink.  I thought he was buying.  As we sat in the faux fur covered lounge pit groups around a blazing fire, in a scene that was more like apres ski cross pollinated with Hooters, Eric Massa delivered a riveting stump speech.  He was an energetic, charismatic, full monty, unapologetic politician with principles.  At the end of it, he asked for twenty bucks from all of the rag tag followers hoping to get a free beer from him.  I ponied up my share, bought my own drink and thought it was money well spent.

I wasn’t at all surprised when he won his district in 2008.  But I was very surprised that there are allegations of harrassment against him.  Call me a cockeyed, pollyannaish type but I’m not buying it.  In fact, I am not the kind of person who thinks everyone has a heart of incorruptible gold.  Most people have something they would prefer to hide from the world.  There’s  a Stranger lurking in the dark recesses of every human soul. But this ethics charge doesn’t quite ring true.  All of the breathless reports from  Politico and WaPo sound more like tabloid journalism.  It’s all extremely vague.  Someone said something about something else and they were brought to the ethics committee in chains and forced under duress to suggest that there was something going on.  Well, what can you expect from Politico?  You know where they stand.  They’re the Fox news of what appears to be legitimate political journalism.  They specialize in rumor, innuendo and wild speculation.

I can do wild speculation too.  So, here’s my best guess as to why Eric Massa is retiring.  He bucked his leadership on the health care reform bill.  He held out for single payer.  Being a Navy vet, he probably sees the benefits to a single payer system. (We should at least explore the idea)  And now he is being made a poster child for what happens to you if you cross Steny Hoyer.  Maybe they told him he wouldn’t get any help from the home team in his re-election bid this fall.  Massa comes from a swing district.  Just to put the cherry on the sundae, Hoyer follows up on Massa’s announcement by idly speculating on the ethics charges.  It *almost* sounds like he’s instigating whoever is making them to go to the ethics committee and report Massa.  Now, why would you knife one of your own like that?  Presumably, you still need Massa’s votes for upcoming bills, at least until he actually goes back to NY.  Maybe it’s because Massa isn’t expected to cooperate on much of anything Hoyer wants, to which I say, good for Massa.

But it must be putting a chill on anyone else who doesn’t want to play the establishment political game.  Step out of line and not only will we make your re-election difficult, we’ll ruin your reputation and your family life.  Nice.

Well, I’ll just leave it at that.  What more is there to say?  I hope that Massa hasn’t suffered a relapse of non-Hodgkin’s lymphoma and I really hope that the ethics charges are a whole lot of sound an fury signifying nothing.  But I wouldn’t be at all surprised to see  Congresscritters with a lot less determination than Massa cave to the demands of the House leadership on health care reform.  Let’s face it, most of them are craven, don’t-rock-the-boat, let’s-all-get-along, student council types anyway.  Even the bravest among them still want to be loved by their friends.  They’ll cave.

Good luck, Eric.  We’ll miss you.