Does the Holocaust Rule Apply
 

See the second half of this. You have moderates from both parties supporting a bill, and the more extreme types opposing it.

SS annecdote
 

(i) What do you mean by "net gain"? Gain over what??

(ii) What's the point? I think that would be true of any annuity. It's the nature of a fixed annuity.

Fringey, since you are the expert and my eyes glaze over when I hit the word "pension," could you explain to me why this story should not leave people troubled about their pensions? Are the facts unique to United?

Does the Holocaust Rule Apply
 

Wow. There's some pretty intellectual stuff on that page:

So They Are Limousine Liberals!
"Clinton Limousine Service & Rental"--entry in Limousine-directory.com

http://www.opinionjournal.com/best/

If bilmore can post comics . . .
 

Does the Holocaust Rule Apply
 

Didn't read it, but your characterization is right, for the moment. What has been clear from the beginning is that there were some people who would never be satisfied (i.e., those who are in the pockets of trial lawyers). The current state of things is (like maybe all things political) the result of consensus building. They traded a few R's (who at this point are only just threatening not to support it) to pick up a few Ds.

The hope is that Kyl (or whoever that guy is from Arizona) and his crowd won't thumb their noses at the party and the 20 year morass when it comes to a final vote. Believe me, its enough of a proxy for me that I will make a list of every person on both sides of the aisle who vote against a compromise that ultimately passes.

My impressions of this stuff have been formed over time though. So when it was basically Rs vs. Ds, there were a few Ds who sorta stood out as being at least somewhat reasonable about negotiating and all.

Anyway, that's all I'm sayin. I get a chance to throw some money against Durbin, I'm reachin deep.

I don't think it was correct to allow United to continue as a business but dump its pensions on the PBGC. I think dumping pensions on the PBGC should be reserved for companies actually going all the way bankrupt, not part of a reorg. So, yes, it concerns me

Outside of the United situation, in the more normal situation a company actually goes all the way bankrupt. Given that the alternative is that the people never have had a pension at all, I am not hugely unduly upset because it is primarily the relatively large pensions that get cut. From the article: "The Pension Benefit Guaranty Corp['s] . . . rules allow a maximum benefit of $45,000 a year for those who retire at age 65." A DB pension benefit can't be more than, I think, about $170,000 a year. Yes, I realize that there's a big difference between $45k and $170k, but it's better than the nothing they would get in some other circumstances -- you can't get blood from a stone, and if a company is for real bankrupt, having that $45k guaranteed is better than nothing. Note that these are not plans that the employees contribute to, and that people can't get a bigger pension than what they were earning -- so people with the big pensions were making at a minimum the amount they were getting from the plan.

I guess, my question kind of is, would you rather that the employees had not had this plan at all?

I would not have a problem with a law that required that all executives would have to give up their supplemental pensions, and that money put into the qualified (broad-based) plans, before it could go to the PBGC. Unfortunately I think that would have to be prospective only.

What do you think the solution is? Ignoring the United reorg situation, and sticking to the basic rule that only companies which actually go out of business are dumping the plans on the PBGC, and keeping in mind that more companies go out of business when the market sucks -- so the value of the pension trust may be falling as the company becomes less and less able to meet expenses. I guess it could speed up the bankruptcy filing . . .

How about doing more to ensure that all companies are properly funding their pension plans?

Does the Holocaust Rule Apply
 

I'll say it . . . I'm not outraged by the description.

Jesus, Ty. What are you, 10 years old? Who wouldn't agree with that statement?

How do we do that? Keeping in mind that sometimes, the market falls, and that has a big fat impact on pension trusts -- a plan can go from overfunded to quite underfunded in a day. Also, recall that companies get a tax deduction when they put money in -- so the temptation in years in which the company does well is to massively overfund so as to avoid tax liability. It's my understanding that people were quite outraged about companies doing THAT at some point ("my understanding" because this happened I think before I finished college -- wasn't in the industry yet), so Congress limited the ability of companies to sock it away in up years.

We could pay people to enforce the law, like we do with many other laws.

Is the law, as written, not being enforced? I was not aware of that.

Ty, I am seriously considering revoking your righteous outrage privileges if you aren't going to have anything helpful or even sensible to say about this. You can say, "shit, that sucks" -- but nothing more critical than that -- unless you come up with more than platitudes.

Look, either what United did up to its bankruptcy was OK under law, in which case we need to change the law to require companies to fund their pensions so that people get the benefits they were promised, or what United did was not OK, in which case we need to enforce those rules better. Is it not that simple?

So you are not upset about the pension system in general, but just about United?

Damn activist bankruptcy judges. I'm actually not sure what the standard is for dumping a plan on the PBGC, but I don't think it generally happens in a reorg/bailout.

There's no way to guarantee full funding in any absolute way -- even if you want to say that companies that can't keep trusts fully funded even when the market falls have to liquidate, and the pension fund is the first creditor to get anything, there may be a shortfall in the fund post-liquidation. Plus that would seem to create other problems. It's already pretty high priority, I think. Should it have higher or lower priority than, say, payroll? Secured debt? Unpaid payroll taxes? Unpaid other taxes?

free trade
 

We seem to all agree on tariffs. Government subsidies are bad but I think they screw the country that provides them as much as it screws everyone else. The country that provides them taxes their own people, so the tax payer of the subsidizing country is paying so people all around the world can get cheaper products.

However a treaty that cuts tariffs is not defective because it does not also cut subsidies. A treaty that cuts only tariffs is fine. Everyone is better off. That is the way GATT and then the WTO works. They first just starting cutting tariffs. Then later they moved on to other stuff like subsidies and other "Non-tariff Barriers. So a treaty that goes after tariffs is good. So is a treaty that goes after subsidies. One that goes after both is better. However, they don't need to be connected to be good. Boeing is complaining about Airbus because the subsidies violate the WTO rules. We already have a treaty in that area. However, thirty years ago the GATT (the precurser to the WTO) did not addres subsidies, so Boeing would have nothing to complain about. Before these rules European government subsidized the hell out of everything and yet nonsubsidized American companys still dominated the world market. Should the original GATT rules not have been passed because they did not include subsidy cuts. Hell no. We would have never gotten anywhere. The original GATT rules that just cut tariffs were good on their own even though they did not address subsidies. Now that we have international rules on subsidies we are even better off.

The next issue is labour and environmental laws. Free trade treaties that don't address these issues are still beneficial to everyone involved. The idea of an unfair advantage is just a bogus issue because you will never have a level playing field. If that is a requirement for a treaty then you will never pass one (which is exactly what labor - look I spelled it correctly - wants). Think about the US. We have internal free trade between the states. However, environmental laws are stricter in California and we have tougher labor laws - including a higher minimum wage. So does that mean that the California should impose a tariff on all goods coming from Alabama because they have a lower taxes, less strict environmental laws, and a lower minimum wage. etc. No. Tariffs and such would hurt everyone involved. Would it be nice if Alabama had better labor laws and environmental laws - yes - but just because they don't does not mean we should sacrifice free trade.

A free trade agreement between the US and the Caribean benefits everyone. If we cut tariffs and subsidies everyone is better off. Even if that is all the treaty addresses. It would be nice to include environmental standards and labor rules but it is hard to now where to draw the line. The central american countrys could never have our labor laws or environmental laws. They can't afford them. If they had our minimum wage no one would work. If they imposed our air polution standards every factory and car would have to be shut down. So no matter what rules we impose they are going to have an "advantage" that the labor and environmental groups can point to.

The CAFTA cuts subsidies and tariffs between our countrys. This is a good thing. It would be nice to have more but you can never get everything you want. Any step towards free trade is the step in the right direction. Any argument against CAFTA is really an argument against free trade. All the countrys involved will be better off there is just special interest groups that are going to be hurt so they are going to try and kill it. These same objections have been brought up in every free trade treaty. Every GATT round, NAFTA, the European Free Trade Area (precurser to EEC and EU), ASEAN, the labor groups and enviornmental groups have complained citing labor rules and the environment. But every one of these treatys has made all the member states invovled better off.

CAFTA is going to make every signatory state better off. Some individual groups will get hurt but that is the way the free enterprize system works. If you try and make it so no one gets hurt, you would have to shut down the system.