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August 4, 2002
Susan Davis
Fat Americans
August 3, 2002
David Krieger
Nuclear
Apartheid
Gilad Atzmon
The End
of Innocence
Gavin Keeney
Everybody's
a Critic
Alexander Cockburn
Can the Times' Jeff Gerth
Save Dick Cheney?
August 2, 2002
Ralph Nader
The Labor
Party
Chris Floyd
Moral Maze:
Bankruptcy Made Easy
Jeremy Scahill
Saddam,
Chemical Weapons and Donald Rumsfeld
Jeffrey St. Clair
Dark Deeds in the Black Hills:
Daschle Dooms the
Sacred Land of the Sioux
August 1, 2002
Steven Higgs
Activists
Under Siege
Anthony Gancarski
Draft
Picks:
Staffing the Latest War
Zeynep Toufe
Invisible
Children: AIDS,
Africa and Selective Vision
Alexander Cockburn
Drivel and Squawk:
Angelina Jolie, the NYT
and the Attack on McKinney
July 31, 2002
Amelia Peltz
Inside
Ramallah:
How Can the World Witness Such Suffering and Do Nothing?
M. Shahid Alam
The Academic
Boycott of Israel
Bernard Weiner
20 Things
We've Learned Since 9/11
Philip Cryan
Discourse
and War in Colombia
Neve Gordon
A Feast
of Bombs:
Sharon's Endgame for Palestine
July 30, 2002
Pierre Tristam
Branding September 11
PS Burton
Financial
Journalism:
A Very Small Cog
Tom Stephens
Hypocrites in the House:
Fast Track After Midnight
Dave Marsh
Censorship
Goes Global
July 29, 2002
Linda Belanger
Why Do They Do It?
Alfredo Castro
Colombia's
Disappeared
Anne Brodsky
Inside Pakistan and
Afghanistan with RAWA
Andrew George
The Fires
of Summer:
Don't Blame the Greens
David Vest
A Blind Mule and
a Box of Medals
July 28, 2002
Bob Geary
Our Dinner
with Fidel Castro
July 27, 2002
Ian Daoust
The New
Mahler, Seattle Style
Gavin Keeney
Zizek
and Lenin
Ralph Nader
Citigroup
Heal Thyself
M. Shahid Alam
American
Presidents (Poem)
Mokhiber / Weissman
Push Back: Women Take
on the Corporate Beasts
Resources:
100s of Links
About 9/11
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and Osama bin Laden
Whiteout:
CIA, Drugs & the
Press
by Alexander
Cockburn
and Jeffrey St. Clair
The Memphis Blues Again:
Six Decades of Memphis Music Photographs
Photos by Ernest Withers
Text by Daniel Wolff
The New Intifada:
Resisting Israel's Apartheid
Edited by Roane Carey
A Pocket Guide to
Environmental Bad Guys
by James Ridgeway
and Jeffrey St. Clair
The
Phoenix Program
by Douglas Valentine
Al Gore:
A User's Manual
by Cockburn
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Reviews of Gore:
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August
5, 2002
American
Journal
Foxes and Pension Funds
"Shut
Up and Delete This E-mail"
by Alexander Cockburn
Lurking in back of the current uproar about corporate
chicanery is an argument about the management and disposition
of society's acccumulated wealth.
Read first some striking remarks about
the role of pension funds by the former British Labor minister,
Tony Benn, in his 1979 book, Arguments for Socialism. "The
financial institutions do not necessarily use the huge sums put
at their disposal in a manner compatible with the common interest.
This is one area where there will have to be change These savings
belong to the workers, they are their own deferred earnings.
Workers want them not only as income when they retire, but while
they are at work, and so to guarantee that they will retire in
a buoyant economy."
Of course we've been listening over the
last few months to many tragic stories of workers watching helplessly
as their prospective pensions, stored in some 401(k) have shrivelled
overnight, while senior management in a company like Enron cashed
in their chips while the going was good. As always the apex predators
survive, while the small fry perish. At the end of 2000 Enron's
401(k) had $2.1 billion in assets, but a year later had lost
94 per cent of its value.
Why didn't Bush try to bail out Enron, just as Clinton and Rubin
bailed out Long Term Capital management. Long Term Capital Management,
you'll recall, was a hedge fund that collapsed in 1998, victim
of staggering wrong-way bets by its executives. Banks, even central
banks, hedging their positions through LTCM stood to lose vast
sums.
The Federal Reserve intervened, persuading
14 banks to put up $3.6 billion as part of the bail-out.
Now, when Enron went belly-up, the losses
were vast, perhaps as much as $60 billion, but the losses were
widely distributed among a lot of different institutions.
The company's two largest creditors, Citi and JPMorgan/Chase,
well aware of the dodgy state of the company, had packaged up
their Enron debt as "credit derivatives" and sold them
on to pension funds. So Enron's crash was not going to bring
down the big banks, or even damage their profits (which have
remained good).
But if the big banks had stood to loose
out big time then it would have been a different story. The Senate
hearings last week confirmed that the banks knew that there were
big problems with both Enron and WorldCom - in fact they helped
devise the "prepays" (loans disguised as trades) and
other devices which concealed how highly leveraged the companies
were. The recent hearings in Congress have yielded some remarkable
material. Here's an internal e-mail exchange at Chase: One executive
wrote simply "$5 bn in prepays!!!!!!!!", the other
replied "Shut up and delete this e-mail", an exchange
later variously described as "misstatements by young bankers"
or simply as jokes.
These issues won't go away because the
big pension funds are taking the banks to court. Calpers and
Calstrs (teachers) and Lacera (Los Angeles County Employees Retirment
Association) have taken action against the large banks, including
Citi and Chase, which underwrote Enron and WorldCom bonds, even
though they knew the dreadful state of their finances.
Which brings us back to those basic arguments
about how the accumulation of wealth should properly managed.
This summer sees the publication of Robin Blackburn's remarkable
"Banking on Death" (Verso) which sets out in fascinating
detail not only the scandalous misapplication of savings by the
corporate giants, but also pioneering attempts to "socialize"
accumulation by visionaries such as the German-born Rudolf Meidner,
in Sweden.
Blackburn reminds us that back in the
mid-1970s Peter Drucker, philosopher of management, published
The Unseen Revolution, which focussed on the growing weight of
pension funds and their role in economic development.
In Drucker's view, Blackburn writes,
"pension fund collectivism offered an alternative to both
state socialism and free market individualism." For as Drucker
puts it, "The pension fund movement is not 'individualism'
a la Herbert Hoover. Pension funds are collectives. And the agents
are other collectives, the large employing organizations. But
they are 'non-government' and, in that sense, 'private'. They
offer one example of the efficacy of using private non government
institutions of our 'society of organizations' for the formulation
and achievement of social goals and the satisfaction of human
needs."
Needless to say, pension fund managers
tend to be fixated on shareholder value (however meretricious,
as with Enron and other book-fixers) with scant regard for social
goals. But Drucker's basic point remains valid.
In the coming months, amid public indignation,
there may be a few modest reforms seeking to curb accounting
"excesses" and kindred shenanigans. Then, when the
dust settles, the foxes on Wall Street will be attacking the
chicken coop again, trying to capture all the money going into
Social Security.
Now's the time to outmaneuver the foxes
by taking the debate over pensions and pension fund management
to a higher level, recognizing that with an aging population
this is indeed one of the crucial discussions about this society's
priorities and direction in the new century.
Today's
Features
David Krieger
Nuclear
Apartheid
Gilad Atzmon
The End
of Innocence
Gavin Keeney
Everybody's
a Critic
Alexander Cockburn
Can the Times' Jeff Gerth
Save Dick Cheney?
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