While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis
In the last several decades, corporations and local governments made ruinous pension and healthcare promises to American workers. With these now coming due, they threaten to destroy twenty-first- century America's hopes for a comfortab...more
Funding the pension also drained immense resources from what GM could invest in product design, which set back its efforts to build better cars. “They were absolutely related,” one executive confirmed. “Quality is expensive.” Pouring its funds into pensions, GM was late to invest in hybrid v...more
Who would have thought that pensions could be interesting? That accouting and actuarial science could take on the character of creative writing? Well they can and do.
Pensions first started to appear in the late 19th century for workers in especially dangerous professions, and slightly later as a perk for white collar and civil service workers. They really took off after Walter Reuther, the head of the United Auto Workers in the middle of the 20th century, got them into the union's contracts w...more
The book goes over the history of GM’s pension plans and those of the New York Metropolitan Transit Authority (MTA) and of the pensions of the city of...more
I'm not opposed to public pensions but they need to be funded as the benfits...more
Lowenstein also casts doubt on the future of Healthcare plans, and in part...more
Still, it gives a good overview of why pensions have exploded - longer life...more
The recent fall in interest rates makes it all the more difficult to honor these commitments. The story of how we got here makes a fascinating albeit sad story whose ending unfortunately looks to be tragic.
I agree with one review of the book which said that Lowenstein's diagnosis of the problems are spot on. However, his proposed solution seems to reinforce...more
Lowenstein covers 3 pension plans: GM's, the new york subway system, and the City of San Diego. All had boom times, weak leadership, strong unions, and a lack of understanding of big picture finances.
All 3 cases were fascinating in their own way. The people were very believable. He laid out flaws, but also personal strengths, and the full myriad of factors that put each pension...more