While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis
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From the bestselling author of Buffett, When Genius Failed, and Origins of the Crash, a wake-up call to the pension and retirement crisis facing America and the road map for a way out In While America Aged, bestselling author Roger Lowenstein explains how corporations and governments ran up ruinous pension and health-care promises to workers—promises that are now coming due and that will hit America like a tsunami if nothing is done.Negotiating high benefits means gambling with future finances—and when the farm gets sold out from underneath major corporations or public institutions, it affects all of us, and in ways we might not imagine. With his trademark narrative panache, Lowenstein unravels the truth about how pensions work in America and illuminates the impending crisis. While America Aged is comprised of three fascinating case studies— each an object lesson and a compelling historical saga. The first goes back to the early days of the United Auto Workers and its crusading leader, Walter Reuther, to tell the story of how pensions and health-care obligations destroyed the American auto industry, in particular General Motors.Lowenstein then shifts the scene to New York City to tell the story of the rise of public pensions and public sector unions through the vehicle of the Communist-led Transport Workers Union. Once again, justifiable benefits were followed by outrageous ones, such as the right to retire at age fifty. The saga reached a dramatic climax in 2005, when workers responded to proposed pension cutbacks with a massive strike that brought New York's subways and buses to a screeching halt days before Christmas.In the concluding episode, Lowenstein visits a metropolis even more reckless in doling out benefits—San Diego. Desperate not to impose higher taxes, city officials in this highly conservative enclave cut a series of deals with unions to short-change the retirement system and use pension funds to run the city. A massive scandal ensued—two mayors resigned, officials were indicted, and San Diego lost its bond rating. Lowenstein warns that the pension wars that erupted in Detroit, New York City, and San Diego are only the first. But he also recognizes that workers are entitled to decent security in their retirement—a critical problem as the country ages. While America Aged explains how we came to this crisis, and it also proposes a way out. Arming readers with knowledge of the consequences of doing nothing, While America Aged, first and foremost, a call to action. The New York Times - Jeff Madrick as Roger Lowenstein nicely illustrates in While America Aged, the country "is sitting on a retirement time bomb." He is not talking about Social Security, which, he writes, is among the more manageable of future concerns. He is addressing the large-scale failure of America's once-enviable private pension system. Lowenstein is one of the nation's most talented business writers, with a particular ability to make obscure financial issues clear as the morning light.
Pt. 1 Who Owns General Motors? 71 Walter Reuther and the Treaty of Detroit 92 The Anti-Reuther 39Pt. 2 The Public Freight 813 An Entitled Class 834 On Strike! 117Pt. 3 Debacle in San Diego 1535 Finest City 1556 Pension Plot 1757 The Bill Comes Due 195Conclusion: The Way Out 221Acknowledgments 233Notes 235Index 267
