Tuesday, October 21, 2008

Disaster Capitalism's Next Target: Pensions and Health Care

The acidic financial meltdown continues to eat away at the average American's finances. Not only do they get to bail out Wall Street for colossal failures in complex financial instruments, citizens risk loss of their employer retirement benefits and health insurance. At least, the talking heads on CNBC implied as much.

Auto manufacturers need dramatic cost restructuring to stave off bankruptcy. In a move reminiscent of airlines, big auto will likely request more salary and benefit givebacks from unions. Health insurance could be a feature of the past.

The stock market fall impacted most corporate pension fund investments. With declining portfolio values, many employer pension funds are underfunded. Freezing existing pension funds has been a common strategy to boost corporate balance sheets and executive incentive compensation.

Large unfunded liabilities are a no-no for corporations. That's the reason for the accounting change, requiring state and local governments to show their future liability for retirement and health care costs.

The plan is to dismantle the New Deal and replace it with Corporafornication. It's well on the way.