Pension Funds and Ponzi Schemes

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Martha Paskoff Welsh of the Century Foundation has a valuable report on Congress’ role in creating the current pension fund crisis. Here’s what it comes down to:

Congress repeatedly has passed legislation that enables corporations to underfund their pensions, overstate their profits, and postpone to another day any action that would lead them to keep their promises to employees. At the same time, Congress has passed laws making it more difficult for struggling workers and retirees to file for bankruptcy protection. The pattern is consistent: give business the breaks they need to avoid responsibilities to their employees while cracking down on households in trouble.

Is there any way out of this? Well, a few months ago Michael Hudson wrote in Harper’s that Bush’s plan to privatize Social Security can be seen as a last-ditch attempt to bail out companies that have underfunded their pensions, primarily by giving stock prices a much-needed jolt. Perhaps. My sense is that the plot to phase-out Social Security has less to do with dastardly corporate bailout schemes—see William Greider for more along these lines—and more to do with simple ideology. Conservatives hate Social Security as a program; after all, it’s the shining, popular symbol of the New Deal and the triumph of big-government liberalism, even though there’s nothing all that “big government” about Social Security (all it does is take money in and pay money out; no labyrinthine bureaucracies here.) Still, it is rather convenient that privatization just happens to help Congress and large corporations patch over the pension-fund Ponzi scheme they’ve been running all these years, isn’t it?

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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