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keithwms
03-26-2012, 10:36 AM
Ah yes well Krugman is well known for almost always taking the view that spending is good and cutting is bad. Even if you agree that we should've had more stimulus, most of Krugman's ideas are politically impossible. And his usual defense is: look! we haven't seen substantial inflation or big problems with bond yields. Well yeah, inflation isn't a problem until it becomes a problem... and then it's a *big* problem. For younger people like myself, Krugman may as well be the wizard of Oz, he's stuck somewhere back in the 1950s with old ideas about government driving growth.

We must become much more responsible, for the sake of our citizens and our businesses, and tend our bond yields. We are at ~2% on the 10 yr mostly because of euro-zone flight risk. It's certainly not because we miraculously became solvent last year and will always be. If our bond yields spike, there will be pain and it will be acute... and the trust fund will certainly lose value.

CGW
03-26-2012, 10:49 AM
Ah yes well Krugman is well known for almost always taking the view that spending is good and cutting is bad. Even if you agree that we should've had more stimulus, most of Krugman's ideas are politically impossible. And his usual defense is: look! we haven't seen substantial inflation or big problems with bond yields. Well yeah, inflation isn't a problem until it becomes a problem... and then it's a *big* problem. For younger people like myself, Krugman may as well be the wizard of Oz, he's stuck somewhere back in the 1950s with old ideas about government driving growth.

We must become much more responsible, for the sake of our citizens and our businesses, and tend our bond yields. We are at ~2% on the 10 yr mostly because of euro-zone flight risk. It's certainly not because we miraculously became solvent last year and will always be. If our bond yields spike, there will be pain and it will be acute... and the trust fund will certainly lose value.

I'll take a Nobel laureate and the facts over right-wing fear-mongering and fabulism any day, thanks.

keithwms
03-26-2012, 11:02 AM
Ah yes, the predictable Nobel comment. One of the most controversial modern economists and yet because of the Nobel, the masses treat his every word like gospel. Fortunately, some of us don't place all of our faith in theory.

By the way, at no point have I declared or implied any agreement with right wingnuts. But it's high time that liberals and conservatives both realize that the other side does have a point.

Roger Cole
03-26-2012, 11:16 AM
This sort of thing never solves anything and never changes any minds. (FWIW I'm pretty much in Krugman's camp, but I don't pretend anyone here will change their mind based on what I write.)

I'm 20 years out from retirement and pretty confident of having social security. This has nothing to do with Kodak though.

wblynch
03-26-2012, 11:23 AM
Social and financial responsibility knows no boundary by decade. Time has shown over thousands of years, how the rules work. Things are no different now. The 1870's, 1920's and 2000's in the US all fit the same pattern. It takes the same solutions to crawl out of the ditch. Krugman is right. FDR was too.

Young bucks love to blame gray hairs and believe that the rules are different for their younger generation but guess what, they are still the same.

The merger mania, vulture capitalism, incessant tax cuts, spending cuts and pension cuts began right after a certain US presidential election in 1980. The trend has lead directly to our current situation.

The pension problem started by corporations seeking permission to underfund the pensions. Each year they went back and asked for lower and lower limits until they got so deep they flat did not want to pay the money back. They claim duress, then bankruptcy, to eliminate their responsibility and "emerge a fresh, revitalized company".

Kodak is just following the recipe laid out by United Airlines, General Motors and hundreds of others. In the end they will sell off the rights and equipment and it will be up to the buyers to determine if we still get to buy film. Perez and his minions will retire to the Hampton s with the spoils.

Photo Engineer
03-26-2012, 11:25 AM
Guys;

Kodak does not administer its pension plans. Thats right, planS plural! They have several. They administer one plan for the "highly compensated" or very senior members of the staff. Only those will lose their pensions, and only regarding the part that was paid into when they went over a certain pay grade.

There are also recent lapses in payment to the outside manager of the plan(s) that Kodak failed to make. These are noted in the debt that Kodak owes to outside banks and investment firms.

The only part that Kodak administers for all is the health care plan. That they can discontinue with a wave of the hand. It is not guaranteed nor is it funded from anything. My understanding is that it is paid monthly or quarterly by EK. All I do know is that EK has asked to discontinue this health care plan.

So, an average worker will keep his pension but lose health care. We lost dental care 2 years ago. It has been gradually eroded.

A highly compensated worker will lose about 1/2 of his pension and health care.

PE

Roger Cole
03-26-2012, 11:31 AM
So they get to keep everything that was promised, with the possible exception of a few of the very richest who least rely on it, and lose something that, while nice, was never guaranteed to begin with.

That isn't nearly so bad as it sounded before the clarification. Thanks PE.

While I still sympathize, most retirees don't have health coverage from former employers. They have medicare and a private supplement.

Photo Engineer
03-26-2012, 11:45 AM
The one thing you missed is the fact that Kodak "guaranteed" health care to us, and our financial planning is based on that fact. That "guarantee" is what prevents their stopping it altogether. They have to go to court to get that guarantee abolished so that they can discontinue that plan.

And for some employees, about 50% or more of their pension will vanish. As you say, these may be the very wealthy, but it can still hurt them a lot.

So, here I have medicare + a private supplement (paid by EK). This private supplement will stop, and I will then have to pay up to about $250/month that I didn't have to pay before. There goes my financial plan. How easily could you afford that sudden and unexpected change to your budget?

PE

Roger Cole
03-26-2012, 11:48 AM
Ok, sorry, I misread your previous post. I took this:


The only part that Kodak administers for all is the health care plan. That they can discontinue with a wave of the hand. It is not guaranteed nor is it funded from anything.

to mean that this was never guaranteed. I see now you meant that it was "guaranteed" in that Kodak promised to pay it, but they never had it backed by anything more tangible.

That's bad and I do sympathize. I hope something can be worked out better than "poof, it's gone." :(

MattKing
03-26-2012, 05:52 PM
The Kodak Canada pension plan is similar. As of the end of 2010, the independent department of the Ontario government that serves as a "watchdog" over private pension plans has evaluated that plan as being 96.2% funded (actuarial valuation of projected obligations vs. actuarial valuation of capital on hand plus projected investment return). Not perfect, but not disastrous either.

Kodak Canada retirees have another thing in common with Eastman Kodak retirees - their health benefits are paid for them. Those funds are paid from operating profits of the current company.

The two fundamental differences are:

1) health coverage is much, much cheaper in Canada. There is a small monthly premium in some provinces for the majority of health care, with an additional premium for "extended" benefits like dental care, prescriptions, physiotherapy, etc.
2) Kodak Canada is not in bankruptcy, but it is a wholly owned subsidiary of Eastman Kodak, which is in bankruptcy.

I've caused my father (a Kodak employee for 37 years and a retiree for the last 26 years) great consternation by wondering if Kodak Canada might end up being sold by the bankruptcy trustee to Fuji :whistling: (like many Kodak "lifers", my Dad is fiercely loyal to Kodak and quite partisan about the "competition").

Photo Engineer
03-26-2012, 06:17 PM
I might mention that when I retired, the US retirement fund was over-funded by quite a bit. Somehow, someway those in high places managed to deplete it. I guess it was by not paying into it, and that during a bad market.

So, that is another point here to consider.

PE

keithwms
03-26-2012, 06:44 PM
I might mention that when I retired, the US retirement fund was over-funded by quite a bit. Somehow, someway those in high places managed to deplete it. I guess it was by not paying into it, and that during a bad market.

But Krugman says there's no problem! Maybe he'll divert some of his Nobel winnings to your retirement account...

But seriously, what happened is that the social security fund(s) were never intended to become a retirement account. There is a big difference between a minimal safety net and a full pension.

wblynch
03-26-2012, 07:43 PM
There are tens of millions of American seniors that have only Social Security for their income.

I think if anyone was able to measure it, there probably never were more than 10 or 20 percent of American workers that were ever covered by a 'pension'.

What to do about the other 80-90%?

Throw us to the wolves, I guess. Thank God (and FDR) for Social Security.

Ken Nadvornick
03-26-2012, 07:53 PM
Therein lies the more fundamental problem. In our society 80-90% end up with essentially nothing, no matter how hard they work and try to save.

What to do with them? Soylent Green, I guess...

Ken

Photo Engineer
03-26-2012, 08:49 PM
There are tens of millions of American seniors that have only Social Security for their income.

I think if anyone was able to measure it, there probably never were more than 10 or 20 percent of American workers that were ever covered by a 'pension'.

What to do about the other 80-90%?

Throw us to the wolves, I guess. Thank God (and FDR) for Social Security.

Do you have a reference for these figures?

Even the lowest worker at US Steel in Pittsburgh had a pension plan from the company. Westinghouse had one, Alcoa had one, and here in Rochester Xerox has one and Kodak has one. That covers every employee. All civil service employees of state and federal government have one, teachers have one, firemen have one, police have one, and the military has one.

That is a LOT of people in the US.

I know many small businesses and the owners buy one for themselves but often do not for the employees. That is a lot too, but to say that 90% do not have a plan is rather a surprise given my second paragraph.

PE

Old-N-Feeble
03-26-2012, 09:02 PM
It's called "bait-and-switch"... "smoke and mirrors"... "lies and BS"... "look at this shiny bobble while I...".

wblynch
03-26-2012, 09:07 PM
I think pensions were killed off in the 1980s. Replaced by 401k's that not everyone can take advantage of.

And if it isn't lost to stock market, people lose their job and drain the 401k trying to save their house before they end up losing it too.

There are millions of service workers, farm workers, self employed, small business owners that have nothing. Think your barber has a pension? Or the coffee-shop waitress down the street?

The people that work for large employers like mentioned rarely can stay long enough to qualify for those pensions. They are right-sized, outsourced and off-shored years before they make their retirement year.

Teachers are under attack and "everyone" wants to fire government workers and take their pensions away. By the way, I think people don't know that most government jobs have been replaced by contract firms so the workers aren't civil service or government workers at all. Those contract workers do not have pensions.

I don't have definitive sources for the number, but I personally know very few people, actually none, under 65 that get a real pension anymore.

The days of going to work for a career at the same place are long gone. The people that started their careers in the late 1940's to early 1960's don't have a clue what's really happened out here.

-----

Oh yeah, and I did not mean that no pension means no retirement plan. I just mean the traditional pension.

-----

sorry my post is not about film or Kodak's comeback.

Ken Nadvornick
03-26-2012, 09:11 PM
US Steel? Westinghouse? Alcoa? Xerox?

More like the waitress down at the local coffee shop. The mechanic who fixes your car. The fellow at the car wash. And that guy/gal behind the lawn mower.

Ken

clayne
03-26-2012, 09:28 PM
Hmmmm, seems like all the money has gone somewhere? Duh.

Old-N-Feeble
03-26-2012, 09:41 PM
Big Business = Big Government. Big Business controls Big Government. They OFFER us payment into Big Business Pensions or PROMISE pensions as an incentive to work for smaller salaries and FORCE us to pay into Social Security... then plunder it all and leave us with nothing.

I HOPE Kodak doesn't rob their employees' pensions.