A "Gilded Age" For Some

“Once more unto the breach, dear friends” – let us have no illusions about what is at stake here, after all. With that in mind, I think it’s time for a heaping dose of genuine populist outrage. This column from Molly Ivins provides the necessary fuel for the fire, as it were, and the very last sentence should be memorized by everyone.

To get more of a flavor for “the have’s versus the have nots,” I went back to the old site and found the following from last March about Jack Welch and a gentleman from U.S. Airways who may or may not still have a job.

I should let you know (from a highly reliable source) that Jack Welch was interviewed by Dan Rather on "60 Minutes II" tonight (I always thought that was a dumb premise for a TV show, by the way...sticking a "II" on the end of a title of a landmark program to make the new show sound special). In the interview, Welch described how, when he stepped down as CEO of G.E., the board approved some particularly lavish severance package for him worth millions, but he passed it up, saying $7.1 mil plus perks (including private plane) was enough apparently (what a guy). So, it turns out that after he passed it up, one of his trophy wives filed for divorce and cleaned him out, and he ended up regretting not taking the money (awww...). Partly as a result of this, he ended up marrying again, finding a true soul mate (money, status, and power being powerful aphrodisiacs), and together the two of them have written a book (of course they have...he wouldn't be on TV unless he was plugging something, right?).

(By the way, I consider interviewing Jack Welch to be another "right turn" for CBS and Les Moonves as they do whatever it takes to try and prop up the network with its lousy ratings...I stand by the journalistic "old guard", but I know I'm in the minority in that department. I don't really blame Rather for that because he's just following orders, as they used to say.)

(Update 1 10/13: As further proof of that, Mike Wallace, of all people, gave Louis Freeh a free pass last Sunday while he blasted Clinton over allegedly being soft on terrorism. As I said previously, Freeh supported his boss the same way Brutus supported Caesar.)

(Update 2 10/13: Naah, CBS isn't desperate for ratings - not much they aren't. What's next, Andy Rooney, Morley Safer and Lesley Stahl in Kangols, Pumas or "fly" sweat suits?)

As you consider this about Jack Welch, please take a few minutes and read over this excellent column from Philadelphia Inquirer business writer Andrew Cassel, published today (property of Philadelphia Newspapers Inc. and Knight-Ridder, and no remuneration received by yours truly for same...).

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In a Florida airport recently, waiting for a flight home, I fell into conversation with a US Airways pilot who was doing the same. He was chipper, but his story was sobering.

In his late 50s, with kids to put through college, he had seen his pay cut several times in recent years as his airline navigated the unfriendly financial skies. He figured he was taking home about 40 percent less than in better times.

He also faces a Catch-22 future. Under FAA rules, he has to stop flying at age 60. But US Airways won't be paying his retirement pension: In Bankruptcy Court, the airline passed its obligations to a federal agency. And the agency won't let pilots start collecting until they hit age 62.

The guy wasn't griping; he understood that times were tough and that companies such as US Airways were struggling to survive. The main lesson, he said, is simply this: You'd better save more money when you're young.

It's a good bet that lots more people will soon be coming to that realization, even if they don't work for troubled airlines. Throughout the American economy, increased financial risk is a consistent theme of our time.

Financial writer Daniel Gross calls it the "death of welfare capitalism." Year after year, in industry after industry, the guarantees and safety nets that characterized corporate life for generations of workers are eroding or being abandoned.

Job security? Pensions?

Career-long job security is practically a joke. Traditional defined-benefit pensions are being replaced by individual savings plans such as 401(k)s. Health-insurance plans are growing less generous or more costly, with workers picking up more of the tab.

You can decry all of this as evidence of corporate ruthlessness, but the truth is really that big, paternalistic companies are among the most vulnerable these days.

General Motors, whose corporate debt was given near-junk status this month, is the latest case of an industrial giant being hamstrung by its past promises to workers and retirees.

Remember Bethlehem Steel? The reason the onetime Pennsylvania manufacturing icon is now a memory isn't that it didn't know how to make metal competitively. It couldn't both make metal and provide the pensions and health care it had promised to thousands of past workers and their families.

You can see how all this is changing the way we work in a new study by the Washington-based Employee Benefit Research Institute.

It says the number of companies offering health benefits to retirees dropped substantially between 1997 and 2002.

Moreover, "most American workers will never become eligible for retiree health insurance from a private employer" in the future, it said.

Early retirees hit hard

This will particularly affect those hoping to leave work at 60 or 62, before they are eligible for Medicare.

The proportion of employers offering benefits to such "early retirees" fell to 13 percent in 2002 from 22 percent in 1997, the study says.

Rising medical costs are obviously driving the trend. But accounting standards are also part of why companies are more reluctant to offer health benefits, the institute argues.

Since 1992, firms have had to show the costs of promises to future retirees on their earnings statements. That affects today's bottom line, and often a company's stock price as well.

So older companies are cutting benefits where possible, and newer firms are being less generous to start with.

Workers are beginning to figure this out; the study says fewer than half of those between ages 45 and 64 expect to receive health benefits in retirement.

Nevertheless, it seems the trend may be moving faster than people's expectations. "Baby boomers may find themselves unpleasantly surprised by what awaits them in retirement," institute researcher Paul Fronstin says in the study's introduction.

Clearly, more of us need to pay attention to what's been happening to the folks at US Airways.

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"Clearly" indeed. Given all of what Cassel just wrote, I think Jack Welch should be put on a slow boat to China without oars (he could visit some of our jobs when he's there). He actually doesn't represent the worst of the crony capitalism currently holding sway over our lives, but he and a few others "let the genie out of the bottle," so to speak.

As I pointed out back then, whether we realize it or not, we are returning to the era of the Carnegies, Rockefellers, Jay Gould and Tammany Hall, etc. The very few rich will have everything and the rest of us will have table scraps.

So, do you know what you should do? This. Stop watching "American Idol," "CSI: Wherever," "NASCAR/Winston Cup/NEXTEL/Some other corporate benefactor this week," turn off the TV, contact Dr. Dean, his brother Jim or Tom Hughes at Democracy for America and DO SOMETHING ABOUT THIS! Think. Talk. Write. Organize. Make flyers to hand out at a supermarket or stick under bunches of car windshield wipers. SOMETHING!! Or, even start your own blog, if you think that will help (and good luck trying to get traffic to your site, I might add). And I mean no personal disrespect to anyone - if you're reading this…and I say this with all humility…then you're probably a leg up on a good many other people.

One more thing: the new fraud bankruptcy law goes into effect on October 17th (excepted for the recent hurricane victims). I found this article on it from the Bucks County Courier Times; I mean no disrespect to Crissa Shoemaker, but this piece (which emphasizes primarily how the law will affect professionals in financial services) doesn't really give me the background I was looking for. It is instructive, though. However, Molly Ivins tackles this also in greater detail.

Update 10/24: Since everything I've described above is "part and parcel" of the Repugs' slide in the eyes of a growing number of people, I've added this from Will Durst so the Dems can find a clue about how to "make hay" over it.