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08/30/2004 Archived Entry: "Energy ruling in Iowa"
Cartoons! Ben Sargent's "What to Worry About"; Glenn McCoy's "Hard to Tell Them Apart"; Stuart Carlson's "Not Intimidation"; and, Ted Rall's "don't Look Dumb. George Bush should be heartened by the defense of his military record being offered by the group Swift Yacht Vets for Bush. A spokesman declares, "I remember one time we got stranded out in Goosefair Bay and ran out of gin. We were up to our eyeballs in limes and tonic. Wouldn't ya know, here comes George W. Bush on the Laura II with a relief shipment of Tanqueray. By God, he saved a few lives that day!"
Everyone's economic radar should be humming on the subject of retirement pensions - those rainbows at the end of a lifetime's work which are supposed to come with a pot of gold.
More and more companies are defaulting on or fudging the terms of pension plans, especially through bankruptcy. In a column entitled "Baby boomers: Wake up!", Ellen Ratner writes, "An acquaintance of mine put in 29 years of his life -- over half of his life -- only to find out there was no gold at the end of the rainbow. The bankruptcy judge and union agreed that the cutoff for pensions was 30 years. Twenty-nine years and 11 months seniority means you get zippo. Thirty years, you get some retirement." And many North Americans have no Plan B for financial security in their old age.
If you're among them, start planning now. Too many policy makers - including Bush in his acceptance speech at the RNC -- are commenting on the pension "crisis" and on "painful" changes the pension system must undergo. (Gary North offers the best overview of this crisis and the coming pain that I've found.)
The current situation with United Airlines is indicative. United just filed court papers stating a likelihood that it will terminate and replace its employee pension plans; a month ago, United announced that it would stop making payments to pension plans until it emerges from Chapter 11. An editorial in USA Today comments, "In theory, United will resume payments once it's out of bankruptcy, possibly later this year. In reality, its pension funds will likely be taken over by a federal agency that already has bailed out much of the ailing steel industry and is bracing to pick up the pieces of collapsed airline pension plans."
That federal agency is the Pension Benefit Guaranty Corporation (PBGC). John Mauldin, who offers a free weekly email letter, explains, "The PBGC insures pension benefits worth $1.5 trillion and is responsible for paying current and future benefits to nearly 1 million people in over 3,200 terminated defined benefit plans [plans that offer workers a specific set of benefits for their retirement years; approx. 72% of the S&P 500 offer DBPs.] Benefit payments totaled $2.5 billion dollars in 2003. Benefit payments are expected to grow to nearly $3 billion in 2004. The PBGC is also underfunded to the tune of $11.2 billion, up from a mere $3.6 billion last year."
(When the PBGC takes over a fund, employees receive only a fraction of the promised pension. Moreover, taxpayers get soaked twice over in the pension squeeze: 1) they have to ante up to cover whatever shortfall the PBGC experiences; and, 2) the value of their money is diluted as the government, responding to pleas from corporations, inflates the money supply in order to provide more and "cheaper" currency with which to pay pensions.)
Attention is being focused on the United Airliens situation because, as Mary Williams Walsh wrote in the New York Times, "If all four of United's pension plans were to terminate at the same time, the agency [PBGC] would absorb much of the $8.3 billion shortfall as a loss. Such a collapse would be the biggest by far in the agency's history. So far, the biggest plan failure was that of Bethlehem Steel's pension plan in 2002, which cost the pension agency $3.6 billion." The crash of United's pension plans alone could precipitate a full-blown crisis.
Gordon P. keeps us informed of a development that may impact the self-sufficiency movement.... He writes, The Iowa Supreme Court has ruled against an Iowa electric copperative and in favor of the owner of a 65 kW wind-turbine, finding that utilities must use "Net Metering" when dealing with customers having "small generators" that put "excess" power onto the grid. This ruling means that utilities must pay customers the "retail" rate for "excess" power, rather than the lower "avoided cost" rate they would have paid another electric utility. The court based its majority ruling on the "Public Utility Regulatory Policy Act" (PURPA) of 1978, claiming that the Act's purpose was to "encourage renewable resource development," and arguing that it was "in the public's interest" to require utilities to pay the higher "retail" rate to customers with "excess" power instead of the lower "avoided cost" rate, in order to encourage them to install "alternative" energy generators. (There was one dissenting opinion in favor of the "avoided cost" rate.)
In his blog entry, Mike Giberson notes that the Iowa Court's ruling is analogous to the court ordering that a supermarket must pay the full retail rate to any customer who brings in apples hand-picked from their own backyard, rather than the wholesale rate they would have paid a commercial supplier of apples --- i.e., requiring that a supermarket _must_ buy all home-picked apples, and cannot make any profit off of re-selling them --- in order to "encourage" people to plant apple trees...
I usually don't pass on "funnies" sent to me by friends but I thought this one captured something true about the world's view of Canada and Canadians. Now that Vancouver has won the 2010 Winter Olympics these are some questions about Canada that were posted on an International Tourism Website. (The answers were improvised. )
Q: I have never seen it warm on Canadian TV, so how do the plants grow?(UK)
A: We import all plants fully grown and then just sit around and watch them die.
Q: Will I be able to see Polar Bears in the street? (USA)
A: Depends how much you've been drinking.
Q: I want to walk from Vancouver to Toronto - can I follow the railroad tracks? (Sweden)
A: Sure, it's only Four thousand miles, take lots of water.
Q: Is it safe to run around in the bushes in Canada? (Sweden)
A: So its true what they say about Swedes.
Q: It is imperative that I find the names and addresses of places to contact for a stuffed Beaver. (Italy)
A: Let's not touch this one.
Q: Are there any ATMs (cash machines) in Canada? Can you send me a list of them in Toronto, Vancouver, Edmonton and Halifax? (UK)
A: We still use Beaver pelts.
Q: Can you give me some information about hippo racing in Canada?(USA)
A: A-fri-ca is the big triangle shaped continent south of Europe. Ca-na-da is that big country to your North. Oh forget it. Sure, the hippo racing is every Tuesday night in Calgary. Come naked.
Q: Can you send me the Vienna Boys' Choir schedule? (USA)
A: Aus-tri-a is that little country bordering Germany which is. . .Oh, forget it. Sure, the Vienna Boys Choir plays every Tuesday night in Vancouver and in Calgary, straight after the hippo races. Come naked.
Q: Which direction is North in Canada? (USA)
A: Face south and then turn 180 degrees. Contact us when you get here and we'll send the rest of the directions.
Q: I have developed a new product that is the fountain of youth. Can you tell me where I can sell it in Canada? (USA)
A: Anywhere significant numbers of Americans gather.
Q: Can you tell me the regions in British Columbia where the female population is smaller than the male population? (Italy)
A: Yes, gay night-clubs.
Q: Do you celebrate Thanksgiving in Canada? (USA)
A: Only at Thanksgiving.
Q: Are there supermarkets in Toronto and is milk available all year round? (Germany)
A: No, we are a peaceful civilization of Vegan hunter/gatherers. Milk is illegal.
Q: I have a question about a famous animal in Canada, but I forget its name. It's a kind of big like a horse with horns.(USA)
A: It's called a Moose. They are tall and very violent, eating the brains of anyone walking close to them. You can scare them off by spraying yourself with human urine before you go out walking.
Q: I was in Canada in 1969 on R+R, and I want to contact the girl I dated while I was staying in Surrey, BC. Can you help? (USA)
A: Yes, and you will still have to pay her by the hour.
Best to all,