401(k) @ MindSay

Well, election day has come and gone and what have we learned?

First, how did I do in my random predictions.

Connecticut - Lieberman ----Correct
Missouri - McCaskill -----Correct
Montana - Burns ----Uncertain (but probably wrong)
Pennsylvania - Casey ----Correct
Ohio - Brown ----Correct
Virginia - Webb ----Uncertain (but probably right)
Tennessee - Corker----Correct
Rhode Island - Chafee----Wrong
Maryland - Cardin----Correct

I had 6 out of 9 correct outright.  I called Rhode Island wrong.  Out of the two uncertain races, if things stand as they currently are, I will have 1 more correct and 1 more incorrect.  If that happens, my final score will be 7 correct and 2 wrong.  I feel pretty good about that.  I think I counted on Chafee's name recognition and history a little too much.  It would be tempted to say that I barely missed Montana if things stand, because it was so close, but it would be unfair unless I also said I barely got Virginia correct.  So it's a wash in my opinion.  Still, I wonder how many so-called political experts and pundits would have gotten as good or better results on such close contests?

Enough of pulling my own chain. 

I watched part of a PBS Frontline special about retirement plans and pensions last night and it seemed especially timely in light of my recent post about bootstrap conservatism.  The 401(k) plans that are so prominent were highlighted in the show.  It turns out that there is a large disparity in return on these plans.  The bottom 20% receive about a 4% return on their investment, while the top 20% receive as much as a 30% return on their investment.  And guess what?  The top 20% correllate with the highest salary contributors, while the bottom 20% correllate with the lowest salary contributors.  The rich get richer.  Another point was that the switch from traditional pensions to 401(k) plans was a boom to corporations.  In the 1970's, expenses associated with managing and establishing retirement plans were paid for at the rate of about 13% for employees and 87% for employers.  In the 1990's, when 401(k) programs became the latest craze, the burden had switched to about 60% for employees and 40% for employers. 

The program also discussed the use of bankruptcy by corporations to "reorganize".  They are able to cut benefits, salary, and pensions and there is nothing the employees can do.  CEO's often keep their salary and even receive bonuses.  In the case of United Airlines, the CEO was even able to keep his pension since he mandated in his contract to remain CEO that it be placed in a special trust set aside just for him rather than included with the deeply red fund for all other employees.  Another case of the already wealthy coming through a difficult situation smelling like roses, while the average worker is struggling, working longer hours for less pay, fewer benefits, and vanishing retirement security.

Here's an idea.  Since the rich will most likely bellyache and moan if the new Democratic Congress wants to reinstate taxes on the wealthiest 1%, and will most likely use the standard argument that taxes on corporations and the wealthy discourage investment and therefore will hurt the economy rather than create jobs, etc... I have a proposal.  How about a sliding tax scale for corporations and wealthy executives?  Let's base it on the disparity between the value of CEO compensation or coporate profit and the average (median) yearly salary for the lower quartile of employees.  The greater the disparity, the higher the tax, to help cover the social costs that corporate and executive greed are just shifting to the public sector in any case.