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Lawmakers Demanding New Probe into Delphi Pension Terminations
Elizabeth MacDonald: You know that if the government can basically cancel your pension, then you know nobody is safe. The person saying ,"Yeah, if you play by the rules." Play by the rules meaning that you have to play by the rules meaning that you have to play friendly to the White House. I say 401(k)s are a better bet to own your money. This is what happens when the government comes into the economy via the bailouts. It goes like this. This is really dangerous and a disaster for the Americans out there.
Rick Ungar: I think the trend is pretty much under way with respect to 401(k)s but there are a few things about it that do trouble me a little bit. I do worry about companies that are going to be filling these 401(k)s with their own stock-we all remember Enron. There are some other things that concern me-right now only 40 percent of baby boomers even have a pension benefit. When you consider how wages have remained stagnant since the mid 1970s. The truth is that there are very few Americans out there that even have enough money to even put into a retirement fund-they are lucky if they can even pay the bills as the days go by.
Mike Ozanian: Yes, David, while the bailout of the auto companies was a kickback to the unions that support the president, that is all that it was. It didn't save any jobs, it just saved those jobs. Getting back to what E Mac's point was about 401(k)s, of course they are safer because you have more control. Yes, Rick is right, a lot of people do not have 401(k) plans Rick, but the point should be to expand that so that more people do have 401(k) plans. Let them be in control of their savings as opposed to the companies they work for. They don't have to put company stock in that-they can put any investment they want in that.
Bill Baldwin: I think that in terms of job benefits, we should be pro-choice which means that if an employer wants to offer a traditional plan they can have it as long as it is fully paid for. This also means that no employer can add a penny to benefits unless the existing earned benefits were covered in cash. If the town of Ridgewood, N.J., where Mike lives wants to have a $10 million payroll and a $20 million pension cost, let them!
Victoria Barrett: Bill always has a clever solution but I don't think that anyone would actually be as savvy as to do this Bill. If you look at pension funds, they are woefully underfunded and that is the real problem. I think that also a point worth making is that pensions ignore the reality of the job market in America today, which is that we don't stay at the same company for 25 years now. I have been at Forbes for 12 years. That is an exception. We move around a lot. So 401(k)s, you get to take the money with you versus having one pension here and one pension there.
Flipside: Everyone is warning that the fiscal cliff is a huge threat to America and must be avoided. But others are warning about the threat of our nation's debt, which is about to hit $16 trillion, and the fact that Congress has NOT and probably will NOT cut spending. So the Flipside is asking...
Would letting the fiscal cliff happen be the best chance to cut our debt? Is $16 trillion dollar debt threatening America?
JOHN TAMNY: We need to see this happen. Every two years we hear from Republicans and Democrats of how they are going to be effective stewards of our money and cut spending. Yet every year the U.S. Budget grows bigger and bigger. At this point, we need to take control out of Congress' hands and force major spending cuts. It's got to be in military, entitlements, everything. It's got to force these politicians to make big decisions which they are unable to make on their own. The fiscal cliff will enforce that. It's a shame that taxes will go up also but the spending cuts themselves will be a major economic stimulant for pushing limited capital back into the private sector.
STEVE FORBES: The economy would hit the pavement if we went off that fiscal cliff. First, the spending cuts won't be real, they'll hit the military but not much else and the tax cuts will be real. When you punish risk taking success and productive working you get less of them. We should learn from Europe, they are raising taxes, look what good that's doing.
ELIZABETH MACDONALD: I hear what Steve's saying, but I like John's point about the spending cuts and to your point about the alcoholic, I mean what we are doing now is treating them with the same poison they drank the night before with spending. The issue is we have business leaders saying that confidence is at its worst in 25 years; business uncertainty is the worst in 25 years. Maybe if the business leaders see D.C. doing something about rampant, out of control spending, maybe they will get more certain about it.
VICTORIA BARRETT: I was reading analyst's reports all week and everybody's making the case, this takes us into a recession in 2013. Also, Liz, I like the point that we have low business confidence and we need something to happen but this will do reverse, it will show just how broken our system is and what lack of political will there is to do something that is positive for the economy. The fact that it will even come to this is really tragic and I think it sends the opposite message.
RICK UNGAR: I love drama just as much as the next guy, it's great fun, but we can't let this sliding off the cliff happen, it's a terrible idea. Steve Forbes is right. You know what? I do keep hearing my friends talk about are more and more cuts. Yes we do need to make spending cuts and we need to make them in all areas and I'm glad that John included the military. But nothing is getting done unless we find a balance.
It's almost back to school time. New Jersey Governor Chris Christie just signing into a law a compromise between Democrats and Republicans, which cracks down on teachers' tenure.
Is a compromise like this what America needs to help save America's education system?
RICK UNGAR: I was so pleased to see this. Congratulations to Governor Chris Christie, to the teachers union, to everybody figuring out that this is the way we get things done in this country, we compromise. The big winners at the end of the day are the kids. We need to continue this across this country, we need to continue to work together, and this was a wonderful thing that happened this past week.
STEVE FORBES: Christie got something that would have been inconceivable 2 years ago, he has changed the environment, but on a scale from 1 to 100, it's about 20. There's a lot more that has to be done it just puts off tenure for just one more year. You need to get Charters in choice in the like to get real accountability so it's a step, but that's all it is.
VICTORIA BARRETT: I'm somewhere in the middle, so it's a great sign, and I think the dialogue in this country has really shifted in the past few years on education where we are actually prioritizing the children who go to our schools that's really stunning. We also realize that tenure is indefensible. Why does tenure exist? Why does the fact that you have been there a few years guarantee you a place going forward? It really puts young teachers at a disadvantage. This is a great sign but I do agree with Steve that we need a more accepting view and policies around charter schools because those are really going to change education in this country.
MIKE OZANIAN: The unions won big here. This wasn't a compromise. I love Governor Christie and usually agree with what he does, but the big Gov. wimped out here. Look, what this does is that it still fires teachers based on seniority rather than whether or not they could teach. The city of Newark is still going to pay $8 million to keep bad teachers in a room and not pay them to not teach. Where was our big education president Mr. Obama? He was cowering here, he wouldn't stand and try and support Christie here and get tougher on teachers because the president is more concerned with pocketing money from the teachers union than he is the kids. This was disgusting.
BILL BALDWIN: I think that Gov. Christie should have uncompromisingly insisted on vouchers and the choice that Steve is talking about is. Imagine if every restaurant in this country was owned and operated by the postal service, and imagine that service and food is real bad. Is the solution to how do you compromise on the best streamline way to get rid of 10 worst teachers. No, Solution is competition, no monopoly.
McDonald's and other big companies reporting disappointing profit reports. Our informers pick the companies bucking the trend and reporting strong profit reports.
BILL BALDWIN: AB Inbev (NYSE: BUD). Beer profits climbing 20 percent this year.
52- week high: $84.05
52-week low: $49.05
ELIZABETH MACDONALD: Tenaris (TS)
52-week high: $42.36
52-week low: $23.29