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The long-awaited book on pensions by top business writer Roger Lowenstein is now out and being reviewed. Its prescient title is "While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis." New York Times reviewer Jeff Madrick says, "San Diego's municipal workers were also granted generous pension benefits. The city management then deliberately skimped on the annual contributions, hiding the underfunding from the public while the union knowingly looked the other way. The result was near bankruptcy for the once thriving metropolis." Lowenstein puts the blame on labor unions, but Madrick says management deserves blame, too, as it always does. "San Diego, as Lowenstein states, could have raised taxes to meet its obligations -- it is one of the lowest taxed of major cities in California. But the politicians refused." Full disclosure: I was interviewed briefly by Lowenstein. I told him that excessive union benefits were a large part of the problem, but money diverted from the pension fund went to corporate welfare and the Republican convention. I have not read the book, so I don't know that this interpretation made it into print.
The long-awaited book on pensions by top business writer Roger Lowenstein is now out and being reviewed. Its prescient title is "While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis." New York Times reviewer Jeff Madrick says, "San Diego's municipal workers were also granted generous pension benefits. The city management then deliberately skimped on the annual contributions, hiding the underfunding from the public while the union knowingly looked the other way. The result was near bankruptcy for the once thriving metropolis." Lowenstein puts the blame on labor unions, but Madrick says management deserves blame, too, as it always does. "San Diego, as Lowenstein states, could have raised taxes to meet its obligations -- it is one of the lowest taxed of major cities in California. But the politicians refused." Full disclosure: I was interviewed briefly by Lowenstein. I told him that excessive union benefits were a large part of the problem, but money diverted from the pension fund went to corporate welfare and the Republican convention. I have not read the book, so I don't know that this interpretation made it into print.