Roger Lowenstein
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Subjects -> Business & Investing -> Economics -> Economic Conditions
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Customer Reviews:
Total reviews: 18
Average rating: 4.0 of 5
Too much historical detail and not enough analysis of solutions 4 out of 5 stars.
2 of 4 people found this review helpful.
The author examines 3 organizations......1 in the private sector (GM) and 2 in the public sector (NY Transit and City of San Diego) with respects to their pension plans and their financial health.
The case of GM is fairly well publicized. In early 2008, Business Week ran an article predicting that GM and Ford really have no choice but to declare bankruptcy...to eliminate their pension plan obligations by passing them along to the US taxpayers. As the author points out, GM went from being one of the most profitable companies in the world paying out good dividends to shareholders......to a money losing HMO on wheels.
All 3 cases have the same basic theme of management focusing on short term cash flow and ignoring the long term impact of pension obligations. The only caveat to this general theme is that San Diego threw in dishonesty of elected officials. I had not heard the "Enron-by-the-Sea" story of San Diego before.
The author's solution to our private and public pension dilemma is:
1. Nationalized health care with partial payment by the worker.
2. Keep Medicare for 65 and over people (but it has huge unresolved liabilities)
3. Keep Social Security but shift from pay as you go to government savings accounts.
4. Retirement plans should offer more annuity payout options (but the author forgets to point out that annuities offered by Wall Street have extremely high 2% expense ratios).
5. Create and enforce law that public pensions must be fully funded at all times.
I found the book to be too long and boring. I am not that interested in every little bit of history that created the problems at the three institutions. I would have rather had less historical detail......and more focus on pros and cons of alternative solutions to the pension problem.
If you are interesting in accumulating more assets so you are less dependent on our pension system, I would suggest reading some of the books noted below.
Index Mutual Funds: How to Simplify Your Financial Life and Beat the Pro's
The Richest Man in Babylon
Bogle on Mutual Funds: New Perspectives for the Intelligent Investor
The Millionaire Next Door
The Four Pillars of Investing: Lessons for Building a Winning Portfolio
A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, Ninth Edition
The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life
The Bogleheads' Guide to Investing
Editorial Review:
A Bestselling Author Explains, Via Three Fascinating Stories, How An Upcoming Pension Crisis Threatens to Upset the American Economy. With his trademark narrative panache, Lowenstein unravels the truth about how pensions work in America and illuminates the impending crisis. While America Aged is comprised of three fascinating case studies, set in the Detroit auto industry, among New York City transit workers, and in the city of San Diego. Lowenstein warns that the pension wars that erupted in these industries and cities are only the first. But he also recognizes that workers are entitled to decent security in their retirement--a critical problem as the country ages. Arming readers with knowledge of the consequences of doing nothing, While America Aged is, first and foremost, a call to action.
Engaging and informative, this work is presented unabridged on 8 CDs.