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While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis | 
| Author: Roger Lowenstein
Publisher: Penguin Press HC, The
Category: Book
List Price: $25.95
Buy New: $12.20
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Avg. Customer Rating:  11 reviews
Sales Rank: 5010
Media: Hardcover
Number Of Items: 1
Pages: 288
Shipping Weight (lbs): 1.1
Dimensions (in): 9.3 x 6.1 x 1.1
ISBN: 1594201676
Dewey Decimal Number: 331.25240973
EAN: 9781594201677
ASIN: 1594201676
Publication Date: May 1, 2008
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Condition: NEW! clean & crisp!
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Product Description
From the bestselling author of Buffett, When Genius Failed, and Origins of the Crash, a wake-up call to the pension and retirement crisis facing America and the road map for a way out
In While America Aged, bestselling author Roger Lowenstein explains how corporations and governments ran up ruinous pension and health-care promises to workerspromises that are now coming due and that will hit America like a tsunami if nothing is done.
Negotiating high benefits means gambling with future financesand when the farm gets sold out from underneath major corporations or public institutions, it affects all of us, and in ways we might not imagine. 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 each an object lesson and a compelling historical saga. The first goes back to the early days of the United Auto Workers and its crusading leader, Walter Reuther, to tell the story of how pensions and health-care obligations destroyed the American auto industry, in particular General Motors.
Lowenstein then shifts the scene to New York City to tell the story of the rise of public pensions and public sector unions through the vehicle of the Communist-led Transport Workers Union. Once again, justifiable benefits were followed by outrageous ones, such as the right to retire at age fifty. The saga reached a dramatic climax in 2005, when workers responded to proposed pension cutbacks with a massive strike that brought New Yorks subways and buses to a screeching halt days before Christmas.
In the concluding episode, Lowenstein visits a metropolis even more reckless in doling out benefitsSan Diego. Desperate not to impose higher taxes, city officials in this highly conservative enclave cut a series of deals with unions to short-change the retirement system and use pension funds to run the city. A massive scandal ensuedtwo mayors resigned, officials were indicted, and San Diego lost its bond rating. Lowenstein warns that the pension wars that erupted in Detroit, New York City, and San Diego are only the first. But he also recognizes that workers are entitled to decent security in their retirementa critical problem as the country ages. While America Aged explains how we came to this crisis, and it also proposes a way out. Arming readers with knowledge of the consequences of doing nothing, While America Aged, first and foremost, a call to action.
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| Customer Reviews: Read 6 more reviews...
 Terrific Book! July 18, 2008
This is a fantastic read! The book discusses the plight our society faces when the bill comes due on pensions and health benefits for many corporations, city and state governments. It prompted me to look at the state of Nevada pension plan for teachers. The plan is grossly underfunded and guess who gets to pay for these benefits when the plan runs out of money. Me, the taxpayer. As of June 30, 2003, Nevada PERS assets had a market value of $14 billion, but actuarial liabilities of $19.5 billion. 5.5 billion in the hole. The book also woke me up to looking at the balance sheet of a company when considering to invest. For example, I would not invest in GM since the majority of their profits go to pay for the pension and health care plans. As a potential stockholder there would be little money left to distribute to me. The book provides the example .."by the late '90s GM was facing the demographic nightmare.." in pensions. GM is "...down to 180,000 hourly employees, compared with a dizzying 400,000 retirees." GM is an example of what Social Security will look like when the money runs out.
Excellent Book-Really drills home pressures on public plans and collectively bargained plans July 16, 2008
I enjoyed reading this book and it gave me an better understanding on how public and union plans can succumb to the pressures to increase benefits now without having to pay for them until later. Gives a good historical perspective of what was going on at GM, in NYC, and San Diego when their pension plans developed their problems.
One thing that is never explicitly stated is that all these governments and unions that crippled their finances by promising generous postretirement medical benefits must be praying for the enactment of universal health care to bail them out of paying for their promised benefits.
I had to take a star off for the final chapter on what should be done going forward. I suppose after an excellent history lesson, Mr. Lowenstein felt the need to tie his three vignettes together, generalize the lessons here to the state of all US pension plans, and come up with a set of solutions. However, the problems facing public and union pension plans are different from those that have put private pension plans in decline. Private pension plans have been hurt by overregulation and by the high cost and volatility that these plans have on a company's financials under new and evolving accounting standards. A private company can freeze it's plan (if its not collectively-bargained) and many have chosen to do so to provide benefits with 401(k) plans whose costs are easier to control.
The other failing of the last chapter is that, after keeping his politics mostly in check through most of the book, he starts reciting liberal talking points to come up with his solutions. He lauds Hillary Clinton by name for her solution of providing government-paid 401(k) accounts for low income people, but condemns President Bush (along with the right wing) for exaggerating the funding strains on the Social Security system and proposing to partially privatize Social Security with a 401(k)-based solution. After spending the whole book expounding on the problems caused when current benefit promises rely on future cash outlays, he then brushes off the same dynamic when it applies to the Social Security system.
Worthy Praise July 6, 2008
Almost every review here begins with how exceptional Roger Lowenstein is. This review does also. In fact, it's hard to describe how interesting this book really is, considering that the issue at hand is a considered a boring one at that - pensions.
Lowenstein brings an extremely in-depth amount of research to demonstrate truly that happens. The fact that most of the public is still unaware of this shows how what appears to be such a small issue has really undertaken our companies.
The facts and the characters in each example deserve praise. Although we would hope that many of our top executives would not be so short-sighted as to giving unions constant pension raises, Lowenstein is able to demonstrate how unions effectively strong-armed executives into doing so. As I write this, I stare at the analyst reports that declare there is a possibility, although small, of General Motor declaring bankruptcy. Unbelievable.
I would sincerely recommend anyone that has an interest in pensions, or in just any business interest to take a crack at this book. It isn't famous, not like Lowenstein's others, but it certainly is well-written and deserves much praise in keeping what could be a boring topic exceptionally interesting. I don't want to give it all away, but the intricate research that Roger Lowenstein has done shows through with almost every page.
I can't exactly narrow down what it is about his style, but there's an eloquence to it that makes reading his books almost .. as if the book is reading to you.
reasonable fear June 17, 2008
Roger Lowenstein is one of the most accomplished financial writers around. Pensions are a boring subject. Who would ever have drinks, on purpose, with an actuary? Maybe if you were stuck on a plane next to one, and the liquor were free...
Lowenstein is able to make them seem both dramatic and important. Something has escaped our attention. Pension benefits have been piled on by labor unions and politicos without regard to their ultimate cost. Lowenstein makes it pretty clear through several recent and important examples that this is nothing short of a disaster. But why should it matter to us? Because we face a huge pension shortfall as Social Security becomes underfunded, and many states are verging on bankruptcy...
The negotiations Lowenstein depicts are as dramatic as those of The Smartest Guys in the Room - and equally rife with chicanery. Though he's deft with analysis, rendering the complex simple, he's got a knack for characterization and drama that belies what might be considered remote and dull subject matter. Once you read the book though, you won't feel the same way about pensions or even unions - though of course unions have greatly benefited the US at other moments in our history.
So read it and weep! Or get mad and do something about it.
Pension plans are not the problem, but the underfunding is June 17, 2008
I am glad to see the inadequacy of public pension plan funding getting more attention. The book is extremely well written and easy to read. It provides valuable insight into the pension plan decision-making process, and shows the danger in trading benefit improvements for inadequate contributions. As Roger Lowenstein points out, public pension plans themselves are not the problem, the problem is that they are so often underfunded. Contributions to public defined benefit plans calculated under traditional actuarial methods are not necessarily sufficient to make a plan actuarially sound. There is a need to establish rules for funding contribution calculations to strengthen the actuarial soundness of public plans. The current rules allow payments to be made on the unfunded liabilities that are less than the interest on the liability. At least for mature plans that are poorly funded, the payments made on the unfunded pension liabilities should be accelerated. Consideration should be given to requiring minimum contributions to public pension plans.
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