More Doom and Gloom

[Eagle43]

Another NY Times article saying it's hard to do. Maybe the Times needs a link to this forum. As we get closer and closer to the Boomers retirements, I see more and more of these type articles.

http://www.nytimes.com/2005/02/09/business/09retire.html?th&oref=login

Of course, this is probably aimed at the social security debate. Here's some of the article, if you haven't registered.

As numerous companies across the country withdraw retiree medical and dental benefits while others switch to less generous retirement plans, many aging workers who had expected to ease comfortably out of the labor force in their 50's and early 60's are discovering that they do not have the financial resources to support themselves in retirement. As a result, a lot more of them are returning to work.

Since the mid-1990's, older people have become the fastest-growing portion of the work force. The Labor Department projects that workers over 55 will make up 19.1 percent of the labor force by 2012, up from 14.3 percent in 2002.

Until recently, most economists said that older people were being lured back into the labor force largely because of opportunities growing out of the vibrant economy of the 1990's. But these days, they say, many such Americans are being drawn to work out of necessity rather than choice.

As the nation gears up for a fundamental debate over the future of Social Security, these circumstances hint at potential changes in the federal program that supports more than 40 million elderly Americans.

Just as companies are seeking ways to reduce their roles in financing former employees in retirement, many economists say that the Social Security program should also scale back in response to the aging of the population.

Some have pointed out that continuing to raise the official retirement age in step with increases in Americans' average longevity could probably guarantee Social Security's solvency forever.

"Policies promoting longer working life could ameliorate some of the potential demographic stresses," Alan Greenspan, the Federal Reserve chairman, told a conference of economists and policy makers in Jackson Hole, Wyo., last year. "Early initiatives to address the economic effects of baby-boom retirements could smooth the transition to a new balance between workers and retirees."

 

[JOhn Galt]

Hi Eagle 43. Gloom and Doom is right! I make the rounds of the bookstores and libraries where I my
preferred reading is fianncial and business related.
Like you, I can hardly pick up a publication any more
without reading such discouraging blather. Anyway,
assuming the worst it gives me some slight comfort that I have reached geezer status, and thus may escape
"reforms" which may befall some younger folks.

It also amuses me to think what a CFP or such would say
if I walked in with my numbers and inquired when I might be able to retire. The answer might well be "never". Informing them I have been retired for years already would be a "hoot".

JG

 

[peggy]

I started reading that article this morning, but had to stop.

Like pretty much everything in the media these days, it only tells one aspect of a multi-faceted story. I came away from the article thinking that nobody had taken responsibility for their own retirement (one guy said "I was dealt a bad card" with regards to all of his Lucent stock tanking; no, he chose not to diversify by selling some stock off or with additional savings).

It seems to me that people will be able to FI/RE in *any* economy, if they (a) take responsibility for their own finances and (b) desire to do so. (Obviously, this is a generalization and there are exceptions.)

Meanwhile, like the guy in the article mentioned in the SWR forum, I'm finding it hard to come up with any sympathy for the ones profiled in the NYT article.

 

[cute fuzzy bunny]

One of my old employers had a delightful way of "handling" older workers, which I had plenty of on my staff.

One third of your review consisted of "new skills" you had developed during the year. Of course the 20-somethings took lots of fairly worthless classes in remote locations and enjoyed near zero retention of that training, while the well seasoned workers in their 50's with well rounded skill sets preferred to get their jobs done and spend time with their families.

When review time came around it was a job and a half to keep the older folks from getting whacked because they had not significantly improved their skills. Try keeping a straight face while telling a 58 year old guy that does project management for you, who has run $100M programs for decades...that he oughta take a few classes in writing vbscript or developing web pages to keep his job.

When I left, the company rolled all four of the over 50 employees into a "pool" where employees need to find new jobs within 90 days or receive "separation". By the way, almost nobody over 50 who went "into the pool" came out of it. There is incentive...if you take a separation package the moment you go into the pool, its about twice as lucrative as if you spend your 90 days and dont find a job.

Nifty way to fire old, highly compensated workers...hmm?

I did make sure to call the head of HR the day they were all put into the pool to let her know that her department had just put all of the over 50 employees in at the same time...and only employees over 50...and that I had let them all know that so they could warm up their lawyers.

On the rest of the topic, people who retire without a safety net can expect to experience problems. I never considered someone else providing health care or getting pensions or social security in my ER planning. If those things happen, thats gravy. Anyone who retires on a company pension with company provided health care or who thinks social security and medicare will take care of them should think again.

 

[John Galt]

TH, you sound like an interesting guy to have
as an employee. What's TH stand for anyway?
Trouble's Here? I agree with your advice to just
rely on your own resources and augment with whatever you can get. I even support those poor "over 50s"
who got stuck in the "pool", insofar as getting their
lawyers warmed up. Obviously I would prefer a world
where employers could hire and fire "at will". That is not the world we live in though,
nor are we likely to in the future.

JG

 

[LEX]

I wonder what would happen if the scenario described by TH was attempted with Federal Employees? HMM, think about this at a Post Office. This type of conduct is outrageous. I wish some of those 50 plus guys did get this in front of a jury. Stories like this make me inclined to dust off my license and do a Pro-Bono case or two. For a trial lawyer these cases are a form of recreation. I just might take on a few select "hobby" cases. Wait, I would have to get new clothes. Nevermind.

 

[cute fuzzy bunny]

John, you dont wanna know what "TH" stands for

Suffice it to say I believe that if you treat people fairly and with respect, most of them will do a good job for you. Some will take advantage of you, and for that, shame on them.

It takes a few years before everybody working for you really buys into the idea that you're really on their side.

And yes, when my employer behaves badly on a corporate level, I make sure they pay the piper. I'm big on accountability.

Theres a reason why there is an entire organization of older, ex-employees that regularly creates a ruckus for that company. Maybe if they looked into why they leave a trail of PO'd older folks behind them, they'd make a change. However the company is VERY xenophobic about new ideas or making changes to the "way we've always done things".

In that same vein, I'd consider things like pensions and medical care after retirement to be promised that should be kept. As I've detailed, not a lot of companies feel they have any obligations to long term employees.

With that in mind...make your own canoe...get your own paddle...find a creek that isnt made of #2 and start paddling upstream as hard as you can...

 

[LEX]

TH:

Though I was an executive in several large corporations, I still believe that any company, when it starts systematic employee abuse thats deliberate and culpable, should not only be accountable in the civil courts, but stand to lose its corporate charter, which is the corporate equivalent of the death penalty.  If what you described occured in any of the companies I worked in (ie: Standard Oil of California, now Chevron) the California Plaintiffs Bar would have opened up a field office across from HQ at 225 Bush in the SF financial district, handing out free toasters to sign on angry employees.

These corporations may be run by and replete with arrogance,  but they are eventually humbled if placed before the right tribunal.  When Enron occured, I was not surprised.  The one issue that still amazes me is that the officers that hid behind their titles and power are still walking the streets rather than someones main squeeze in the gray bar hotel.  Many of them should be stoned in the public square by their employees for the crap they pulled.

 

[Bridget]

I'll add in here - I am disgusted with the CEO of Enron or Worldcom (don't remember which) that is trying to defend himself with "I didn't know, therefore it's not my fault." I believe that nevertheless, as the CEO he is responsible - either he should be jailed for stupidity at not knowing what was going on, or jailed for lying. With the perqs comes responsibility and accountability in my book. It's probably my military background, but it is instilled that if you are in charge, you are responsible - period.

As for doom and gloom - it's all in your perspective. Heck, I see that the Terhorsts and Billy and Akaisha live on less traveling around the world than the average US salary. Comes down to expectations - and back to responsibility and accountability. Decide what you want and then make it happen - if someone helps, great, but don't expect it.

Bridget aka Deserat

 

[rapoole]

"I am disgusted with the CEO of Enron or Worldcom (don't remember which) that is trying to defend himself with "I didn't know, therefore it's not my fault."

Actually, it's both.

 

[John Galt]

I disagree completely. Have you ever been a CEO?
I have. In a big organization, it is literally imposible for
one individual to know what everyone is doing.
I am not saying he is innocent, only that the defense
is perfectly plausible.

JG

 

[Nords]

In a big organization, it is literally imposible for one individual to know what everyone is doing. I am not saying he is innocent, only that the defense is perfectly plausible. JG

Maybeso, but a submarine has fewer than 150 crew and the CO is still responsible for everything that happens while in command.

Maybe the CO didn't know-- tough. It's a CO's job to create a command climate where people will want to tell the boss these things... or where they'll even just do the right thing in the first place. It's what training and subordinate development are all about.

 

[LEX]

I was also a CEO of a medium sized mining comany for one stint in an series of random events I cobbled together as a career.  I will agree that it is impossible to know everything. I think even God has his blind side.   But you had better have management controls to know that the books are being cooked or that there is fraud going on, or you are as culpable ast the perp doing the deed.  The shareholders have hired the CEO to run these things down to ground, and, in my case, paid me more than I would have paid myself to lead. (I told the head of my board just that, and he replied 'sooner or later, you will earn every cent of it, even if takes your hide on the cabin wall!  Mining Men really do talk like that.) He was eventually right, just not then.

 

[John Galt]

Come on , Nords. In a perfect world maybe. I disagree completely with your comparison. Obviously, your
theory is not based on actual experience. This
"The top guy is responsible for everything" doesn't wash. Pure bunk!

JG

 

[Eagle43]

I concur with all the posters who believe that the CEO is responsible. Think Truman: The Buck Stops Here. Most CEOs know, going in, that, like NFL coaches, they will get credit they didn't earn, and criticism they don't deserve.

There is also evidence that transparency helps when the Boss really doesn't know.

Suppose, for example, that Nixon had lined up the Watergate caper fools on the White House lawn and fired them or sent applicable evidence for their arrest/convictions. Tricky Dick might not have been impeached.

Forget it, because Tricky really did know. But, of course, so did the Enron and WorldComm execs. If only we had some tapes....

 

[cute fuzzy bunny]

How about this? If you were CEO and didnt know a major coverup and book cooking was going on you simply return all the money you made in any way shape or form related to your operation of the company and are never allowed to hold a job again that doesnt involve asking "would you like fries with that?".

Because if you were competent, you'd have known. If you were incompetent, then give back all of the money.

 

[JOhn Galt]

Come on TH...................that must be your dopiest post ever. Or, maybe you just forgot to add a smiley face

Please excuse me if I offend, but you people who are
so critical of perceived corporate misdeeds probably have no idea of what it is like to actually run a company.

JG

 

[haha]

John, this guy has been playing golf with Carly F's husband.

I doubt his working years were spent in a cubicle.

Mikey

 

[johnblake]

Everyone at Intel gets a cubicle -- right?

The mischievous deals at Enron were so big and important that there's no way Shilling didn't know. I don't know much about Worldcom but these guys are paid tens of millions of dollars a year to run the company (by the way, I don't think anyone is actually worth that much.. well maybe Aristotle, Newton, or Einstein). We're not talking about some low level employee surfing porn on the web, mistreating another employee, or mismanaging a product. These shenanigans were perpetrated by senior execs and ment the difference between a fast growing and profitable company, and bankrupt fraud. A CEO making 10s of millions needs to be able to understand the difference. If they are not held accountable, then there is too little disincentive to defraud the customers and shareholders.

 

[sgeeeee]

Come on TH...................that must be your dopiest post ever.  Or, maybe you just forgot to add a smiley face  

Please excuse me if I offend, but you people who are
so critical of perceived corporate misdeeds probably have no idea of what it is like to actually run a company.

JG

Hi John,

Did you ever work in a large corporation? I'll admit that I never served as CEO, but I reported directly to CEOs for three different large corporations. Here's my thoughts about this: The CEO establishes a corporate culture and that culture is apparent to even the mid-level working stiff within days of arriving at the company. The kind of corruption and dishonesty required to produce an Enron would have been apparent to almost every employee there.

I don't buy your argument about the CEO not knowing what was going on at all. I think it is you that is out of touch with how large corporations work.

 

[John Galt]

We all are still entitled to our opinions (at least for now).
I never ran a large corp., but I did work for one late in my career and was CEO of several smaller corps.
before that. Thus, I tend to cut corporate America a lot of slack. Besides, whatever they do can't be nearly
as damaging as what my government does routinely
and on a much more massive scale. We need more politicians in jail and less CEOs. End of rant...................

JG

 

[JWV]

was CEO of several smaller corps.
before that.  ...................

JG

Now that you've brought it up, I've always wondered how big were these corporations? 1 employee, 5, 10, 1000. Makes a big difference and speaks to the validity of your arguments.

Thanks for your candid response, JG.

Judy

 

[John Galt]

Okay Judy. Fair question.
Those where I was President/CEO are as follows:

Paper products Manufacturing 250 employees
Defense Contractor 250 employees
Defense Contractor 15 employees

The last place I drew a paycheck was maybe
2,000 employees (I was CFO). Not exactly IBM,
but still........................

JG

 

[lets-retire]

I've been in the military where the unit commander didn't know we were routinely not manning critical posts. According to our written directives he had to be notified of any shortfalls. Since I was Ass't Shift leader myself and the shift leader were constantly complaining to our boss to give us bodies. We started monitoring other shifts and discovered they had many extra people. one day the commander checked in with me and the shift leader. Of course being the good commander he was asked if we needed anything. The shift leader said YES bodies. The commander told us to continue posting mininmum until our deployed people returned. The shift leader said fine give us bodies we can't post minimum. A couple days later I got ripped because my boss talked to the commander and he wanted us to have more bodies.

The point is a person in the top spot does not always get told what is going on at the lower levels. I don't think any of the CEO's mentioned were left entirely out of the loop but without access to the evidence presented I can't decide how much they knew. They are prolly using the "Idunno" excuse to try and get out of trouble. I think it is a weak excuse.

 

[sgeeeee]

. . .
The point is a person in the top spot does not always get told what is going on at the lower levels.  . .

I agree. Some of the weak CEOs I worked for tended to punish the messenger. Rather than reward honesty when it wasn't what they wanted to hear, they pushed these people aside. Before long they were incredibly ill-informed. They did not know what was really going on. And that's their fault. These people weren't earning their money and deserve whatever punishment they get.

The strong CEOs I worked for were very good at rewarding factual, important information -- regardless of whether it was good or bad. They recognized that they could address issues if they knew about them, and they did not fear that challenge. It was what they didn't hear about that could hurt them. These people earned their money and are not in the position of having to defend themselves with the "I didn't know what was going on" argument.