Top positive review
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Economic and political history
on May 16, 2008
Roger Lowenstein is the author of my favorite books "Buffett" and "When Genius Failed". His ability to collect the historical facts is amazing: the author gives 575 references to other sources throughout the book. I like this approach very much. This book is also timely and accurate: it is not only a spell-binding economic and political history, the origin and the problems of IRAs, 401(k) and other mechanisms - it is an urgent call to action and a prescription for reform. You will also find what do the precedential candidates of 2008 campaign think about this issue. Besides that, Lowenstein, a regular contributor to many financial periodicals, proposes his own solution. The author recognizes that the workers are entitled to decent security in their retirement - a critical issue as the country ages. He warns that the pension wars that erupted in Detroit, New York and San Diego are only the first. Government and corporations across the country used pensions as a seemingly easy way to curry favor with unions (easy because the expense would be deferred until a later generation). But now, with cumulative retirement deficits approaching $1 trillion, the day of reckoning has arrived.
The author declares that pensions are perfect vehicle for procrastination; in the financial world, they are the most long-enduring promises that exist. The only rival is the federal Social Security system - but there, surprisingly, the commitment is no so airtight. Congress, if it chose, could reduce or cancel Social Security benefits tomorrow. Pensions are forever.
There is a noteworthy example in the book: the young men who went to work for General Motors after World Word II, when GM ruled the roost of American business, were promised pensions and health care benefits that remained in force for half a century. One GM retiree, who died at 111 in 2006, had been collecting pension and retiree health benefits for forty-eight years. When he first went to work, in 1926, GM's managers could not have had the faintest conception of what the company could or would be paying in benefits eighty years later.
I do also recommend the other books by Roger Lowenstein in addition to his book.