The Confiscation of Pensions by State and Local Governments

Walter L. Bell, Ph.D.
If you have been reading the press and watching the news lately, you may have noticed that cities like Detroit and Chicago and states like Oregon have looked to use pensions as a means of balancing budgets. Pensions were set up so that workers of all kinds could invest part of their salaries in a pension which was controlled by law with fiduciary experts who were supposed manage those pensions, with strict guidelines governing the actions of the managers who could be sentenced to prison terms for fraud and other misdeeds. One of the states leading the move to provide pensions for public workers was Wisconsin, until Scott Walker became the Governor, and decided to use those monies to balance the state budget. Scott Walker is a member of ALEC, a secretive organization made up of Corporations, Lawyers, Legislators, millionaires, billionaires, and mostly Republican Senators and Representatives, at both the State and National levels.

Cities like Chicago and Detroit have confiscated pension funds through bankruptcy and other means to build sports arenas. A federal judge ruled that in the instance of bankruptcy, that a city such as Detroit could confiscate pension funds to pay for the misdeeds of organizations such as ALEC, city managers, corporations who set up operations offshore to escape federal regulations and taxes, and use pension monies to pay for the misdeeds of others. In short, it appears that retirees, and union workers have no rights to the money that was set up for their retirement.

Several administrations, starting with President Reagan and including Presidents Bush, President Clinton and President Obama have turned a blind eye to the plight of union workers except when looking for donations for campaign funds. We have Raume Emanuel, the Mayor of Chicago, Secretary of Education Arnie Duncan and also the former Superintendent of Chicago Public Schools who have denounced Public Schools in favor of Charter Schools where teachers must work ten hour days and are not allowed to join unions. Supposedly the teacher’s unions protected inept teachers from being fired, so the way to fix the problem was to create Charter Schools and work to eliminate unions including teachers’ unions and industrial unions as well. In addition, since our industrial complex has been sent offshore where workers are paid so little that they cannot feed their families, that leaves the few existing unions pension funds to be plundered by persons like Walker and Emanuel in order to build sports complexes in both Chicago and Detroit as well as in other cities.

In order for the Republican Party to gain traction they have lost in recent elections, they have refused to raise the minimum wage, and have allowed corporations to fire workers who try to join unions. One of the most prominent of these is Walmart, which until recently had been a member of ALEC, until it withdrew its membership because it feared more adverse publicity because it sells more guns than any other corporation. The latest Republican fiasco is to eliminate unemployment for workers who have been unemployed for more than a year. This will leave people who have not been able to get jobs in the United States because those jobs have been shipped offshore. Like WallmartMcSrooge, we have RepublicanMcSrooge, a party which has abandoned the Middle Class workers in the United States.