Tuesday, December 13, 2005

Don't Know Much About History

Did John Murtha fail history?
Murtha offered a rebuttal to Bush's comparison to the American experience. "If they'd have kept the French here after 1776 . . . we'd have thrown them out," he said. "And that's what I say about what's happening in Iraq right now. The Iraqis are not against democracy. They're against our occupation."
As anyone who stayed awake in class should know, it was Gates' victory overy Burgoyne at Saratoga (obviously that battled was fought after the July, 1776 Declaration) that convinced the French they should support us. They landed in Newport, Rhode Island in 1778.

I am always shocked that our elected Representative know so little about the country and its past. And that applies to all parties.

Monday, December 05, 2005

Village Voice Has Half the Story

Interesting take on 401(k) plans and pensions in the Village Voice. The article notes that people lost up to one third of their accounts in the Nasdaq crash. What it leaves out is that the stock market has regained most of its losses (Dow from 11k to 7.2k back to 10.8k today). People who continued to contribute to their plan probably have a gain because they bought more shares at lower prices than at the 11k level which the Dow only touched briefly.

The article also bemoans the loss of "guaranteed" monthly pension checks. Funny, but those arguing for DB plans and Social Security never seem to ask what the cost of that monthly check is. You know, if you are so disposed you can use your 401(k) balance to buy one or more annuities (those monthly guaranteed checks). No one is stopping you from doing so.

The problem with DB plans for many people is that they do not stay in one job long enough to vest in a significant benefit. At least with a 401(k) plan you can consistently build your retirement savings from job to job without having to start over.

Even Clinton-administration refugee like Alicia Munnell admits that the expected benefit under the two types of plans will, on average, be the same, though an individual's mileage may very (see her book). People who stay in one job for life will be better off in a DB plan, those who move around will benefit best from a 401(k).

Oh yes, you can also choose to take your DB plan balance as a lump sum if you so choose; that would be like, you know, a 401(k) plan.

Bloomberg Goes to the Dogs

Workers Paradise ... Yeah Right

What happens when you cap gas prices? It looks like employees will steal the gas. And then you have to call out the army...