Home > Uncategorized > Retirees Are Declaring Bankruptcy at Record Rates… and the NYTimes Overlooks the Main Reason

Retirees Are Declaring Bankruptcy at Record Rates… and the NYTimes Overlooks the Main Reason

August 6, 2018

NYTimes reporter Tara Siegel Bernard’s article in today’s newspaper reports on a disturbing phenomenon: a marked increase in the number of retirees who are filing for bankruptcy. Why? The bottom line for the Times seems to be that the retirees failed to set aside enough for retirement. But the underlying reason is the adoption of shareholder primacy by corporations and, unwittingly, the public who now believes that there is a legal requirement that corporations reward shareholders first and foremost. There is no such legal mandate: it is a mental construct promoted by the libertarian capitalists who want to require every individual to look out for themselves. And the notion of fending for oneself appeals to younger employees who see deductions from their paychecks for things like health insurance, retirement, and especially taxes as confiscatory and stripping them of their liberty. In a society and culture where wisdom and forethought is valued, where the sense of community is more important than rugged individualism, and voters learn from the experience of previous generations, deferred gratification is emphasized and investing in insurances and retirement is important. In a society where intuition and impulse are valued, individualism is more important than community, and immediate rewards are emphasized, investing in the future is seen as foolish.

For readers (and voters) who decry paying for the benefits and pensions of public employees forget, the logic behind the collective bargaining agreements reached in the 1960s and early 1970s was “if the private sector provides it’s employees with pensions, health benefits, life insurance, and time off for training, why shouldn’t public sector employees have the same benefit package?”

There was a time when businesses provided ALL their employees with defined benefit pensions, provided health benefits and life insurance to ALL their employees, and made certain that ALL their employees, from those entering the workforce to those on the brink of retirement, received timely training … but that was before the notion of shareholder primacy took hold in the 1970s.

These bankruptcies are the consequence of adopting the idea that the bottom line that rewards shareholders is more important than the well-being of employees… and as this article illustrates it impacts employees at all levels of our society, except, maybe, those who chose to enter public service and those who are major shareholders.

Developments like the increase in bankruptcies among the older generation should compel us to take a step back and examine the mental formations that created this situation, and have a reasoned and dispassionate debate about the consequences of the policies that led us here. I, for one, believe that the true measure of our society is how we treat those who are most disadvantaged— including those who “failed to plan for the future” or those who suffered setbacks that could have happened to me as easily as it happened to them. And I DO realize that the one of the consequences of this position is that I may have to pay higher taxes… and if that is the case, so be it.

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