FacebookTwitterRedditEmail

Greenspan’s Pension

 

Federal Reserve Board Chairman Alan Greenspan has caused a political furor by calling this past week for a cutback in the benefits that the Baby Boom generation can expect to receive from Social Security when they retire–something that will start to happen in 2011.

Greenspan made this proposal during his latest appearance before Congress, claiming the hit on boomers would be necessary because of the staggering deficits facing the U.S. in the wake of President Bush’s unprecedented tax cuts.

Now aside from the fact that Greenspan failed to suggest to Congress the obvious alternative solution for eliminating those staggering deficits–rescinding the tax cuts that are causing them (in fact he said he favors making them permanent, instead of letting them expire as would currently happen without any Congressional action to keep them)–it seems fair to ask what Greenspan himself is doing about his own retirement.

In fact, Greenspan, who was born in 1926, has been very careful to prepare a very comfortable retirement for himself. According to some accounts, one key reason he left Wall Street and went into government service was for the pension. As the story goes, Townsend-Greenspan & Co, a pension management firm that Greenspan founded, actually did such a poor job of predicting the direction of the market that the enterprise was about to go belly up and had to be liquidated. As one former Greenspan competitor, Pierre Renfret, recalls, ‘When Greenspan closed down his economic consulting business to go on the Board of the Federal Reserve he did so because he had no clients left and the business was going under. We even went so far as to try and hire some of his former employees only to find out he had none for the 6 months prior to his closing. When he closed down he did not have a single client left on a retainer basis.”

According to Renfret, it was the failure of Greenspan’s company that led him to turn to government employment, initially going to work for the Ford Administration, and later taking a job with the Federal Reserve Bank.

Since the early–90s, when he hit retirement age, Greenspan has been cashing a monthly Social Security check that is at the maximum benefit rate–currently just over $1800. That might seem chump change for a guy who’s pulling down a salary of $172,000 a year, but it will rise when his wife, NBC journalist Andrea Mitchell, starts collecting her Social Security and retirement pension checks, too.

Then of course, there will be that fat federal pension check that will start arriving when Greenspan finally decides to step down from his sinecure at the central bank. According to people familiar with the workings of the federal pension program, Greenspan can probably expect to collect close to $100,000 a year in his dotage, making his total personal retirement take just from pension and Social Security about $121,600 a year. Of course, it’s unlikely that a man with Greenspan’s income and background (he’s trained as an economist, worked on Wall Street and is the son of a stockbroker), wouldn’t also have availed himself of the Keogh and IRA tax breaks available to him, which means he must have a sizeable private retirement fund too.

It’s more than ironic–cynical and callous are probably better terms–that a man with these kinds of assets, and who has benefited so handsomely from the New Deal’s most famous legacy, would be out front calling for diminished benefits for the next generation scheduled to begin retiring just after him.

It’s particularly galling that this call for benefits cuts is coming from a guy who contributed so mightily to the mismanagement of the U.S. economy in the late 1990s — mismanagement that led to the collapse of the stock market two years ago, and the needless and wanton destruction of millions of people’s retirement funds. Writing in a Morgan Stanley research report, analyst Stephen Roach says Greenspan, despite admitting in closed meetings of the Federal Reserve Board that there was a dangerous stock market bubble developing, publicly endorsed the ludicrous theory that America has entered a ‘new economy” in which earnings didn’t matter, and failed to advocate any significant measures, such as an increase in margin requirements or a major increase in short term interest rates, that would have deflated that bubble, preventing the subsequent crash.

It ill befits those who are well fed to tell the starving classes to eat less. Neither should those who will retire like kings advocate taking away the meager income of those who will have little or nothing to live on when they are too old to work.

Dave Lindorff, currently on a Fulbright Senior Scholar residency in Taiwan, is working on “This Can’t Be Happening,” a collection of CounterPunch columns and other musings for Common Courage Press.

 

More articles by:

Dave Lindorff is a founding member of ThisCantBeHappening!, an online newspaper collective, and is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press).

bernie-the-sandernistas-cover-344x550
September 16, 2019
Sam Husseini
Biden Taking Iraq Lies to the Max
Paul Street
Joe Biden’s Answer to Slavery’s Legacy: Phonographs for the Poor
Paul Atwood
Why Mattis is No Hero
Jonathan Cook
Brexit Reveals Jeremy Corbyn to be the True Moderate
Jeff Mackler
Trump, Trade and China
Robert Hunziker
Fukushima’s Radioactive Water Crisis
Evaggelos Vallianatos
The Democrats and the Climate Crisis
Michael Doliner
Hot Stuff on the Afghan Peace Deal Snafu
Nyla Ali Khan
Spectacles of the Demolition of the Babri Masjid in Uttar Pradesh and the Revocation of the Autonomous Status of Kashmir
Stansfield Smith
Celebrating 50 Years of Venceremos Brigade solidarity with the Cuban Revolution
Tim Butterworth
Socialism Made America Great
Nick Licata
Profiles in Courage: the Tories Have It, the Republicans Don’t
Abel Prieto
Cubanness and Cuban Identity: the Importance of Fernando Ortiz
Robert Koehler
Altruists of the World Unite!
Mel Gurtov
Farewell, John Bolton
Weekend Edition
September 13, 2019
Friday - Sunday
Paul Street
The Age of Constitutional Coups
Rob Urie
Bernie Sanders and the Realignment of the American Left
Anthony DiMaggio
Teaching the “War on Terror”: Lessons for Contemporary Politics
Jeffrey St. Clair
Roaming Charges: They Are the Walrus
T.J. Coles
Jeremy Corbyn: Electoral “Chicken” or Political Mastermind?
Joseph Natoli
The Vox Populi
Sasan Fayazmanesh
The Pirates of Gibraltar
John Feffer
Hong Kong and the Future of China
David Rosen
The Likely End to Roe v. Wade?
Ishmael Reed
When You Mess With Creation Myths, the Knives Come Out
Michael Hudson
Break Up the Democratic Party?
Paul Tritschler
What If This is as Good as It Gets?
Jonah Raskin
Uncensored Tony Serra: Consummate Criminal Defense Lawyer
Ryan Gunderson
Here’s to the Last Philosophes, the Frankfurt School
Michael T. Klare
The Pompeo Doctrine: How to Seize the Arctic’s Resources, Now Accessible Due to Climate Change (Just Don’t Mention Those Words!)
Luke O'Neil
I Would Want To Drink Their Blood: God Will Punish Them
Louis Proyect
The Intellectual Development of Karl Marx
Tom Clifford
How China Sees the World
Kelsey Hawkins-Johnson – Negin Owliaei
Who’s Burning the Amazon?
Yasin Khan
Rideshare Drivers are Employees, Not Contractors
Ralph Nader
Big Business Lies Taught a Watchful Donald Trump
Binoy Kampmark
The Sacking of John Bolton
Andrea Maki
Wild Love Preserve Founder: Our Path Forward
Jeremy Kuzmarov
The War in Eastern Ukraine May be Coming to an End But Do Any Americans Care?
Tim Davis – Stan Grier
Protect the Sacred Grizzly Bear, Follow Those Who Know Grandmother Earth
Clark T. Scott
Super-Delegated and Relegated
Jim Britell
Lessons From America’s Greatest Grassroots Campaigns 
Howie Hawkins
Workers Need More Rights and Economic Democracy
Ramzy Baroud
‘Justice is Indivisible’: Screams of Israa Ghrayeb Should Be Our Wake-up Call
Jill Richardson
It’s Not About Your Straws and Your Light Bulbs
FacebookTwitterRedditEmail