What happens after privatizing the pension system?

sparzeichenThe pension reforms of the years 2000 until 2007 were supposed to attenuate the foreseeable effects of demographic change on the pension system. This is why the retirement age was raised, the pension level was lowered and a so-called sustainability factor (“Nachhaltigkeitsfaktor”) was introduced into the pension formula. This approach meant a fundamental change of objectives – from safeguarding living standards in retirement to the stability of contribution rates. The lower future pension level is to be complemented by the subsidised formation of a private capital stock (“Riester pension”) without employer participation. The analysis of the macroeconomic consequences of this reform shows that the chosen policy of enhanced funding both dampens growth and leads to insufficient income in old age. Thus the current strategy is not suitable for alleviating the demographic burden. Read more (in German language)

Doug Henwood: Nationalize the Banks!

Doug Henwood delivered ”Nationalize the Banks! What Does it Really Mean?,” on a panel organized by the Socialist Register, at the Left Forum, New York City, April 19, 2009:

“The title of our session reminds me of that glorious week in Seattle back in December 1999. At that time, and for a little while afterwards, it seemed like a new movement had been born, and there was some real potential for transforming, or even overthrowing, capitalism. One of my favorite chants of that moment of carnival came from the unfairly maligned Black Bloc: “Capitalism? No thanks! We will burn your fucking banks!” Not constructive, perhaps, but inspiring nonetheless.”

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State-owned Wealth Funds (SWFs)

texte-51_250_01.jpgWestern politicians, business leaders and commentators seem paranoid about state-owned sovereign wealth funds (SWFs), particularly those from the Middle East and China. They fear that SWFs follow strategic political objectives — investing in Western companies and banks to secure control of strategically important industries such as telecommunications, energy and banking — rather than commercial interests. Read more