BE INDEPENDENT 0 L k.k.L Book A Community Bound By Books. Bookstore Giftshop Coffeehouse 9 am 11 pm everyday 603 N. Lamar 472-5050 shop online at: www.bookpeople.com p ‘,1″….-“oi ‘;’,’,1 ,..’..::..1Z oh we’re out there www.koop.org “anticipated growth in equities is hampered by the lack of corporate governance in the regions’ Hey, Texas, here’s Enron again. And WorldCom, Fannie Mae, Richard Grasso, and the New York Stock Exchange shall we go on? The U.S. homeland is no stranger to problems ofhow do we say this politely?corporate governance? We do not need to learn this lesson the hard way. Let us benefit from those we have forced to go before us. In The New York Times, Larry Rohter reports that in Chile, where the first generation to depend on privatized pension is starting to retire, people are finding that the program is “[f] ailing far short of what was originally advertised under the authoritarian government of General Augusto Pinochet.” The poor do not have accounts large enough to provide the $140 monthly benefit, and middle-class accounts are making up the difference. “Even many middle-class workers who contributed regularly are finding that their private accountsburdened with hidden fees that may have soaked up as much as a third of their original invest mentare failing to deliver as much in benefits as they would have received if they had stayed in the old system.” Then there is Argentina, where privatizing Social Security ultimately played a major role in the economy’s collapse in 2001, after which 50 percent of the population suddenly found itself living below the poverty line. Mark Wiesbrot, an economist at the Center for Economic and Policy Research in Washington, reports that in Argentina: “Social Security privatization deprived the government of a large amount of tax revenue. Payroll taxes that had gone to the government to support the old pay-as-yougo Social Security system were instead diverted to private accounts. As a result, the government lost an amount of revenue that has been estimated at 1.0 percent of annual GDP \(the equivalent of When the Argentine economy suffered a four-year economic downturn, the government defaulted on its debt, capital fled the country, production stopped, and incomes vaporized just like that. This could happen to us. Our gov ernment is up the wazoo in debt and in 2003 borrowed the $138 billion Social Security Trust Fund surplus for the year before to help fund the government. What happens when the $138 billion has to be borrowed from Citibank instead? And finally, let us learn from Nicaragua, where corporate governance issues were almost as unimportant as they are in Houston. This wretchedly poor Central American country makes an interesting cautionary tale. There, the crooked president, Arnoldo Aleman, named his crooked crony, Miguel Aguado, as superintendent of the transitioning pension fund. The wholesale theft of public pensions was temporarily arrested, together with the President, when labor unions denounced the ploy and the Superintendent was obliged to flee the country. At this time we do not know where, precisely, he is, but rumors suggest that he is in Chile, where he is almost certainly not living on Social Security. If Gabriela Bocagrande has anything to say about it, neither she nor Social Security will be exhausted in 2042. Austin Gray Panthers’ Original TALL TALES and LIVING LEGENDS Spellbinding Storytelling by Your Favorite Texas Politicos, with a Silent Auction Tuesday March 15, 2005 6:00 9:0o p.m. Suggested admission $25 Saengerrunde Hall 1607 San Jacinto, Austin TX 512-458-3738; %%WIC gp-austin.org 18 THE TEXAS OBSERVER FEBRUARY 18, 2005
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