Draining Retirement Savings to Build Corporate Wealth


When the watering hole shrinks, human nature often forces the herd to embrace a right-wing political agenda. How sad! Tough times should inspire unity and cohesion. These principles have guided OPSEU with success through some really tough times.

We face a rigged game. The right wing tactically understands that economic hardship frequently triggers a conservative response. So, to bring about a political outcome, they manufacture an economic crisis that will take us there.

As I have said many times before, the labour movement wants for all what we desire for ourselves. That’s our bench mark for building a just and equitable society for everyone.

That is not the mantra for our opposition, a cartel of transnational corporations with their elitist friends. In their world, a different bench mark applies. These forces believe that he who holds the gold shall rule. From recent reports this may be true.

The recent LIBOR scandal demonstrates clearly the stranglehold the rich have on our lives. “LIBOR” stands for London Interbank Offered Rate. It should be the average interest rate estimated by leading banks in London that they would be charged when borrowing from other banks.

That should have been the practice – but it wasn’t. The recent scandal showed it was purposely manipulated to massively juice bank profits.

LIBOR regulates some $350 trillion in worldwide contracts. This amounts to about $50,000 dollars for every human being on earth.

Large banks such like Lloyd’s of London, HSBC and the Royal Bank of Scotland were tied to this interest-rate fixing scandal. And when interest rates are manipulated, that, in turn, affects large pools of money like pension funds. What better way to undermine pension funds than to purposely limit returns through interest-rate fixing?

The impacts can be immediate – and disasterous. For example, one outcome will see many working people employed longer to receive the pension they need, say, to 67-years old. That matches some of the reasons behind pronouncements from our own right-wing federal government. Correct, Mr. Harper?

As for those pesky public sector pensions, made up of our savings and deferred wages, well we just can’t afford those perks. Better yet, let’s force these pensions to be pooled into funds supervised by “professionals” from the “trusted” financial community.

Never! We will fight these changes with all our resources to protect our pensions and the joint trusteeship we bitterly fought for in the 1990s. We will never tolerate allowing so-called professionals, those same folks who manipulated the LIBOR, to destroy our savings.

Let’s look even further. HSBC has set aside $1.3 billion to compensate customers and small business owners for interest-rate hedging. On profits of $12 billion, that’s an awfully small price to pay. We must always remember that part of their profit came from money laundering. Believe it or not, HSBC was caught allowing shady customers from secretive and corrupt countries to move their money around through this international bank. HSBC became a partner in money laundering by moving illegitimate funds into the legitimate economy — like water seeping through a leaky foundation. And that’s the problem. Our foundation, based on the current business model, is broken. Fairness and justice have been replaced by corrupt short-term gain.

And there are other indicators. Reports note that the world’s ultra-rich hold more than $240 trillion in off-shore accounts. Canadian corporations, by the end of 2012, will have more than $520 billion sitting on the sidelines when that money could be invested in building a strong economy.

Some of this cash can likely be traced to taxpayer-funded stimulus money. Worse, money sitting with corporations and the wealthy came from the savings of working people who first produced this wealth.

With real wage growth having stalled for more than a decade, Canadians dipped into savings, equity lines of credit and credit cards to finance everyday life. We pay for this for the rest of our working lives and beyond through interest rates set by the banks. The banks prosper by being the middle men for this elite corporate club.

They have grabbed the cash and hidden it away from the middle class and the needy. Share the wealth? Never! Poor workers do not make rich consumers, so the crisis will continue. Meanwhile, working people will be blamed along with their unions.

Quicksand can be disguised as a watering hole. Greed can be masked as conservative ideology.

And that takes us right back to the first line of this article: when the watering hole shrinks, human nature often forces the herd to run into a hard right turn…

In solidarity,

Warren (Smokey) Thomas, President

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