Executive Intelligence Review
Subscribe to EIR

PRESS RELEASE


New Yorker Fraud on Pensions Crisis:
Publishes Its History According to Lazard Bank and Wilbur Ross

Aug. 27, 2006 (EIRNS)—New Yorker magazine's long Sept. 1 article on the disappearance of defined-benefit pensions, "The Risk Pool" by Malcolm Gladstone, is an apology for, and by, the deindustrializers and outsourcers of U.S. industry of the Lazard/Rohatyn type, including in particular, Rothschild, Inc. veteran and vulture capitalist Wilbur Ross. The piece is an ill-disguised apology for the globalized economic and trade system, just as that system approaches an extreme collapse which could lead to global fascist cartels. It remains to be seen if the New Yorker will publish a letter by steel industry historian Mark Reutter, confronting the frauds in the article and the coverup of Wilbur Ross's crimes.

The basic message of Gladstone's piece is that individual firms' pension and health-benefit promises could never be kept, because of changing demographics of their workforce; and that these changes (drastic shrinkage of active industrial workforces) are the result simply of technological progress. Globalization and outsourcing are never mentioned, nor are shrinking investments in public infrastructure or new industrial capacity in the era of globalization. The two main sources of wisdom cited by Gladstone on this demographic impossibility of pensions, are corporate looter Wilbur Ross, and United Steelworkers official Ron Bloom. Gladstone conceals that Bloom was a banker-protege of Felix Rohatyn at Lazard Freres during the Big MAC period in New York, then converted into a labor official and promoter of worker buyouts—the often-disastrous employee stock-option plans a la United Airlines. Gladstone also covers up Wilbur Ross's actions after Ross—according to Gladstone—brilliantly turned around Bethlehem Steel to profitability between 2001 and 2003, simply by his supposed superior knowledge that its problems were neither industrial nor corporate, but "demographic."

Reutter, who is repeatedly misquoted and mis-cited in the article in the service of it fallacies of composition, has confronted the New Yorker in a letter--specifically, for its coverup of what Wilbur Ross's operations with Bethlehem and LTV Steel companies after 2003, did to those firms' retirees' pensions and health benefits.

Reutter writes:

"Rather than investing in new machinery or seeking new markets for steel, Mr. Ross flipped the properties to London-based industrialist Lakshmi Mittal in April 2005, gaining a personal profit of $267 million. Together with stock earnings from the initial public offering of his company, International Steel Group (ISG), and related trades, Mr. Ross and his Wall Street allies pocketed $1.185 billion. This sum is almost identical to the $1.1 billion that steel retirees lost over the same period in health-care benefits from the sale to Ross and the sum absorbed by the Federal government's Pension Benefit Guaranty Corporation. Rather than saving the steel industry by ending unsustainable retiree benefits, Mr. Ross ingeniously diverted the cash flow from the working class to the investment class."