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View Diary: Bwahahahahahaha! American Airlines and Bain Capital. (282 comments)

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  •  Yeah, but it's still correct... (2+ / 0-)
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    sargoth, Argyrios

    Seriously. Pension plans are a bad idea. The core idea of pensions relies on being able to make positive real returns through investment. But pensions say these returns are certain, when they fundamentally are not. The future is uncertain. And when that uncertainty bites, rather than everyone losing a little (what happens in a 401(k)), the system collapses. Unfortunately, the company usually can't right the situation because labor doesn't want to give up the pension. This usually brings the company down in the process and a lot of people lose their jobs and their pensions.

    Risk is an integral part of investing. You can pretend its not there all you want (as American Airlines workers did), but the simple fact remains that risk exists. Worse, risk will bite you sometimes, and if you don't prepare for that (as a pension doesn't), it will fuck you.

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