Pension Plans are for Bitches, Not Hoes (Econopimpics III)

As with everything else in this book, this is not to be actually implemented in any way. 

I am Astar, a robot. I can put my arm back on. You can’t. So, play safe.

It is time to debunk some long cherished institutional ideals. In what follows, I tried to explain to Pop Pontius, but I don’t think he had the financial acumen. Either way, he disregarded it. I knew Caesar Slick was incorrigible, so I left him to his own devices. In essence, the idea is that the pimp has no business providing a pension plan for his hoes. It is a product of bad inheritance and flawed ideology.[1] Not only that, but the injury is doubled when it comes to hoes over against mainstream occupations. To see this, we need to mind a few considerations.

 

A ho is in the Game for Cock. Never take your eye off this fact. What you pay her is of trivial importance. That is because she is not doing it for the money. In other occupations the earnings motive is eclipsed at a certain point when job satisfaction takes pride of place. This is when creativity and autonomy license employees and direct their productivity through recognition and self-satisfaction. The difference with hoes is that the earnings motive doesn’t even exist in the first place. Hoes do not really make money. Ever. You see, money is their product, not their reward. They give money, but in exchange they want to be managed. That is their satisfaction. They receive back only in the form of gifts from the pimp. This is like the Big Man culture of Polynesia, but with a twist. This is a different form of exchange and needs to be unpacked.[2]

The Cock = money,[3] and we already saw that the ho needs to give this to the pimp. As the pimp functions through Cock, you have removed the value of money for the ho beyond the gift to the pimp as a sign of love. She gives, but her gift is inferior as Cock transcends money.[4] But to sustain it in its turgidity, she needs to keep pumping it with money. She doesn’t want cock, as such, for money, she wants Cock.

Through Cock, the pimp offers his gift in turn.[5] These are physical gifts such as furs, jewellery, and bruises.  More importantly, they are spiritual gifts. We have already seen this. Cock provides a matrix of identity relations for the ho-movie. It shrives the ho, making her a good ho. It validates the ho, making her life meaningful. This is the pimp’s superabundance, Cock’s fecundity.[6] This is what allows him to give beyond receiving. This further subjects the ho to the ever widening spiral of debt, obligation, and beholdenness.[7] Now she is formulated, sprawling on a pin. [8]   

Considered before, there is another aspect of Cock that should be rehashed. Through the image, mobilized by money, Cock is all-knowing and has an all-seeing eye. It is the image that sustains a social field. An image that permeates society, an image that allows the ho to put her faith in. Cock is always right. Cock knows for the ho. It is both truth and faith. It allows the ho fo shift the burden, to defer. It allows her to empty herself.

This is the opposite of ho-feminism. Under the shadow of Cock, the ho works with samu of Fuke Zen. This is the mindfulness in work and it is what gives her Buddha nature. It allows her to renounce the world of money. It is the abnegation that allows her to work in the moment and accept death when it comes. Kensho/kenosis. Her present and future are in Cock. In these terms, future income is irrelevant.[9]

Not only can you now see how wrong Caesar Slick was, but you can see that hoes certainly do not need pensions. But why, you might ask, are you roundly condemning pensions? Ah, but I am not exactly. A DC (Defined Contribution) plan is fine, if you accept certain premises, but a DB (Defined Benefit) plan is bad, and a TB (Target Benefit) plan is downright evil. Let’s look at a Defined Contribution plan first.

A company that makes dildos should make dildos. Its purpose is to make a profit. This is either used in capital reinvestment or dividended out to shareholders. By definition, this is the surplus that exceeds what is required to meet liabilities. One of the liabilities is the payment of employees for work done. But, it doesn’t exactly do the last one. You see, pensions are deferred wages.[10] This means that wages owed aren’t the same as wages paid. Some is held back in a type of arrears. Sounds odd. However, this is meant to be a good thing. If the employer withholds wages, it is because he is taking them and investing them forward to the period beyond employment. In this way, the employee is protected against himself and financial vagaries. Sounds reasonable, so what’s the problem? The problem begins on the side of the employer, but then it becomes everybody’s problem. It becomes and intrusion in the employer/employee relationship. To what extent depends on the model adopted.

If I’m making dildos, why am I trying my hand at capital markets beyond securing liabilities? If I’m so good at playing the markets, what am I doing making dildos? Shouldn’t I just be a Wall Street institutional investor taking positions in speculative markets, or maybe just be a global investment bank? You might ask, Why defer wages at all? Perhaps the employee should be paid up front for work done, and then they can invest it for their future. Why should I have anything to do with any of this? Good questions, all.

Union pressure and liberal doctrine invented the modern pension. As such, it became a cherished ideal as deeply engrained as home ownership and the universal franchise. How can you question it? Well, if you buy into the idea that deferred wages are agreeable, then DC plans are the most innocuous. Here the employer meets the employee in a contribution split. This is the best performing pension plan because it will live in the immediacy of the market and you do not need infrastructure, actuaries, or the rest of the cumbersome apparatus required to manage this service.

Now in the DC, the volumes can be significant, and the dildo company may access securities at a better rate as an institutional investor, but why is the company getting involved at all? Well, pensions are seen as essential and, if you want to lure the top talent, you need ti have a handsome compensation package. Okay, but this is where the rot starts. From DC we have the move to DB.

DB is a pension that gives you a guaranteed return, but there are many forms and they vary in the manner of their compensation. How does that work? It doesn’t. In order to do it the company needs to hold sufficient assets to meet these long-term obligations. How do you do this? By riskier, leveraged capital for investments. This makes the shareholder equity highly leveraged and subject to volatility. This is phony accounting.  Not only that, but even these fictitious book values are not adequate.

The DB is meant to look to the future in net contributions from employees and taxpayers. This is what they are supposedly holding. But how do you hold a liability? How can I say 5% in the future when I can’t say it in the present? It defies the capital markets.  If I could predict the long-term future, I could predict the short-term future. I can’t. Risky bets on risky securities and interest rates, this also becomes a credit risk. How do you juggle it? You need to keep increasing the contributions. This is what makes it a Ponzi, especially when you are looking at a diminishing work force.[11] Who will be left holding the bag?

The problem is that by presenting it as a guarantee, oe would think it has been hedged. It cannot be. How can you get these interest yields? The cost of borrowing is this interest rate. Not only that, but now you also have the high operation costs for this service. Still, this is not as bad as TBP.

If in DC the employee assumes all the risk, and in DB the employer assumes all the risk, then in TBP you have the worst of the worst. As DBs began to show their flaws, the TBP was born. An even more perverse form of the DB, the TBP looks to an assured return in the future, but it is no longer the company that is at risk. It is the little guy, the employee. How?

TBP presents a moral hazard. Again we are defying the capital markets, but this time we are doing it with the employees’ money. They take the fully loaded cost while risky, if not exotic, assets are invested in on their behalf. In this way, the employee also takes a credit risk. The company must assume some risk, but it doesn’t. Not only that, but the company benefits in another regard.[12] When the returns on investments exceed policy obligations, the company tucks in, taking those surpluses so that when the market swings, there will be less to cover obligations. When it does happen, when the market underperforms, the company bears none of the cost. This is the problem. A security cannot do double duty.

A security cannot compensate the employee for the credit risk he assumes with the employer, that he will indeed get his pension as promised. Also, it cannot compensate the employer for the risk of holding the security, weathering interest rates, and bearing the mortality risk along with the monstrous concomitant managing costs. This is a moral hazard. I am using other people’s money without having skin in the game. This is usufruct. How could the regulators permit this? There isn’t even a prospectus. And you thought pimps were bad people.

How can these pensions be allowed? They shouldn’t. Casinos and insurance companies offer their products by immunizing them through risk management. Beyond that they carry the capital and price the products to cover their bets. The odds are in their favor and, if the business model is correct, the volumes ensure that profit is made by the Law of Large Numbers. It’s a muddle with the other two. DB is blind risk taking. TBP plays with other people’s money in a heads I win, tails you lose scenario.[13]

Pretty horrible stuffy. These pensions should be set on a day-to-day basis as securities move with the markets. How can you design a product that makes promises that blatantly defy the capital markets?

Now you know why Caesar Slick was wrong. But he was wrong on many levels. Let’s look at his operation even before he started thinking in areas well beyond his ken.

 

[1] Can dialectics break bricks?

[2] Or repackaged. With sex and all commerce, it’s all about packaging.

[3] As Kendrick Lamar said, “This dick ain’t for free.”

[4] While embodying it.

[5] *Editorial note* As you will have noticed, ‘gift’ has been used variously. Mauss is apparently a point of inspiration, but there seems to be some confusion.

[6] A type of Church supererogation.

[7] The loads of sixteen tricks, and what does she get? Another day older and deeper in debt.

[8]In a way it is like what Yeats wrote. “By the dark webs, her nape caught in his bill.” The bill is money. She is defined by it and passive to it. Similarly, she makes her bed of his “feathered glory”. What you have to ask, though, is, “So mastered by the brute blood of the air,/Did she put on his knowledge with his power/Before the indifferent beak could let her drop?” Beak is probably an editor’s mistake. I bet Yeats meant bill again, or maybe money, but whatever.

[9] Not entirely so, as we have already noted. The ho does hold out for an endgame scenario where she and her pimp will be on a yacht, sippin’ Moët, and doing pure cocaine.

[10] Deferred in the sense that they are the rightful compensation of the employee. If I wasn’t giving that amount in terms of a pension, it would seem that I feel the need to compensate him to that value outright in his pay. There would be no discussion otherwise. 

[11] Indeed, you kick the can down the road. You depend on continued contributions down the years, down the generations. These can be considered negative reserves.

[12] Definitely not the employee as he also gets hit with double taxation.

[13] As Rosencrantz, or perhaps Guildenstern, or perhaps both said, “heads, heads, heads…” as series run consecutively or concurrently as the occasion demands, entreats, or merely asks. This will become clearer later.