| Imagine this: You live somewhere, anywhere, in | | | | whom those supposedly greedy people at AIG |
| the USA and on Saturday morning you and your | | | | were making big money, now you know - |
| partner set off to do some errands. | | | | California public employees, along with millions and |
| First, you stop at an Exxon station and gas up | | | | millions of other government and private sector |
| your car. Once again, your partner complains | | | | members of pension plans and mutual funds. |
| about the high cost of gas, and the outrageous | | | | Assuming they still own a lot of AIG shares, all |
| profits of oil companies. But, you explain that | | | | these working Californians have to hope the AIG |
| California's public employees, among and millions of | | | | survives - if not, it will mean a hit to their pension |
| other working Americans, in every state, | | | | funds. |
| appreciate your business. The California Public | | | | Now, you may not work for the State of |
| Employees Retirement System (CalPERS) owns | | | | California, you may not even live there. But, |
| millions of ExxonMobil shares, and Exxon's | | | | you're likely in the same boat, for better or for |
| corporate profits help pay for their pensions. | | | | worse. Whether you live in the U.S.A., Australia, |
| Next. you're off to Wal-Mart to pick up a couple | | | | Chile, or a hundred other countries around the |
| of things for the garden and house. As you swipe | | | | globe, your non-government retirement income |
| your credit card to pay, California's public | | | | depends in large part on corporate profits. |
| employees thank you again. Their retirement fund | | | | If you live in Canada, both your government |
| owns millions of Wal-Mart shares, and each time | | | | pension and your non-government retirement |
| the company earns a profit on a sale to a | | | | income may be affected by corporate profits. A |
| customer, a portion of that flows to them. | | | | few years ago, the government agency that |
| Of course, the piece of the profit they get from | | | | manages the government pension plan began |
| your $20-dollar purchase would be miniscule. But, | | | | investing in corporations to help fund the Canada |
| California public servants are getting an tiny bit | | | | Pension Plan and Old Age Security. So essentially |
| from every one of the billions of purchases made | | | | all Canadians now depend, to a greater or lesser |
| at Wal-Mart, and they own millions of shares, so | | | | extent, on corporate profits for retirement |
| they end up with a sizable injection of Wal-Mart | | | | money. |
| profits into their pension fund. | | | | Maybe you don't belong to a pension plan, maybe |
| Next, you visit the travel agent, to finalize your | | | | you have to invest in mutual funds. Well, you're in |
| vacation plans. After booking flights on Alaska | | | | the same boat. Regardless of country, your |
| Airlines, California's public employees thank you. | | | | retirement income depends on corporate profits, |
| They own shares in Alaska Air Group, which | | | | and for two reasons. First, companies that make |
| operates Alaska Airlines, and share in the | | | | a profit can pay dividends to the owners, including |
| corporate profits. | | | | those of us who contribute to pension funds and |
| By now, you're feeling hungry; your partner | | | | mutual funds. Second, shares in profitable |
| suggests burgers at McDonald's. Would you be | | | | companies may be sold for more than they cost, |
| surprised to learn that California public employees | | | | allowing pension funds and mutual funds to sell |
| own McDonald's shares as well, and share in the | | | | those shares for a capital gain (a capital gain is the |
| profits from McDonald's? Look in a recent annual | | | | difference between the price at which you buy a |
| report from CalPERS and you'll see it owned | | | | stock, and the higher price at which you sell it - if |
| shares in exactly 4,656 American companies on | | | | you sell it at a lower price, then you have a |
| June 30, 2007. The fund also holds millions of | | | | capital loss). |
| shares in companies in other countries, bonds | | | | If you're trying to make sense of modern, |
| (basically loans to corporations and governments), | | | | middle-class capitalism, start by recognizing that |
| and other investments. | | | | most big corporations belong to working people, |
| Here's another point that recently became one of | | | | through their pension funds and mutual funds. |
| public interest. As of June 30th, 2007, our public | | | | Forget the old class warfare slogans, and the left |
| service friends in California owned almost a billion | | | | wing bumper sticker logic. We workers are also |
| dollars worth of shares in American International | | | | owners in the world of modern capitalism, and |
| Group, or AIG, the company that's in the news | | | | addicted to corporate profits for much of our |
| so much these days. If you've wondered for | | | | retirement incomes. |