Monday, November 17, 2008

"Will" he say something stupid?

In a way, I feel sorry for George Will. So bound is he to the conservative line that he will forever be frustrated. If we would just try the pure-conservative line for once, something we only approached during the tenure of the great Ronald Reagan, everything would be fine. Alas, there's always something getting in the way of that purity, and so we'll never know the joys that would come from complete laissez-faire.

George has some rather large blind spots, and I've written about that before. He insists that economic crises are simply a matter of psychology, and he's down with Phil Gramm as to how we're a nation of whiners. What's worse is, his knowledge of economics is scant, with only ideology to fall back on. So it was with an element of joy (and not just from me, I gather) to see him getting slapped down by Paul Krugman on yesterday's This Week. It's not that I don't see room for disagreement on the causes and the progress of the Great Depression - in fact, I continue to be amazed at how much disagreement there is - but George's extremely simplistic view comes out of a playbook, not out of actual study or thought.

But where George really stepped in it, at least for me, was when he expressed outrage at auto company retirees being given health benefits before they are eligible for Medicare. He couldn't believe that people should get this when the companies are struggling.

George is wrong in at least two ways, and it requires a suspension of disbelief that he doesn't know either (of course, orthodoxy requires him to take umbrage at this, and we're back in the days of Reagan's fictitious "welfare queens"). First, George's bow tie wouldn't last three minutes in an auto plant. Despite advances in automation, this work is hard and demanding, with an unending load, quotas that have to be met. It's harder work than George could possibly know, even if he thinks he knows physical labor after his summer detasseling corn (actually, I made that last bit up, I doubt he's even done that, but there are a lot of self-proclaimed experts based on a small taste of something). George may think these retirees are enjoying the second house, the motorboat, and maybe there are some of those. But there are a lot more who wake up every morning hoping not to hurt, at least not too much. George Will may never have to retire, but, if he does, it's sailing and a couple of sets of tennis and mai tais at the club.

Second, does George have any idea how many of these workers were "asked" to take early retirement, with the deal being their high salaries get wiped off the books in return for benefits and pension sweeteners? Of course he doesn't. These are items that were promised to these men and women, freely agreed to by the management of these bastions of American power, and now the companies want to avoid having to live up to those agreements. And there's George Will to carry their water, to try to get the American people to feel his outrage that a corporation might actually have to live up to its promises.

I could go on, I could mention the ways in which these workers made different decisions in their lives because those kinds of benefits were pledged to them, and now they face having curtailed their opportunites "for the good of the company" with nothing to show for it. But I don't need to, George Will is just plain wrong here, and I don't need any more reasons to conclude that.


Citizen Carrie said...

Sometimes I wish I had a lot more information at my fingertips. It might be worth noting that in the early 1990's, (when I was working with employee benefits consulting firms), companies all over the country started slashing retiree medical benefits. Several companies (including GM, I believe) lost lawsuits because the courts believed that valid iron-clad contracts existed where retirees would receive medical benefits upon meeting certain criteria.

At that time, we had to rewrite a ton of employee handbooks to add wording to the effect that "The company reserves the write to amend, modify, terminate etc. your benefits whenever we damn well please".

As long as companies have that wording in their handbooks, they can eliminate salaried benefits at will. Eliminating union benefits is a bit more problematic. Regardless, almost 20 years later, retiree groups are still filing lawsuits about the termination or modification of their medical benefits, which shows that we still have a long way to go in establishing enough case law to cover every variation that comes up.

AARP has a good overview.

Long story short - it ain't that easy to cut retiree benefits.

Androcass said...

CC, that's good info. I guess my concern is that the current crisis is providing an "opportunity" to do things that were previously unthinkable. Nationalization of financial institutions and insurance companies might just be the beginning of the changes we'll see in the business landscape if these industries can make the case that they are: 1) essential, and 2) about to fail. Once there is a consensus that the UAW has to open already-agreed upon contracts, the floodgates could open and all kinds of mayhem could result. We've just gone through quite a few years in which a crisis has made the rule of law pretty much dispensable.

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