Friday, October 22, 2010

Hey, What's the Matter With France?

Plenty. This story from Yahoo breaks down the situation, in which there are dire fuel shortages, infrastructure blockages, and threats of much greater civil unrest over this central tenet of pension reform: upping the benefits-collection age from 60 to 62.

Of course, there are all kinds of conspiracy theories to go along with the proposal, such as the idea that it's a first step in someone's Master Plan to start stripping away all benefits from all workers (slippery slope, eh?), or that it's a targeted way to stick it to blue-collar employees.

Nowhere in all the chanting, the sloganeering, or the screaming that are visible to us (well, at least when our news networks are taking a break from bullying in schools or the war on cholesterol), is anyone talking about intelligent ways to keep the math equation working as waves of workers retire and there just aren't enough young workers to keep the Ponzi scheme working.

I know this is starting to turn into a hobbyhorse of sorts for me, but who cares? I think it's important enough to keep mentioning how scary it is to me that we could be sliding towards something like this in the States.

Regardless of how you self-indentify politically, I'll assume that you "care deeply about the future of the country." If asked on a poll, who would disagree with that? No one, and that's why I'll assume you wouldn't, either.

Well, the lesson that keeps popping up across the Pond is that when you engineer generous public-sector benefits package (even with perfectly good intentions) you might be creating an unsustainable monster. Once that happens, if people were able to recognize that monster, and then calmly, coolly, and rationally step away from it, this wouldn't be such a big deal.

But where is the calm rationality in all these French protests? WHO is answering the question about why you wouldn't want to *slightly* tweak benefits for one generation of workers in order to keep an entire system sustainable for generations down the road?

It just scares me a little bit that more of these French unions aren't seeing it that way.


kad barma said...

I do not find strident expressions of self-interest on the part of the citizenry to be in the least troubling. In fact, were we here to enjoy this sort of grassroots indignation whenever the government and big business acted to screw us, we likely would not be bearing this crushing federal debt, and experiencing the dire economic circumstances that have put one out of seven americans below the poverty line.

We're mostly chagrined that somewhere else in the world a society is wealthy enough to support retirement at what seems to us such a young age. We here can't afford to get anywhere close, and our presumption has to be greed and indolence.

It's quite possible it's an expression of patriotism in its truest form, and the reason they get to retire is that they've not caved in over there to the corrupt political and commercial robber barons who hold sway over here.

All that being said, yes, agreed there's a balance between generations that must be struck. I'm just amazed at how little attention we've paid to the massive fraud against our treasury that will have us all working here until our dotage and beyond.

C R Krieger said...

I agree with Kad, up to a point.  The French had gotten themselves into a bit of a pickle due to the generous vacations, etc, and then one recent summer, during a heat wave, a lot of elderly died because the system failed.  Not good.

Then there was the other side of this, in the May 1958 crisis, when there were not just street riots but the use of plastic explosive (when it was still new).  Put it on the muffler and when the engine starts it slips off and the string pulls the pin and the car goes boom.  But, that was the Army, paramilitary groups and Pied Noirs and de Gaulle coming back into power.  Then there was 68, and de Gaulle rolled the dice and won (352 of 487 seats in the National Assembly), but then he retired the next year.

1848, 1968, 2010?  Maybe another memorable year, but with demographics being destiny, 60 is way too young an age for folks to be retiring, in France or in Massachusetts.  Heck, 68 is too young.

Regards  —  Cliff

Kim said...

I think the people of France are absolutely correct in their response to pension changes. Do I agree that raising the retirement age to 62 is too high. Not at all. The lesson I take away from France is that the people who depend on social security here in the US, will be hurt the most by raising the retirement age to 70. They will be the ones getting reduced benefits because let's face it, very few regular people can actually retire that old and there are a lot of people who don't have pension plans. Are there changes needed,sure but they include an increase in the income level for social security taxes and a better means testing for who need full retirement benefits.

The New Englander said...

Thanks for adding all those points...and Kim, I agree 100% about lifting the income ceiling on Social Security (currently 106,800). We did it with Medicare and that has helped keep that system afloat. As it stands now, the Social Security tax is extremely first from a fairness angle, but second from a program solvency angle, it seems like allowing income above the current 106.8k threshold to be taxed for Social Security is the right thing to do.