Much Obliged

“Much obliged” is a term that historically refers to a statement made by someone receiving a favor from someone else. It infers that the first person is now obliged to return the favor at some future point in time.

I’m going to bend that phrase a bit by interpreting the “obliged” as an obligation (or promise) made by one person (or entity) to another. And the more numerous the obligations the more appropriate to use the word “much”.

The public and private sectors alike have made promises to those they employ to ensure an uninterrupted effort in providing a particular service. You know the drill: pay, benefits, and so on. And a big part of the benefits package was the pension that all the worker bees could plan on receiving after dedicating a career to the Golden Goose.

It has now become almost ordinary to read that some company or municipality has chosen to abrogate those pension promises through the bankruptcy courts or, at least, the threat of such legal action. And you know this drill, too: “We can no longer guarantee lifetime payments to an ever expanding number of retirees when our workforce has remained stagnant or decreased.”

Economically, it makes sense. But an obligation is an obligation, isn’t it? Apparently not and the biggest source of angst is the fact that both sides (labor and management/politico) knew that it was unsustainable when they signed it! And they also knew that they would both be lounging on a beach somewhere when the house of cards came crashing down. And, in an effort to make up the shortfall, those charged with keeping the pension funds reasonably secure chose to invest in riskier opportunities that resulted in even greater losses when the bubble burst.

“Well, it serves labor right, you know. I’m not a union person, anyway.” Yet another opinion voiced all too often today. But our system is rife with similar obligations: how about Social Security? Or Medicare? These, too, are unsustainable as more retirees look to a shrinking workforce to fund the promises made in the past.

No, we all have a seat on this boat regardless of our age, income, or social standing. But what to do about it? Well, the popular thing is the aforementioned bankruptcy option for corporate America while city, state, and federal legislators seek to redefine and readjust obligations that they no longer care to honor. Bankruptcy, too, is in their bag of options and we have seen cities waltz down the aisle to that tune, too. And that’s bad for a number of reasons.

First of all, many folks have planned their lives around the promise of a set amount of dollars coming in every month. They’re not greedy nor selfish. They simply operated in good faith and expect that the quid will appear for their quo. Now, at the last possible moment, that revenue stream may be curtailed if not eliminated altogether.

In addition, and perhaps more important, a message is sent that past promises can be ignored when times change. “Kings X...and my fingers were crossed, to boot!” How can we expect the next generation to have any grasp of integrity or ethics when they watch their elders routinely disregard pacts that were made in good faith, but ignored when it became expedient? And we wonder why the kids today seem to have no respect for established institutions or figures of authority.

While pension obligations and such should still be adhered to, the fact remains that the systems under which they exist must be altered. Forward thinking leaders in the private sector (both labor and management) have recognized this and adopted new agreements that provide for limits on pensions while offering self-funding options. Different? Yes. Not as lucrative? Perhaps. But, if given enough advance notice, manageable. So we grandfather everyone within, say, 10 years of retirement and then slowly reduce the guarantees available to the younger workers. Graduated through the ranks of the workforce, significant cost reductions can be achieved without cutting the legs out from underneath anyone.

The public sector, unfortunately, relies on political will (i.e. leadership) for such changes to the various pension provisions and social programs. Such leadership has been in short supply of late and the political polarization we currently see gives little hope for progress.

Answer this for me: in any given stalemate with your spouse or your kids or your boss has a mutually agreeable solution ever been found in one of the extreme views held by one participant? I doubt it. No, the answer generally lies somewhere in the middle. No one can declare outright victory, but no one is left holding only shitty end of the stick, either. Compromise, in other words.

Maybe instead of voting for far left or far right candidates, we should seek out those residing more to the middle of the road. They are the ones most prone to find a reasonably amicable solution to the financial challenges faced by every citizen. We’ve all got a dog in this fight, folks. Let’s remember the myriad of obligations while finding ways to adapt to tomorrow’s reality. Unless, of course, you’re not interested in progress. Then just stand in your corner, holding your breath, and giving the guy in the opposite corner the finger. That should solve our problems now, shouldn’t it?