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The Supreme Court's recent decision in Philip Morris USA v. Williams, while a temporary victory for the liability-beleaguered tobacco industry, brought to mind one of my favorite pet conspiracy theories.
In 1999, the U.S. Department of Justice filed a lawsuit against nine tobacco companies, alleging massive civil racketeering violations involving a decades-long conspiracy to misrepresent the health risks of smoking while marketing to children. The most recent ruling in this case is a 1683-page screed by U.S. District Judge Gladys Kessler, detailing a half-century's deadly mendacity.
In the midst of all this, I began to wonder: why would our nation's corporate rulers allow their bought-and-paid-for government to attack an industry that they had paid through the nose with 50 years' campaign contributions to keep out of FDA regulators' hands?
But then I came across an interesting statistic: in 1985, 89% of Fortune 100 companies offered "defined benefit retirement plans." That's fancy-talk for the kind of pension arrangement your grandfather had: come home from World War II, get a job and keep it for 40 years, then retire to Florida on the company's dime. By 2004, that figure had fallen to 50%, and most of those plans were available only for existing employees. Start almost any job now, and the risk and responsibility of your 401(k) is on you.
And then it all became clear. What is the great social utility of tobacco? Most of us can smoke it for about 50 years--from our teens into our sixties--with minimal effect on productivity. And then, a year or two past retirement age, tobacco flips a little switch inside of us, and our pension liability disappears conveniently from the balance sheet.
For as long as worker longevity remained a drain on the bottom line, it was worth corporate America's investment in government to keep tobacco cheap and unregulated. But as labor lost its bargaining power, the companies found a more direct way to shed their longevity-risk-hedging burdens--dump pensions in favor of today's "defined contribution" plans. Now that shareholder value maximization doesn't turn on whether retirees kick the bucket at 68 or 98, buying off the government produces little return on investment.
In 1999, the U.S. Department of Justice filed a lawsuit against nine tobacco companies, alleging massive civil racketeering violations involving a decades-long conspiracy to misrepresent the health risks of smoking while marketing to children. The most recent ruling in this case is a 1683-page screed by U.S. District Judge Gladys Kessler, detailing a half-century's deadly mendacity.
In the midst of all this, I began to wonder: why would our nation's corporate rulers allow their bought-and-paid-for government to attack an industry that they had paid through the nose with 50 years' campaign contributions to keep out of FDA regulators' hands?
But then I came across an interesting statistic: in 1985, 89% of Fortune 100 companies offered "defined benefit retirement plans." That's fancy-talk for the kind of pension arrangement your grandfather had: come home from World War II, get a job and keep it for 40 years, then retire to Florida on the company's dime. By 2004, that figure had fallen to 50%, and most of those plans were available only for existing employees. Start almost any job now, and the risk and responsibility of your 401(k) is on you.
And then it all became clear. What is the great social utility of tobacco? Most of us can smoke it for about 50 years--from our teens into our sixties--with minimal effect on productivity. And then, a year or two past retirement age, tobacco flips a little switch inside of us, and our pension liability disappears conveniently from the balance sheet.
For as long as worker longevity remained a drain on the bottom line, it was worth corporate America's investment in government to keep tobacco cheap and unregulated. But as labor lost its bargaining power, the companies found a more direct way to shed their longevity-risk-hedging burdens--dump pensions in favor of today's "defined contribution" plans. Now that shareholder value maximization doesn't turn on whether retirees kick the bucket at 68 or 98, buying off the government produces little return on investment.
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