CJR Daily, Columbia Journalism Review's excellent blog, points to some criticisms of Malcolm Gladwell's New Yorker piece on pensions, mentioned by John yesterday. To refresh your memory, we turn to Paul McLeary's helpful summary:

Gladwell notes in his story that General Motors currently finds itselfbetween "forty and fifty billion dollars behind in the money it needsto fulfill its health-care and pension promises," because the companyhas so many retired workers collecting pensions, and a reducedworkforce that pays into the system. He introduces the concept of the"dependency ratio," which is the number of working people in a companyor nation, compared to the number of retired or unemployed peoplerequiring health care and pensions.

To illustrate the importance of the ratio, he points to the remarkablesuccess of Ireland, which over the past two decades has posted economicgrowth double that of Europe as a whole. The reason? Gladwell writesthat "Last year, Ireland's dependency ratio hit an all-time low: forevery ten dependents, it had twenty-two people of working age. Thatchange coincides precisely with the country's extraordinary economicsurge."

This is a problem, as Jane Galt argues, because Gladwell "attributes Ireland's success as the "Celtic Tiger" to fallingbirthrates, which (temporarily) reduced the dependancy ratio. Heutterly ignores a more parsimonious explanation, which is that Irelandslashed its marginal tax rates in 1987, including a cut in thecorporate income tax to 10%, which turned it into Europe's firstoutsourcing destination."

There's more. Gladwell ties pension woes to increases in productivity--more stuff made by fewer people means the dependency ratio goes all pear-shaped. But, Galt notes, this ignores the fact that making more stuff with fewer people leads to a boost in profits, "allowing companies to pay more benefits using fewer workers; in fact,by decreasing fixed costs such as health care, it should make it easierto support retirees. GM's problem isn't that it's just too darnproductive; it's that it's too darn unprofitable, thanks to foreigncompetition."

There's still much, much more to read at Galt's blog, including an exchange between Zimran Ahmed and Gladwell (and Ahmed's response to the response), conducted on their respective blogs, of course.