<p>Actually, my belief is that 1. there is no retirement age, so profs cannot stay on way past retirement age. Blame Congress and the fed for that, not the universities.
2. profs do go on doing research and teach one course, usually at the behest of the universities who need them to supervise graduate students so they are not left in the lurch. I do not believe that these profs draw a full salary. I know some people who would dearly love to be able to pack up and leave and go abroad (to do further research) but are staying on until their last graduate students have finished their Ph.D.s
3. With tenure, profs cannot be fired for economic reasons unless the university claims financial crisis. This is something that most universities are loath to do because it hampers their ability to raise funds and get themselves out of the crisis. So there is no political cover to be had. I’d be interested to see Harvard claiming financial crisis to lay off faculty when its endowment, shrunken though it is, is still in the $20 billion range.:)</p>