August 15, 2005
In the words of Jim Anchower...
I know its been a long time since I rapped at ya, but as a teacher, the first couple of weeks of the school year are hectic.
Before I jump into today's offering, may I offer a hearty congratulations to my arch conservative arch nemesis Ben Hardesty who tied the knot on Saturday and is currently on his honeymoon sipping a mai tai, lounging next to a sunburnt and drink bead-laden beach in Hawaii, assuring his waiter, Kauli, that he is being left no tip not because the service was poor, but because the tourism dollars Ben brings to The Aloha State will one day "trickle down" to the humble server's paycheck.
Anyway, chew on this.
August 15, 2005
Social Security Lessons
By PAUL KRUGMAN
Social Security turned 70 yesterday. And to almost everyone's surprise, the nation's most successful government program is still intact.
Just a few months ago the conventional wisdom was that President Bush would get his way on Social Security. Instead, Mr. Bush's privatization drive flopped so badly that the topic has almost disappeared from national discussion.
But I'd like to revisit Social Security for a moment, because it's important to remember what Mr. Bush tried to get away with.
Many pundits and editorial boards still give Mr. Bush credit for trying to "reform" Social Security. In fact, Mr. Bush came to bury Social Security, not to save it. Over time, the Bush plan would have transformed Social Security from a social insurance program into a mutual fund, with nothing except a name in common with the system F.D.R. created.
In addition to misrepresenting his goals, Mr. Bush repeatedly lied about the current system. Oh, I'm sorry - was that a rude thing to say? Still, the fact is that Mr. Bush repeatedly said things that were demonstrably false and that his staff must have known were false. The falsehoods ranged from his claim that Social Security is unfair to African-Americans to his claim that "waiting just one year adds $600 billion to the cost of fixing Social Security."
Meanwhile, the administration politicized the Social Security Administration and used taxpayer money to promote a partisan agenda. Social Security officials participated in what were in effect taxpayer- financed political rallies, from which skeptical members of the public were excluded.
I'm writing about this in the past tense, but some of it is still going on. Last week Jo Anne Barnhart, the commissioner of Social Security, published an op-ed article claiming that Social Security as we know it was designed for a society in which people didn't live long enough to collect a lot of benefits. "The number of older Americans living now," wrote Ms. Barnhart, "is greater than anyone could have imagined in 1935."
Now, it turns out that an article on the Social Security Administration's Web site, "Life Expectancy for Social Security," specifically rejects the idea the Social Security was originally "designed in such a way that few people would collect the benefits," and the related idea that the system faces problems from "a supposed dramatic increase in life expectancy in recent years."
And the current number of older Americans as a share of the population is just about what the founders of Social Security expected. The 1934 report of F.D.R.'s Commission on Economic Security, which laid the groundwork for the Social Security Act, projected that 12.7 percent of Americans would be 65 or older by the year 2000. The actual number was 12.4 percent.
Despite Ms. Barnhart's efforts, however, privatization seems to be dead for the time being. The Democratic leadership in Congress defied the punditocracy - which was very much in favor of privatization - by refusing to cave in, and the American people made it clear that they like Social Security the way it is.
But the campaign for privatization provided an object lesson in how the administration sells its policies: by misrepresenting its goals, lying about the facts and abusing its control of government agencies. These were the same tactics used to sell both tax cuts and the Iraq war.
And there are two reasons to study that lesson. One is to be prepared for whatever comes next on Mr. Bush's agenda. Despite the tough talk about Iran, I don't think he can propose another war - there aren't enough troops to fight the wars we already have. But there's still room for another big domestic initiative, probably tax reform.
Forewarned is forearmed: the real goals of reform won't be as advertised, the administration will say things about the current system that aren't true, and the Treasury Department will function in a purely partisan capacity.
The other is that the public's visceral rejection of privatization, together with growing dismay over the debacle in Iraq, offers Democrats an opportunity to make an issue of the administration's pattern of deception. The question is whether they will dare to seize that opportunity, when for some of them it means admitting that they, too, were fooled.
E-mail: krugman@nytimes.com
Posted by Nat at August 15, 2005 09:58 AM | TrackBackLet's see:
Polarizing rhetoric? Check.
Blatant misrepresentation? Check.
Detatchment from reality? Check.
Reflexive opposition to anything coming out of the White House? Check.
Compulsive sticking of head in sand? Check.
People, I think we've got a Paul Krugman column here, but I could be wrong.
Posted by: ryan at August 15, 2005 10:39 AMYou want real economic analysis? (you know, the kind with numbers and statistics to back up the claims being made...) Check out Economist magazine. They give an analysis of Social Security (sorry, registration only) that says that it is a disaster waiting to happen (although not as big of a disaster as Medicare) and that privatization would actually mean wonderful things for almost everyone involved (especially low income wage earners).
A little political forecasting: In the next six months, Bush will start pushing tax reform on a grand scale, putting SS reform on the back burner. Most Democrats (including Mr. Krugman) will reflexively oppose it but give absolutely no realistic competing position. In response, Democrats will run advertisements that say "Look at poor Cindy Sheehan. Isn't Bush a meanie?" On the tax reform ticket, Republicans will add to their numbers in Congress and the Senate next November and Bush will have enough political capital to give SS reform another shot. On a larger scale, the Democratic party will continue to slowly sink into political irrelevance with small pockets of support in the media, in academia, and among the dissolving unions (AFL-CIO, teachers unions, teamsters, etc.)
Won't someone talk sense into this party and lead us back to a two party political system? Bill Richardson, I'm talking to you!
Posted by: Matthias at August 15, 2005 01:08 PMFor a complete destruction of this Krugman article, please go to this post on the wonderful Powerline blog.
Posted by: Matthias at August 16, 2005 11:38 AMMatthias, I have a subscription to The Economist, and read every issue cover to cover. When did they ever posit that SS reform as proposed was wise? Was it the columnist Charlemagne? Help me out here- what issue was it?
The Economist is a great way to avoid a Red State/Blue State Slantfest as they aren't in states at all. In the last 2 years they've come out in favor of legalizing most currently illegal drugs, against the war in Iraq, against the teaching of Intelligent Design, appalled at the treatment of Terry Schiabo by politicians and a fascinating seriies of other opinions that don't adhere to a strictly liberal vs. conservative line.
I'm so encouraged that one of you neocons would read something as thoughtful as The Economist, but saddened to realize you just cut and pasted the link from democratsaresatan.com.
Posted by: Jeff Osborn at August 16, 2005 05:06 PMJeff, I'll try to find their support for SS reform in my back issues, it may be a couple days and I apologize for the delay.
By the by, the Economist came out in favor of the Iraq war and have repeatedly insisted it was the right thing to do. Even in the issue where they endorsed John Kerry for president (October 30th - November 5th 2004), they said "Invading Iraq was not a mistake... Saddam's record of deception in the 12 years since the first Gulf war meant that it was right not to give him the benefit of the doubt." (page 9, beginning of the last paragraph)
And I'm sorry if you don't like Powerline blog. They tend to do silly things, like acurately quoting their sources and linking to original documents.
Posted by: Matthias at August 16, 2005 05:49 PMOK, I apologize for not citing chapter verse to back up my claims. I try to be good at that and generally loath people who are not (cough) Krugman (cough). So, here we are: The good folks at the Economist make it clear that something must be done about Social Security. (Under "The Big Enchilada", just keep on reading) This is in stark contrast to Krugman who believes that sand earplugs will work just fine, thank you. Granted, they (the Economist writers) essentially just spit back out what the administration says about private accounts, but they certainly aren't opposed to the idea.
Next, Febrary 10, 2005: "Giving people greater control of their savings is desirable in itself: that is why private accounts deserve their place in this reform. It is wrong that in the world's most advanced economy so many retirees should rely so heavily on the state. That idea is at the heart of Mr Bush's 'ownership society'—and it is worth supporting."
I regret that I don't remember who the columnist was, since I can't find my Feb 15 issue.
Posted by: Matthias at August 16, 2005 06:35 PMMatthias, I still don't see how the article supports the Bush proposal, though it does a nice job of reporting it. My point was that the Economist (IMHO) does a very good job of defending or attacking just about any (sometimes all) sides of an issue, and usually does it in an intelligent, well documented way.
Can I assume you are also a fan of Barrons' Alan Abelson? For my money, he's one of the most interesting, and certainly best written economic pundits we've got.
Posted by: Jeff at August 17, 2005 12:53 PMJeff,
I'm not immediately familiar with Alan Abelson, but I'll start reading his stuff immediately.
I did say that the first article was mostly just a reporting piece, but it is pretty clear that the second piece is certainly in favor of the most lambasted segment of Bush's plan, the private accounts. I do agree that the Economist is one of the most reliable and complete sources of unbiased and clear political and economic analysis and well worth anyone's time.
Posted by: Matthias at August 17, 2005 04:50 PMMatthias, I'm so happy that we agree on something that I can't even tell you what it means. It honestly scares the crap out of me that Americans can be so divided as we all seem to be recently. Half of the US population is not made up of monsters. Neither half.
Posted by: Jeff at August 17, 2005 07:42 PMJeff, I very much feel the same way. Over the summer it has actually been very fun to see where we part company and where we come together. (For example, the Kelo Supreme Court decision, which we both find radically unconstitutional.) And, for what it is worth, I appreciate this forum (kudos to Nat) where we can discuss and debate and I am grateful for yours and Nat's contributions.
I'd also like to publicly apologize for my more snide and offensive posts over the months. I've been trying recently to contribute in a more civilized manner so that the ongoing debates can look more like discussions and less like food fights. I have a talent for biting sarcasm that I'm trying to reign in and I'm hoping that this restraint will make our discussions more profitable.
Matthias, you can have the best of both worlds if you just do it like this- wriite a really nasty, infantile angry rant, including name-calling, and lots of capital letters and look at it and mutter "heh heh heh" and then delete the whole thing before hitting "post".
That's what I do almost every time.
I have occasionally hit "post" rather than deleting it and for that I too apologize.
This is one of the only forums I have where I can try to see "the other" point of view without screaming and ranting. A very dear friend of mine for 20 years is a staunch conservative and we generally avoid discussing politics, but over those 20 years, he's changed my opinion (slightly) on gun control and I've changed his (slightly) on legalizing various narcotics. It took decades of civilized polite discussion between good friends for those minor changes in point of view. I try to keep that in mind in remembering just how little effect most of these discussions actually have on anyone.
Posted by: Jeff at August 18, 2005 09:45 AMOk, I'm back. And I did in fact enjoy a mai tai.
As for social security, I have always found http://www.socialsecurity.org/ to be an invaluable resource.
As for Krugman, I continue to be concerned that you seem to be placing so much confidence in a person who has repeatedly lied, plagiarized, and misrepresented. But you probably already knew that.
Posted by: Ben at August 24, 2005 08:54 AMNat, check out Cato's response to Krugman: http://www.socialsecurity.org/daily/08-25-05.html
Posted by: Ben at August 26, 2005 09:33 AMKrugman has merely been swiftboated. The infidel has been slimed by really shoddy work from nobodies. Who is "Jagadeesh Gokhale"? At least pick a lifelike name for an alleged expert.
Posted by: Jeff at August 29, 2005 09:15 AMJeff, would you care to respond to Mr. Gokhale's actual argument? Or are we just resorting to the ad hominem once again?
Anyways, here is Dr. Gokhale's detailed biography:
http://www.cato.org/people/gokhale.html
Perhaps next time you will do a little bit of research before sliming anyone who happens to have a differing opinion.
Posted by: Ben at August 29, 2005 11:35 AMYou slimed first. "As for Krugman, I continue to be concerned that you seem to be placing so much confidence in a person who has repeatedly lied, plagiarized, and misrepresented. But you probably already knew that."
Mr. Pot has called the kettle ebony.
Posted by: Jeff at August 30, 2005 05:05 PM