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Men in the Street; the Woman in Washington

According to Louisiana’s column-writing ex-convict ex-politician, many Louisianans are concerned about the privatization of Social Security. Let me be of some assistance:

"You know, even I know that Social Security isn’t just a retirement program. I don't have any disability insurance. If something would happen, even before I'm 65, all I would have to turn to is Social Security. I just feel like I'm taking too much of a chance if everyone makes their own decision as to how to invest their money." – hardware store owner

Uh, the federal government already takes care of that. It’s called Social Security Disability Income, payable to anybody without means-testing or age qualification upon becoming too disabled to work full-time or at all. Pres. Bush didn’t say anything about changing that. If you qualify for that, you also qualify for Medicare which, unless you are severely disabled, will pay for almost everything you’ll need and, in a year, will include prescription drugs as well. Pay additionally for Medigap insurance and, except for severe cases, there will be little to pay for out-of-pocket.

And, if anybody knows who this owner is, better do your shopping at his place before it goes bankrupt, which sounds like pretty soon because this guy feels like he’s “taking too much of a chance if everyone makes their own decision as to how to invest their money.” How did he get to running a business with that attitude and level of confidence?

"I have a hard time keeping my bank account straight and balancing my checkbook each month. How am I gonna be able to figure out how to invest the little money I have? Do I have to go get me a financial planner?" – truck driver

No, Pres. Bush in his State of the Union address said it would be as simple as indicating one fund and one amount of money to be diverted from taxes already taken from your paycheck (or, like the owner above, if you have the misfortune of being self-employed, taken out of your earnings or profits). You won’t even have to do it, and the few funds offered all will outdraw the return the government has provided on Social Security since its inception. Except for the very shortest terms, any stock fund of quality equities or bond fund of high-grade debt has beaten the government’s return over Social Security’s history. And again, if you like the meager 1.8% return the government has provided, less than the average certificate of deposit, you don’t have to divert anything.

Even if this guy is no good with numbers, at least he can still do well enough with them to drive a truck. On the other hand, this guy, given his understanding of how the world works, I don’t think I would buy a policy from:

"When anyone buys insurance, they don't tell the insurance company how to invest their proceeds. They are expecting the insurance company to get the best possible return. Why can’t the government get the best possible return? Does the average person have to become a financial expert, and start studying the stock market every day? If the system is broke, and the government is inept, what are we sending all those fellows up to Washington for? Why can't they straighten all that out?" – insurance agent

Because that’s the way government bureaucracy works! One of the great con jobs in recent years is this idea that we can “reinvent” government to make it work more efficiently. But you can’t paint stripes on a horse and call it a zebra: by its essential nature, government is inefficient and wasteful with resources (one-third wasted, according to the Grace Commission). Without a profit motive and the threat of going out of business, it has no incentive for its millions of employees (who work for good wages with little chance of being fired no matter how poorly they perform) to use resources most wisely – and they can always make up for it by higher taxes or unlimited borrowing. So to ponder why government can’t get a return comparable to the private sector displays absolute sheer ignorance of the difference between the public and private sectors – and why privatization of some Social Security funding is vital.

Still, at least our men-in-the-book-tour have more on the ball than this person:

"I don't want to undermine a strong system that has worked well. We can strengthen it without privatizing it."

What planet is this person from? Didn’t she listen to the president’s speech? Or at least read the dire actuarial forecasts for Social Security without reforms (and Bush didn’t even tell us that, in reality, the fund for Social Security was raided long ago, really necessitating the need for reform and reform now). Or perhaps she wants to hike your taxes and cut your benefits relative to today’s levels because that’s the only way this problem is going to get solved, short of an apocalypse that recurs on a continuing basis that wipes out only people just becoming eligible for Social Security benefits.

Who is this person?


Anonymous said...

I find your editorial on the privatization of Social Security to be very condescending in tone. Not everyone has the obviously superior intellect that you have, or enough blind faith in Dubya to accept his grand vision without question. However, that doesn't give you the right to make a mockery of their concerns for the future.
There are still people around who remember the Great Depression of the 1930's and what it was like to struggle for their next meal. These same people will be affected by whatever changes are ultimately made to the Social Security system, and their concerns are justified. Instead of taking shots at them in order to sound pithy, you should respect them and what they endured. Their opinions are just as valid as yours... even more, as far as I'm concerned.

Jeff Sadow said...

I know a couple of people I think you were referring to. They're my parents, and they don't disagree with the philosophy behind the president's proposal on this one. They're part of the 54 percent of Americans showed by the recent Pew Center poll who do so.

Of course, recall that Bush said anybody over 55 would be locked into the system as is and I don't think anybody that the ex-con talked to was that close to retirement age. Thus, the "Depression generation" is well clear of any of these changes. But how sharp do you have to be to make a choice to continue in the system or not? Or, if you do decide to invest some of it privately, to choose one fund out of, maybe, five? When this happens, I'll bet the instructions and advice for it will be simpler than what you see on a 1040-EZ.

I guess the point of the column kind of went over your head ... the idea of privatizing a portion of Social Security and giving people greater choice is no rocket science. The only people with a vested interest in trying to make it sound complicated and dangerous are those with a vested interest in keeping the bankrupt system the way it is -- liberals, bureaucrats, and those who prefer to control Americans' earnings rather than let Americans control their own.

Which leads us to Louisiana's senior senator. There is no way, having been our state treasurer for 8 years, that she does not understand this. Therefore, she must prefer demagoguery on this issue because she does not want to give up even the smallest of government's control over people's resources.

That was kind of the ex-con's objective, too. He loaded the column up with these examples, as a sideways attempt to show how much opposition and problems there are with the idea. But in the final analysis, the only thing he showed is that if these attitudes are common among Americans, what the president will need is a nothing more than getting some information out (over the whine of the Landrieus) to calm their fears. Which is what I did, in a different way.

(Still, you have to be kidding me on some of these things ... a small business owner afraid to invest his own money -- what's he been doing in his business all these years? An insurance agent -- regulated by government -- who doesn't understand the natural inefficiency of government? You don't have to have an M.B.A. or Ph.D. to overcome their fears or ignorance about this idea -- again, the point of the column.)

Anonymous said...

Actually, your column didn't go "over my head", to use your words. I don't have a problem with your position on the issue, just the way you presented it. You, like most conservative Republicans, assume that those who don't share your opinion must be liberals and therefore must be stupid, because it's the only opinion of merit. It seems as though the days of having a spirited debate while still respecting our opponent's opinion have somehow fallen by the wayside. Maybe it's the result of talk radio or the internet, where you never meet the person you are addressing face to face. Maybe it's the result of the fast pace we live in. Whatever the reason, I think it's a shame that we as a society have lost our etiquette and choose to take the low road. That is what I was commenting on in my previous post.
Just something to think about.

Jeff Sadow said...

I think you're creating a straw man argument here. Again, the larger point of the column was that the opposition to the idea either was by ignorance (the MITS) or partisanship (Landrieu and Brown). Ignorance can be allieviated by fact; the other will change only if those who fear the plan out of ignorance overcome that, and then put political pressure on those opposed despite their broader knowledge. The use of sarcasm was to highlight the absurdity of the fears in the MITS, and to strip naked the pure partisanship of the others.

That makes the sarcasm necessary in the column; perhaps harsh, but relevatory at the same time. Believe me, having spent all but three years of my adult life (training for and entering the business world) in journalism or in academia as a conservative in obsessively liberal environments, you have to develop a thick skin, a lot of patience (for the consistently uninformed, illogical ideas you hear), and an easy-going nature or you'll go crazy. So you shouldn't take a column in this style as indicative of this "trend" you claim to see in political discourse but, rather, as a tactic suited for a given moment. And this was the moment for this kind of column, because the targets were so inviting (a business owner who invests all his life and then fears doing that on Social Security, an insurance agent who operates in a heavily-regulated field yet knows not the basics of public sector finance, a U.S. Senator who has all the data and experience who cannot put partisanship aside, at least on this issue). There was no more effective way to demonstrate ignorance and partisanship.

Never forget that, contrary to the relativist myth so many have labored to foist upon our intellectual life, that there is always one single truth about every issue, one most "correct" preference for each issue, which may be found through knowledge of history, human beings, fact, logic, and the use of right reason. Some confuse the revelation of others' mistaken thinking on issues as a kind of attack on them, because they believe in the myth of "multiple truths" and see spirited arguments for the most valid preference as a kind of disrespect to another's preference if not that person, because these observers refuse to concede that one person cannot be "correct" as another with different views on the same issue. Thus, what really demonstrates the absurdity of another preference becomes perceived as dismissive and a lack of willingness to engage in debate.

Jeff Sadow said...

UPDATE: A Newsweek poll out has 36 percent against, 26 percent for, 30 percent undecided. However, a plurality of the younger are for partial privatization (48%). The president needs to persuade those as shown in the column to persuade those in power (Landrieu) to get this through.

Ian McGibboney said...

It seems to me that if this plan were such a great idea in the first place, then its passage wouldn't rely on a targeted propaganda strike towards an age group that knows the least about Social Security, young voters.

Jeff Sadow said...

There's lots of great public policy out there that's never been enacted. Just because it's meritorious doesn't mean that people will have the wisdom to understand that. Which is where leadership by politicians comes into play.