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Warren Buffett who knows

Warren Buffett, who knows a thing or two about investing, comes out against the phase-out (see last item) along with Berkshire Hathaway Vice Chairman Charles Munger, "a self-described right-wing Republican" who thinks "Republicans are out of their cotton-picking minds on this issue." It's not entirely clear if he thinks Republicans are insance because their plan is so bad on the merits, insane because their plan is so politically self-destructive, or insane because it's simply absurd to be having a national conversation about restoring "solvency" to the federal government's best-financed element. Perhaps it's all three!

Enough introducing -- on

Enough introducing -- on to substance. Nicholas Kristof's gone and written what you might call an "objectively pro-privatization" column. He doesn't endorse Bush's privatization drive, or even so much as mention it. But the theme of the column is that the government spends too much money on old people and this plays an important role in shaping the meta-context in which this debate plays out in favor of the sort of sharp benefit cuts the White House is putting on the table. What's more, it contains a plug for the work of Laurence Kotlikoff. If you're not familiar with the man or his book what you need to know is that he's perhaps the chief useful idiot of the privatization drive.

Kotlikoff, as you can tell from Kristof's column, is very concerned that the government spends too much money on the people who are old right now, and the people who will be retired soon, and not enough on younger people. The phase-out crowd is a great fan of his book and mentions it constantly. I spent the day a couple of weeks ago at a Heritage Foundation event on Social Security where, naturally enough, you had a lot of privatization advocates, and several of them mentioned Kotlikoff and the analysis presented in his book as an important reason to support the phase-out. Funny thing, though, was that none of them said anything about Kotlikoff's views as to what we should do about it.

Kotlikoff favors replacing Social Security with something that's been given a name that sounds like "private accounts" or "personal accounts" or whatever it is we're supposed to call them nowadays. But his accounts are nothing like the ones Bush is pushing for. Individuals have no control over them -- each and every citizen's money is going to be invested the exact same way according to a formula devised by a government computer somewhere. In essence what he's proposing is simply that the Social Security administration invest the Trust Fund partially in stocks and other private assets. In order to overcome a couple technical problems with that plan, he splits the money up into a whole bunch of pseudo-personal accounts as a kind of accounting device. This bares about the same relationship to accounts à la Bush as the administration's claim that it doesn't ship terrorism suspects abroad to have them tortured does to the truth.

The other, even bigger difference, is that while Bush's accounts are financed through massive amounts of borrowing from some unspecified source, Kotlikoff's accounts are financed through a hefty sales tax. This is important not just because of the difference between a fiscally responsible plan and an irresponsible one. It's important because consumption taxes, like a sales tax or a VAT, are taxes that fall much heavier on old people than do the income and payroll taxes that the government depends on for the vast majority of its revenue. Retired people, by definition, don't earn much income. They also tend not to save any money, since they're at a point in their lives when they're focused on spending down whatever savings they may have. But they do buy stuff, so a 10 percent sales tax would wind up taking a lot of money from them. This is key, because the whole point is that Kotlikoff and Kristof think the government spends too much money on the people who are at-or-near retirement, and not enough on younger people.

What Bush is pushing -- and what's being pushed with many a reference to Kotlikoff's book -- does the reverse. If you're 55 or older when the plan passes, nothing changes for you. If you're 50 or 45, you do face some benefit cuts, but they're not all that big. That's because the way switching from price indexing to wage indexing (whether fully or, as we're now being asked to swallow, partially) works is that there's a little cut the first year, then a little cut the next year, then another cut, then another cut, then another, and so on down the road until quite literally the end of time. Once you get to somebody Josh's age, the cuts are looking pretty steep. If, like me, you were born in 1981, they get even steeper. My younger brother's benefits will be cut even more, and our little cousin Rebecca gets the biggest cuts of all.

Now as it happens, I think this whole Kristof/Kotlikoff analysis is off-base. Yes, meeting all our promises under Social Security and Medicare will cost a lot of money in the future. But the great thing about the future, is that between now and then our economy will grow, just as today's economy is much larger than was the economy back when Social Security was first created. With that additional wealth, we should be able to take care of retirees and children alike without too much trouble. But even if you do buy what Kristof's selling, don't buy Bush's brand of snake-oil. He's not taking from granny to help out my generation. He's taking from us -- and even more from our future children and grandchildren -- to finance tax cuts and generate administrative fees for his contributors in the financial services industry.

Greetings The only appropriate

Greetings! The only appropriate way to start things off here is by thanking Josh for the kind words and all of his readers for (hopefully) sticking with the site while it's in my hands. Both Josh and several of my predecessors as TPM guest-bloggers have been major inspirations to be over the years, and I can only hope to meet the high standards they've set both online and off.

It also only seems fair to note that I made the gigantic tactical blunder of trying to switch my internet service from DSL to cable modem on a month whose first day happens to be a Sunday. As a result, Verizon's already cut off my DSL service, but Comcast won't hook up the new service until Monday. Shouldn't be a major problem down the line, but I owe thanks to whoever it is that lives next door and hasn't put a password on their WiFi network. Without you, I'd be nothing.

I'll conclude my introductory post with a shameless plug for my employer, The American Prospect. Those of you who were told Jon Chait you were discomfitted by The New Republic's occassional lapses into rightwingery should find our sweet, sweet orthodoxy reassuring. And like TPM itself, we love Social Security. Not just in the sense of loving the program (though that's important too) -- we love to write about it. You'll be hearing plenty on the subject from me in the next few days, but in case you're left jonesing for more, check out our Social Security Archive.

As regular readers know

As regular readers know, my wife Millet and I were married last month. (It's pronounced Mill-ette. It's a Hebrew name that isn't even a name in Hebrew. Long story. But, as you can imagine, it's one I adore.) And when some readers asked why I had come back online so soon after the big day I explained that we had decided to take our honeymoon in May.

Well, that day is upon us.

We're going to be away, south of the border, for a week. And we're leaving early Sunday morning.

Now, a cynical and untrusting person might say, 'Hey, wait a minute. You spend days raising funds from hundreds of your readers. And the first thing you when you're done is leave the country?'

I admit one can arrange the facts in that way. But I assure you that doing so creates a false impression. Rest assured, I am returning. And TPMCafe is on track for our launch in mid-May.

I'll say a bit more about that in a moment. But first, I want to introduce you to the two guest bloggers who will be minding the store in my absence: Matthew Yglesias and Kenneth Baer.

I'm never up to speed with what all the latest blogs are. But I started reading Matt's blog when he was still in college only two or three years ago. He's a staff writer now at The American Prospect. And he's simply one of the most impressive young journalists in Washington today, in any part of the profession. I'm especially pleased that he's been such a strong and cogent voice on Social Security since we are sure to face a new tide of bamboozlement in the week ahead.

Kenneth Baer has one foot in the world of journalism and another in the world of brass-tacks DC Democratic operative land. He was a speechwriter for Al Gore in 90s. And I find that usually when I bring up this or that Democratic pol in conversation, it ends up that he's either worked for them, worked for someone who was running against them, wrote a speech for them or knows some secret about them that I'm psyched to know but would just assume others didn't. In any case, he knows Democratic DC -- a diminished specimen, admittedly, but still worth knowing more about.

Kenny's guest blogging stint, which will get started Wednesday afternoon, because he's following the British elections (which are next Thursday) extremely closely. So he'll be able to get you up to speed on Wednesday and explain all the ins and outs of it as the results come in Thursday evening.

I'll be back on Sunday.

Let me sign off with a note to contributors. Again, thank you. More than 1500 of you contributed over the previous ten days. You all gave generously. And many of you wrote notes that meant a great deal to me. To say that I was and am humbled would be an understatement. But I must confess that that was not my only or perhaps even my most potent feeling. As I looked over the notes yesterday and the names of various contributors, I had this moment when I imagined all of the various contributors in a crowd or all together in one place. And the thought suddenly came to me: #$@!, I really better make sure this thing doesn't suck!

So, let's hope. But I think you're going to like what we've come up with. We've got a great stable of contributors lined up. Journalists, pols, essayists, political operatives, novelists, policy hands, academics and various people I'm not precisely sure how to categorize. We're also working on new ways for the community of people who read this site to communicate with each other and contribute to the site with their own ideas, insights and observations.

And one other thing. And this again to contributors. In many of your notes you write "to Josh and staff" or something like that. Well, there is no staff. There are various folks without whom I couldn't put this site together -- the guy who helps me with the tech side of the operation, my research assistant and others. But the site has never had a staff -- as in people beside me who have regular paid job working on this site. That, in fact, was the main reason, for the fundraiser, because with the new site in addition to TPM I need to hire a staff of at least one to help me run the whole thing. As of now, though, no staff. Which brings me to my final point. As I said, I'm very appreciative of all your contributions. And I'm responding to each of you individually with a note of thanks or responding to questions you asked. But, honestly, writing 1500+ thank you notes takes a long time. This was actually the only major planning failure of the whole fundraiser. Tomorrow I'm leaving for my honeymoon and I feel confident my marriage will not last long if I spend much of any time working on writing the thank you notes.

All of which is a long way of saying that most of you won't hear from me individually till after I get back. But let me assure you nonetheless that your contributions are greatly appreciated.

I'll be back in a week.

ed.note As noted yesterday

(ed.note: As noted yesterday, Ivo Daalder will be one of the contributors to the national security and foreign policy blog at TPMCafe.com. As we build toward the launch of the new site, we'll be bringing you occasional guest posts from Ivo and other contributors.)

Whatever happened to Bush’s “global war on terror”? For three years, the president didn’t let an opportunity go by without repeating that we were in a global war against evil terrorists. But he’s gone strangely silent ever since his reelection last November. My Brookings intern, Jina Chung, examined the text of Bush’s speeches over the 12 months, as posted on the White House website to see how many times Bush referred to the “war on terror” or some variant of the phrase in the six months since November 2 and how many times he did so in the six months prior the elections. Here’s what she came up with: Before the elections, Bush mentioned the war on terror three times as often as after. In fact, he referred to it more often in the thirty days prior to the election (71 times) than in the six months since (66 times).

Why this sudden reluctance to talk about what for years was Bush’s signature foreign policy issue? Part of the reason, surely, is that the war on terror was central to Bush’s reelection effort. “We can go to the country confidently on this issue,” Karl Rove told the GOP months after the September 11 attacks, “because Americans trust the Republican Party to do a better job of keeping our communities and families safe.” And there is no doubt that confidence in Bush’s ability to fight terrorists proved to be decisive in his defeat of John Kerry.

But I think something else, something more significant is going on — which is that Bush increasingly appears to think the war on terror has actually been won. That’s not as surprising as it sounds. For Bush, the invasions of Afghanistan was the first phase in the war on terror; Iraq has turned out to be the last. In Afghanistan, Bush maintains, the terrorist infrastructure was destroyed and Al Qaeda was severely disrupted. The terrorist network “has been severely diminished,” Bushed argued in his prime time press conference Thursday night. “We are slowly but surely dismantling that organization.” As for Iraq, remember that Bush called this the “central front” in the war on terror as far back as September 2003. With January’s elections and the installation of a new Iraqi government just this week, Bush I think now feels that the terrorists are really on the run — and that he is the true victor in his war.

I am not saying that Bush is right in thinking this. He’s, in fact, deeply mistaken. Terrorists have hardly been defeated and, if anything, the botched invasion of Iraq has done wonders for their cause. But what I am saying is that Bush appears to believe that the tide in the war has turned — that victory is not only likely, but is actually at hand.

And this helps explain another strange turn of events — the return, in recent months, of Bush’s pre-9/11 foreign policy. Before the terrorist attacks, Bush’s foreign policy consisted of worrying about great powers and rogue states — and abhorring involvement in nation-building and dealing with the world’s great calamities as misguided forms of foreign policy as social work. The policy priorities emanating from the White House and Foggy Bottom today are little different. A key priority now is containing China through strengthened alliances with Japan and India, and support for Taiwan. That is what Condi Rice’s trip to Asia last month was all about. Another priority is preventing rogues like North Korea and Iran from threatening us and our allies with nuclear weapons. And rather than worrying about the nexus between tyrants, terrorists, and technologies of mass destruction we’re back to worrying about madmen and missiles (which, Bush reassured us on Thursday, missile defenses will take care of).

The only difference between Bush’s pre-9/11 foreign policy and now is his new rhetoric about freedom and liberty. But let’s not kid ourselves — rhetoric is one thing, actually following through is another. After Bush decided to walk hand-in-hand with the Crown Prince of Saudi Arabia last Monday, it’s surely no longer possible to take this rhetoric seriously anymore.

John Tierney the Times

John Tierney, the Times new conservative columnist, has another column on Social Security today jumping on to the president's new bandwagon. His premise is that Democrats are "aghast" at the president's 'new' Social Security proposal because he "has finally called their bluff." He's proposing a way to make big cuts in Social Security while still protecting the poor. And as Tierney goes on to explain, this has given the lie to the established arguments for Social Security, which Democrats commonly make.

Tierney's piece is woven through with various misleading arguments, which you'll probably be able to catch when you read it. But look more globally at the argument that he, taking the president's lead, is now embracing.

The privatizers have spent almost six months arguing that Social Security is bad as an investment plan because it doesn't have a high enough rate of return. Now they have taken to arguing that it is bad as a welfare program because it gives too much to those who aren't poor.

Social Security is also, I'm willing to concede, an abysmal hair dryer. But the point isn't relevant.

And here we have the essence of the matter. In their effort to phase out Social Security, privatizers continually try to evaluate it in terms of something that it is not. Tierney reveals his own assumptions and prejudices by claiming that Social Security is simply a poorly designed old age welfare program that unwisely provides benefits for middle class people too.

Social Security is neither a poorly designed welfare program nor an investment plan with a poor rate of return. And the privatizers are losing this national debate because Americans, overwhelmingly, understand that.

Social Security is a defined-benefit Social Insurance program that provides a baseline level of retirement security for everyone. Middle class people pay into the program during their working lives and they get benefits back when they retire.

That is not a flaw in the design. That is the design.

By a decisive margin, Americans understand that system and they approve of it. Yet it is a system that offends the sensibilities of privatizers like Tierney.

So their attempts to bamboozle continue apace.

911 really does change

9/11 really does change everything.

Here's Sen. Wayne Allard (R) of Colorado justifying Republican use of the nuclear option in a letter now being sent to his constituents ...

In light of recent terrorist attacks, it is readily apparent that we face a new age of global unrest, a world in which terror has replaced formal declarations of war as the major threat against freedom and democracy. A necessary component of providing justice to those who would do harm to our nation is to maintain an efficient court system - a court equipped with the personnel and resources that enable it to fulfill its role as a pillar of our constitutional system of governance.

The current filibusters of President Bush's Circuit Court nominees clearly demonstrates an active effort by a minority of Senators to block the confirmation of well-qualified judicial nominees. I firmly believe that these tactics have damaged the judicial nomination process to an unacceptable degree, and now it must be corrected. It is shameful that the action of a handful of Senators has created a vacancy crisis that threatens the service of the very justice upon which our great nation depends.


Without the nuclear option, the terrorists will <$NoAd$> have won.

Ironic.

Okay were done. Our

Okay, we're done. Our TPMCafe Fundraiser went from the morning of April 20th through the evening of the 29th. And over those ten days 1522 TPM Readers contributed online. A few dozen more did so by mail. Needless to say, if you didn't get a chance and would still like to contribute, we will not turn you away. As it always is, the 'contribute' link is down there on the left sidebar beneath the ads. But for now no more harping or pitches in the posts. The Fundraiser has been a great success. I cannot thank you enough. More tomorrow on TPMCafe and what's coming next week.

As of 511 PM

As of 5:11 PM this evening we have 1373 contributors to our TPMCafe Fundraiser (here's a brief description of what TPMCafe will include).

We've got a bit more than six hours remaining. And given that it's Friday evening, the pace of contributions seems certain to slow. But we're holding out for 1400 contributors before we finish up at midnight.

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