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My time is up.

My time is up. To summarize my main points:

Social Security privatization = bad.

Other than that, I hope (if you don't already) you'll consider reading and subscribing to the New Republic.

UPDATE: I've gotten several emails from readers who claim they won't read me, or won't read TNR, because of this or that disagreeable position we've taken. To be perfectly frank, if you think like this I pity you. Why on Earth should anybody confine their reading to those writers with whom they agree on everything? The best way to learn is to read arguments you disagree with. I voraciously consume analysis with which I disagree, both on the right and on the left.

TNR, more than any other magazine, publishes a range of dissenting views. Yes, we editorially criticized Howard Dean and supported the Iraq war. But we've also run plenty of pro-Dean and anti-war articles, including prominent cover stories. It's fine if TNR isn't your cup of tea. But if you spurn it or any other voice solely on ideological grounds, you're dooming yourself to small-mindedness.

Sorry to get preachy. I just find this mentality baffling.

Im not sure what

I’m not sure what exactly it will take for the conventional wisdom to the Washington press corps and the elite punditocracy to stop saying that President Bush has a plan to save Social Security from insolvency and the Democrats don’t. You’d think the absence of any such plan on Bush’s part would be enough, but clearly it’s not.

How about the fact that Bush himself now admits it? According to Dan Froomkin’s White House Briefing at the Washington Post online, Bush told a roundtable of reporters yesterday that he has no plan:

But he expressed astonishment that people constantly refer to "Bush's plan": "I haven't laid out a plan," he said. "I've laid out some ideas that I think ought to be considered for a plan, and that's what's important for people to know."


And in his press conference today, Bush repeated, “I have not laid out a plan yet -- intentionally. I have laid out principles.” That really ought to settle the question.

Meanwhile, Bush also admitted that private accounts do not make Social Security solvent. “Personal accounts do not solve the issue,” he said.

Nonetheless, Bush insists on private accounts. From the roundtable discussion:

Q: Senate Minority Leader Harry Reid [D-Nev.] said if he could ask you one question, it would be, 'Why doesn't he take [Social Security account] privatization off the table, and let's talk about solvency for Social Security? What would you say to him?

A: I would say, 'I'm willing to talk about solvency; please come to the table,' and I think it's very important for people to consider personal accounts. It's a concept that I think is very important to be discussed. . . .

Q: There was some confusion when you referred to personal investment accounts as an 'add-on' in a recent Social Security [promotional] appearance [in Westfield, N.J.]. Would you be open to add-on personal accounts, as opposed to a personal accounts carved out of payroll taxes?

A: No, I think the 'carve-out' is the way to go. What I was referring to in my speech, I was explaining to people that the capital in the personal account would yield a certain amount of interest, and that interest -- the monies would be in addition to a Social Security check you were receiving.

Q: So you would rule out add-on accounts?

A: In my judgment, the best way to go forward is to allow a personal account to be created out of the payroll taxes being paid into the system."


So let’s be clear where things stand. This is fundamentally an ideological fight. Democrats want to keep Social Security as a form of social insurance, and Bush wants to transform it into something else. Democrats are not willing to make a deal on solvency if it means giving up social insurance. And Bush is not willing to make a deal on solvency unless they do.

Given all this, how on earth can so many people continue to claim that Bush wants to save Social Security while the Democrats have their heads in the sand? How can this almost universally-accepted aphorism be said to have any basis in reality?

The political press and

The political press, and websites like this one, have been obsessing for weeks over the politics of privatizing Social Security. I think we may all have missed the single key development: Lindsey Graham has switched sides.

Graham was always the center of the action. A champion of privatization, he's been holding closed-door meetings with moderate Democrats in the hopes of forging a compromise. The main worry of the pro-Social Security crowd all along has been that Graham would co-opt the Democrats into some form of privatization.

That's why what Graham told the Washington Post last week is so crucial. In the interview, he called private accounts a "sideshow." There was also this:

"Let's have a conversation along these lines: Let's make a commitment to permanently find solvency, and see where we go," he said. "Set the accounts aside for a moment. Let's see if we can find solvency."


That position is known as "the Democratic position." Democrats are willing to discuss Social Security's solvency, but not privatization. In the same article, Treasury Secretary John Snow said, "the administration is saying that the solvency issue, if it's going to be dealt with in a way that's fair to younger people, has to make available to them this opportunity to build a nest egg through the personal accounts." Which is in keeping with the conservative line. For privatizers, solvency is the pretext for transforming Social Security from social insurance into a system where individuals take care of themselves. If they address solvency withot adding private accounts, they lose their pretext.

And yesterday, Graham voted with the Democrats on a sense of the Senate resolution rejecting large benefit cuts or increases in the national debt.

So how or why did Graham switch sides? My guess is this. Graham is an earnest guy, and he sat down with Democrats thinking he could win them over to his point of view. But as they hashed it out, and they brought up the inherent problems with establishing private accounts, he instead came around to their point of view. Instead of Graham coopting the Democrats, the Democrats coopted Graham.

Anyway, that's my theory.

From the Guardian Russias

From the Guardian: "Russia's secret services are shielding Bosnian Serbs wanted by the war crimes tribunal in The Hague for atrocities committed during the Bosnian war, including the massacre at Srebrenica, where more than 8,000 Muslim men and boys were slaughtered."

Theres a gag in

There's a gag in one episode of Arrested Development (the greatest television show in the history of the world) in which a character sees a bag in his freezer labelled, "Dead Dove. Do Not Eat." Curious, he opens the bag, looks grossed out, pauses, and says, "I don't know what I expected."

I had a similar experience this morning. National Review Online posted a link to a Jonah Goldberg column entitled "Kill the cats!" Intrigued, I clicked on it, figuring it had to be a metaphor of some kind. It's not.

Yesterday Josh argued here

Yesterday, Josh argued here that "One of the Democrats' greatest problems -- far more insidious than many realize -- is their desire to gain the approval and approbation of establishment Washington and its A-list pundits."

Interestingly, a reporter friend of mine came across some evidence of this proposition that very night. As he told me:

I was talking yesterday with a very influential Democratic congressman who firmly defended the current Democratic position of not having a specific Social Security 'plan' on the table. Yet at the same time he was a little defensive about it. Why? "Because I keep hearing from you guys" -- i.e., Washington reporters -- "that we're going to be in trouble for not having a plan," he said. "And it makes me nervous."

The stench of death

The stench of death is everywhere around Social Security privatization. Today the Washington Post publishes an analysis of its poll showing support for Bush on Social Security is falling yet again. Meanwhile, in the New York Times, David Brooks writes a “A Requiem for Reform,” in which he blames GOP miscalculation, Democratic partisanship, and the selfishness of the voters for killing privatization. (A departure from his usual sunny populism, wouldn’t you say?)

Actually, if reform dies, it wasn’t selfishness that killed privatization. It was precisely the opposite.

The irony of Brooks’ complaint, which we’re sure to see repeated elsewhere, is that selfishness has always been at the core of Bush’s economic agenda. He passed tax cuts by dismissing Democratic worries that it would burden future generations with debt. Remember him waving dollar bills and promising, “it’s your money”? He organized lobbies representing the affluent to push for the tax cuts that would benefit them disproportionately. Karl Rove’s re-election strategy was built on appealing to the narrow self-interest of a series of groups. Farmers got lavish crop payments. The steel, shrimp, textile and lumber industry got tariffs. HMOs and pharmaceuticals got lavish subsidies. Etc.

Unsurprisingly, Bush approached Social Security privatization in the same spirit. The strategy was to divide up the electorate and appeal to each segment in very self-interested terms. They would neutralize seniors with the assurance that their benefits wouldn’t be touched. The young would be lured in with promises of amassing great fortunes in private accounts. Blacks would be peeled off from the Democratic coalition with bogus claims that Social Security harms them disproportionately. And Wall Street and other businesses, who smelled large profits down the road, would pony up tens of millions of dollars to fund the whole campaign.

But it hasn’t worked. And the main reason is that the public is not quite as selfish as the conservatives thought.

The privatizers’ weakest assumption turned out to be their belief that the elderly would support privatization if they knew they wouldn’t be affected. For weeks, as polls have shown rising hostility to privatization, GOP pollsters and strategists have conceded that they need to do more to reassure seniors on this point. Bush has obligingly harped on it at every stop.

Yet senior citizens overwhelmingly oppose Bush’s approach. And it’s not because they think their benefits will be cut – polls show they overwhelmingly they buy his reassurances. As today’s Post reports:

By and large, the elderly do understand the president has promised not to touch their Social Security checks, according to polling.

But that is not relevant to their political opposition, Smorodin said, noting that older people also worry that pension benefit cuts will hurt their children and grandchildren.

At 69, Gene Wallace knows the White House's proposal would have no impact on his Social Security check, but if Bush believes that will silence the Republican mayor of Coldwater, Mich., Wallace grumbled, "he's all wet."

"I'm a parent as well as a grandparent. Somewhere along the line, they are going to be eligible for retirement assistance," he said, with all the energy he could muster three weeks after open-heart surgery. "It's everybody's concern what happens to this country."


I find this pretty heartwarming. Who wouldn’t? I’ll tell you who: an economic libertarian who sees concepts like social insurance or collective interest as fundamentally alien. Which is to say, the sentiment that has driven privatization from the very beginning. As usual, this sentiment was voiced in its most naked way by GOP strategist, business lobbyist and Rove confidante Grover Norquist. Last year, speaking to a Mexican newspaper, Norquist chortled over the demise of the World War II generation:

This is an age cohort that voted for a draft before the war started, and allowed the draft to continue for 25 years after the war was over. Their idea of the legitimate role of the state is radically different than anything previous generations knew, or subsequent generations."

Before that generation, whenever you put a draft in, there were draft riots. After that generation, there were draft riots. This generation? No problem. Why not? Of course the government moves people around like pawns on a chessboard. One side spits off labor law, one side spits off Social Security. We will all work until we're 65 and have the same pension. You know, some Bismark, German thing, okay? Very un-American.


Brooks writes today about how privatization opponents used “familiar scare tactics designed to frighten the elderly,” using one of the most hackneyed clichés favored by critics of Social Security. Here’s what I’d like to see them explain: What’s wrong with being frightened about a future in which your children and grandchildren live in an every-man-for-himself society?

Marshall Wittmann the Democratic

Marshall Wittmann, the Democratic Leadership Council thinker who writes the Bull Moose blog, is a terrific guy. But in his zeal to defend Joe Lieberman he’s backed himself into a corner.

There’s a larger debate about Lieberman and his role in the party, but I’ll set that aside for now. Marshall defended the Senator’s honor by citing his vote against the bankruptcy bill, which Marshall praised a as “a strong stand against this flawed legislation.” Indeed Marshall throws this strong stance in the face of all the liberals who see Lieberman as a shill for business.

Fair enough. But since then several other bloggers have pointed out that the best chance to stop the bankruptcy bill was not on the final vote. The decisive vote was an earlier cloture vote. And Lieberman voted yes on that. Probably, after passage was inevitable, he switched from yes to no in order to spare himself more criticism from the left.

So Marshall responded by launching a counterattack on “dogmatic idealogues” and “hyperspace lefties” who gang up on Lieberman. That's fine as far as it goes. I actually agree with Marshall and the DLC on the suicidal purity of the Democratic party’s left wing, embodied by the Howard Dean movement and its fanatical internet contingent, even if I disagree with his support for Lieberman in particular. (I think Lieberman's zeal to be seen as bipartisan, apologetics for torture, history of supporting capital gains tax cuts and fighting sensible regulations on Wall Street allow party liberals to tarnish the whole moderate wing as sell-outs.)

Be that as it may, there’s a specific issue here. Marshall claimed Lieberman opposed the bankruptcy bill, but it turned out he really didn’t. Shouldn’t he, you know, admit that? He could still argue why he supports Lieberman despite this one bad vote. But clearly he was caught praising Lieberman for a particular stance and then, when it was pointed out that Lieberman actually did the opposite, lashed out at his critics without acknowledging the contradiction.

Marshall is in many ways a Scoop Jackson Democrat. Jackson was a foreign policy hawk and a domestic New Deal liberal. Lieberman isn't quite that. He's a hawk and a pro-business moderate. It's fine for Marshall to decide he cares most about foreign policy and support Lieberman despite some domestic disagreements. Pretending Lieberman is something other than what he actually is simply undermines the case.

Okay why does everybody

Okay, why does everybody say that President Bush has a plan to close Social Security’s deficit? The Bush plan is to allow workers to divert some percentage of their payroll taxes into private accounts. This is essentially a tax cut: instead of sending your money to the government to be spent on current Social Security recipients, you get to keep it, albeit for an earmarked purpose. Tax cuts don’t make deficits smaller, they make them larger.

To the extent that the press has recognized this, it’s to say that “private accounts by themselves do nothing to fill the deficit.” But this is a massive understatement. Private accounts by themselves make the deficit larger. Imagine Bush’s “plan” to fix Social Security consisted of building immense gold statues of himself through the country. Would one say that this plan by itself does not solve the problem? Obviously, that would be far too kind.

Now, it’s a little more complicated than that, but not much. Here are the caveats. First, conservatives have a theory that private accounts will be a “sweetener” to make benefit cuts easier. If people have private accounts, they’ll more likely accept cuts in the guaranteed benefit. But this strikes me as highly implausible. Taking away a guaranteed benefit is politically hard. Polls show the public overwhelmingly opposes replacing part of a guaranteed benefit with a private account. Basically, privatization means packaging whatever cuts are going to have to happen in order to make the program solvent with even more cuts needed to radically transform the system. The more money that’s diverted into private accounts, the more that has to be cut from the guaranteed benefit.

You could argue that the gold statue plan would make benefit cuts easier also. Maybe the gold statues would make Bush into a more prestigious, even God-like, figure in the public mind, and therefore more people would be willing to accept benefit cuts he proposed. But that’s not a very convincing argument either.

The second caveat is that Bush now proposes to have those who open private accounts accept in return cuts in their guaranteed benefit when they retire years later. Fiscally, this is better than proposing private accounts without explaining how you would pay for them. Yet it would still lead to huge increases in the national debt. Conservatives dismiss that debt as a down payment on reform. The government is going to get its money back eventually, they argue, so why worry?

The answer is that the government may not get its money back. By letting workers keep their payroll taxes, the government will owe lots of actual currency. In return for this, those workers promise to take lower benefits one day. But those promises can be revoked by future Congresses. If the market tanks and some workers do worse than those who retired a few years before them, the pressure for bailouts will be intense. In all likelihood, the government will get back somewhere less than 100% of the payroll taxes it agreed to forego.

All in all, the most optimistic thing you can say about Bush is that his plan would do no harm. The more accurate thing to say is that his current plan would exacerbate the problem in the guise of solving it. What’s completely unsupportable is to say that Bush has a plan to save Social Security and the Democrats don’t.

Josh writes below about

Josh writes below about Sebastian Mallaby’s column in the Washington Post today. Josh mostly addresses Mallaby’s political argument, that the Democrats are hurting themselves by opposing privatization. I thought I’d touch on the other half of Mallaby’s argument, which is that Democrats are making a substantive mistake opposing privatization. Mallaby is a truly interesting writer who researches his columns thoroughly and argues them in innovative ways. That’s why it’s so disappointing that his column today simply recycles a Republican talking point that has become ensconced as mindless conventional wisdom. I’m sorry this site is devoting so much space to beating up on a normally astute writer. But his view is so influential, at least among elite circles, that it’s worth dissecting.

The first thing to say here is that Bush does not have a plan to save Social Security from insolvency. I’m actually going to develop this point in the next post. (Let the anticipation build!)

Meanwhile, on to point number two. Mallaby insists that “the Democrats have no proposal of their own. They sound negative and irresponsible.” In fact, the Democrats have a proposal that’s every bit as substantive as Bush’s: put aside privatization, and come to the bargaining table to hash out a 1983-style fix mixing benefit cuts and tax hikes. Senate Democrats actually called a press conference to announce this position. It’s Republicans who are inveighing against this kind of non-ideological solution. (See this editorial in the Weekly Standard.)

Now, it would be one thing if Mallaby, like most conservatives, fervently wanted to privatize Social Security and saw closing its deficit as a secondary goal. But he explicitly argues the opposite. So it’s downright weird that he blames the Democrats here.

Third, he conflates Social Security’s projected deficit with other entitlement deficits. This is a standard trick employed by Bush and his allies: if you have to make the Social Security deficit look big, lump it together with other entitlement deficits. Mallaby concedes that the revenue lost from Bush’s tax cuts is three times the size of Social Security’s projected deficit. But, he writes, “the coming baby-bust budget crisis is bigger than $11 trillion.” By that he means that Medicare and Medicaid face a huge crisis, which is true. But why is this an argument to address Social Security first? Given that other problems are much larger, why should we devote scarce revenue and political capital to solving a relatively minor Social Security crisis?

As for the argument that privatization is an opening wedge designed to phase out Social Security as we know it, Mallaby flicks it away. “Democrats who say that any personal accounts are a first step to dismantling the system,” he writes, “should recall their own fury at equivalent Republican claims -- that Hillarycare, for example, promised ‘socialized medicine.’” But what Democrats are saying is true. Conservatives themselves have long argued that private accounts are a way to transform Social Security into something fundamentally different. They’ve admitted that privatization is the closest they could come to total abolition, and they’ve admitted that private accounts are intended to grow over time. Sure, out of political expedience, they’ve changed their tune. But the very fact that conservatives rule out a fix that doesn’t involve “carve-out accounts” – the device that is intended to phase out the system – shows that phase-out, rather than solvency, is their goal.

Finally, Mallaby repeats the dogma that “a party whose senators unanimously refuse to contemplate carve-out accounts is a party that's closed its collective mind.” Here again is this strangely common belief that it’s wrong to rule out a really bad idea. Doesn’t the substance matter at all? Would Mallaby rule out a plan for fighting terrorism that involves invading and annexing France? Or would he wait to hear the details? I won’t go on any more, but my last L.A. Times column dealt with what I called “militant open-mindedness.”

I understand the power that group thinking has – its ability to make sensible people believe absurd things. I find it depressing that somebody as astute as Mallaby would fall prey to that.

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