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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.

Jonathan Chait here filling

Jonathan Chait here, filling in while Josh and the future Mrs. Talking Points Memo prepare for their upcoming nuptials. A brief introduction is in order. I’m a senior editor (which actually means staff writer) for the New Republic. I also write an op-ed column for the Los Angeles Times which appears every Friday.

Josh previously expressed his hope that my TNR cover story on the need to defeat privatization could be made free to non-subscribers. Well, here’s a free link. I hope those of you who don’t read TNR will consider doing so. Electronic subscriptions cost a mere $29.95 a year, print subscriptions a bit more.

My one previous blogging experience came in late 2003/early 2004, when I spent a few months writing an anti-Howard Dean blog (Diary of a Dean-o-phobe) for the TNR website. Perhaps some who hold this view were among those who wrote in urging that the blog – or, in some cases, I personally -- meet an untimely demise.

I should let you know upfront that some of you may consider me one of those annoying pseudo-liberal sellouts. I did passionately argue in favor of the Iraq War. It seemed like a stronger case at the time, before we knew that Saddam Hussein was enduring international isolation, crippling sanctions, and ultimately full-out invasion by the strongest military power in world history all for the purpose of concealing non-existent weapons programs. (Come to think of it, my jihad against Howard Dean also seemed stronger before I knew that the alternative would be John Kerry. I still say Dean would have been worse.)

Anyway, it so happens that I’m also obsessed with Social Security privatization. So those of you who feel you haven’t gotten enough of that topic from this site, there will be more. Much more! If I get intoxicated with power, or hard up for material, I may even splinter the Fainthearted Faction and the Conscience Caucus into new sub-factions of my own creation. Hopefully it won’t come to that.

Alright Im off. As

Alright, I'm off. As I said, I'll pop in now and again over the next week. If you need to contact me, do so through the regular comments email. To contact Jon Chait, who'll be holding down the fort over the next couple days, use the email above.

(Note: For those of you who've kindly asked, no, I won't be posting from my honeymoon. We're taking that later this spring.)

One of the Democrats

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. The habit or inclination is rooted in a political world that ceased to exist 20 or 30 years ago, and even then was wrong-headed. Republicans, on the other hand, have long seen the relationship as fundamentally antagonistic (if not necessarily unfriendly) and have acted accordingly. On balance, that's led to better press treatment because, though they are loathe to admit it, the mix of editors and pundits and talk show hosts respect the treatment.

Democrats, from top to bottom, would do themselves no end of good if they simply acted on the assumption that the Washington establishment is not a constituency they are trying to appeal to or cultivate.

That doesn't mean they should ignore the Washington press. Far from it. They should state their views and demand they be fairly covered. But they should not act on the ingrained assumption that these people are basically like-minded people of shared assumptions and beliefs who can be appealed to on that basis.

All of that is another way of saying they should act like Republicans.

Now, let's take an example: Sebastian Mallaby's column this morning in the Washington Post. As you might expect, it's another entrant in 'Dems will do badly not putting forth their own plan' contest.

Mallaby says Democrats will find themselves in a similar spot to that which they did over Iraq. And though Mallaby puts himself down as a supporter of add-on accounts he says nevertheless that a party that refuses even "to contemplate carve-out accounts is a party that's closed its collective mind."

An implicit thread that runs through Mallaby's article becomes explicit when he says that "progressive Democrats should also admit the truth about Republican proposals: They're a heck of a lot better than leaving Social Security's deficit to get worse."

It does not seem to occur to Mallaby that the people who he is arguing against certainly do not believe this is so and furthermore that they have very strong and principled reasons for believing that -- many of which up-coming guest-blogger Jon Chait will no doubt discuss.

On balance I would class Mallaby's piece (along with a recent column by Matt Miller, for whom I have great respect) as another in a rash of recent examples of what we might call convulsive neoliberalism (a topic to be discussed later). But let's take a moment to think through Mallaby's point on the substance.

Democrats believe that private accounts destroy Social Security. That isn't rhetoric. It's the basis of their entire opposition. A private accounts system removes the guarantees and sharing of risk that are at the heart of social insurance. Agree with that or disagree with that. That's what Democrats believe. And yet to Mallaby ruling out private accounts makes them unserious, negative and irresponsible.

In the old days, keeping an open mind about voting for laws which you believe to be fundamentally wrong or misguiding was called cynicism. But I guess times change.

Mallaby presumably also buys into what is now the consensus assumption that private accounts at a minimum do nothing to improve solvency. On top of that, private accounts intentionally push the financing of Social Security as a defined-benefit program toward dissolution -- though not everyone yet admits this. (One might even add to the equation that in the most similarly-situated country where this change has been attempted, it has been judged so spectacularly unsuccessful more or less across the political spectrum that they are now attempting to go back to a system like ours. Mallaby may have heard of the place: Britain.) But again, opposing private accounts means you're not being serious.

Now, on the politics. The president has yet to introduce any plan. He only says he wants private accounts. That's his one bottom line. He won't come forward with a plan, even though he clearly has one, because he wants to make it more difficult for his opponents to attack him. The president has just been reelected. He has majorities in both houses of congress. He has, on this issue, especially, a favorable media. And in the three months he has been pushing this plan, public support for it has gone from luke-warm to flat cold. This is apparently a bad situation for the Democrats.

Even the premise of Mallaby's logic is flawed. Democrats have a plan for solvency. And everyone has a fairly clear idea what it would be. It'd be something along the lines of Bob Ball's or the Orszag/Diamond plan, a mix of tax increases and benefit cuts to bring the numbers into line -- something that would not require particularly drastic moves on either side.

What the Democrats haven't done is to formally get behind a concrete proposal, which is to say that they haven't done exactly what the president hasn't done.

And why should they? Every pol with a brain knows there is no point putting up a detailed plan which makes for a ready target when your opponents are in the midst of getting mauled over their idea. That may not go over well in civics class or at the Post editorial board. But it is straight politics as it is always played and for which no apologies are necessary. But in Mallaby's view, despite the extremely disadvantaged position Democrats find themselves in in Washington today, having a hand on not one lever of power: they should nonetheless sacrifice what they believe in order to be entirely indifferent to which political strategy will be advance their principles.

What that advice makes clear comes out in other parts of his piece --his relative indifference to the issues under consideration. You'll note that in various parts of his piece he lauds President Bush and congressional Republicans for selflessly putting themselves out there to raise the cry about the coming disasters to face Security Security. The president, he says, is "out there touring the country, trying to open people's minds to the necessity of reform; meanwhile, Republican members of Congress are sticking their necks out with detailed overhaul proposals."

Though he says he supports add-on accounts, it is also clear that he buys into most if not all of the essential premises of the privatization argument, even down to a few of the bogus statistics. To him, having private accounts inside or outside Social Security is basically an organizational matter on the order of deciding whether one might raise the retirement age one year or shave a bit off indexing of benefits to improve the program's solvency. In other words, an important question but hardly a matter of transcendent consequence of principle.

At the end of the day, the fundamental issue, at least as the Democrats see it (and as we're learning, much of the public) is simply invisible to Mallaby. He can't get his head around the notion that people really see private accounts as that big a deal. And that shapes his view of the entire matter. Because of that he can't see that the debate we're having isn't about solvency but about whether the country will make the historic decision to get rid of the Social Security system and replace it with something very different. In that debate, Democrats have a position that is straightforward, on the table, and emphatically clear. It's Social Security. Period. Democrats want to keep the current system. That's very clear.

Mallaby is living in a mental world of premises and assumptions (both political and in policy terms) which no Democrat should even remotely be a part of.

Any Democrat who would be rattled by Mallaby's reasoning would have to be one who is petrified of the idea of suffering some political setback somewhere, somehow, for some reason, even though all available evidence points in the opposite direction.

Mallaby's political advice strikes me as silly. But if it could be shown to me that defending Social Security was a risky proposition politically, it wouldn't affect my thinking at all. Some things are so important they're worth losing over. And when political parties realize that is generally when they start winning. A political party that is scared to run risks over matters of grand importance even when the public volubly says it has their backs is a party that scarcely deserves to exist.

Wow Roll Call says

Wow! Roll Call says Kweisi Mfume is going to run for retiring-Senator Paul Sarbanes senate seat in Maryland in 2006.

Yep the Dems have

Yep, the Dems have a problem on their hands. According to the just-released ABC/WaPo poll, President Bush's approval rating on Social Security has fallen to 35%, the lowest of his presidency. And 58% say that the more they learn about his plan, the less they like it. On the other hand, no Republican has yet moved to impeach the president over private accounts nor does there appear to be significant support among House Republicans for tarring and feathering him. So the Democrats may have overreached.

Im going to be

I'm going to be stepping away from the site this week; but I'll be leaving it in the hands of an eclectic trio of guest bloggers that I think you'll really enjoy. I'll pop in here and there with a post. But I am taking a week away from the site to ... well, it sounds so matter-of-fact and prosaic to just say it, but to get married. If all goes according to plan I'll be back fulltime next Monday or Tuesday.

Starting Monday, Jon Chait of The New Republic will take over for a couple days. He has a new article out this week on the Dems and just why they should do everything in their power to stop Bush in his tracks on phasing out Social Security. (I'm hoping the TNR Internet gods will choose to make his piece available to non-subscribers, given its inherent newsworthiness and the fact that I imagine he'll be referring to it with some frequency. No need on the companion piece by Gregory Mankiw, for reasons noted here.)

Signing on for the last couple days of the week will be Harry Shearer, actor, political wit, voice on The Simpsons, Derek Smalls of Spinal Tap, creator of Le Show and so much more. Notwithstanding the fact that I'll be in my last couple days of bachelorhood I'll definitely be stopping by a lot to see what on earth Harry chooses to write about.

Then over the weekend and through Monday, Ed Kilgore of NewDonkey.com and the Democratic Leadership Council will return for more excellent posting and probably a bit more of what will hopefully be fruitful antagonism with parts of our readership. (Among other benign qualities, blogs can, I think, be a wonderful venue for group or perhaps couples therapy for squabbling national political parties.)

So, my deep thanks to each of them for minding the fort while I'm away.

I'll be around till early afternoon today.