Josh Marshall

Josh Marshall is editor and publisher of TalkingPointsMemo.com.

Articles by Josh

(Ed.Note: The following is a guest post from long-time New Republic and Slate editor Mike Kinsley, who now edits the editorial page for the LA Times. He invites your responses at michael.kinsley@latimes.com. Note too that you'll probably see this post on at least a few other blogs.)

My contention: Social Security privatization is not just unlikely to succeed, for various reasons that are subject to discussion. It is mathematically certain to fail. Discussion is pointless. The usual case against privatization is that (1) millions of inexperienced investors may end up worse off, and (2) stocks don't necessarily do better than bonds over the long-run, as proponents assume.But privatization won't work for a better reason: it can't possibly work, even in theory. The logic is not very complicated. 1. To "work," privatization must generate more money for retirees than current arrangements. This bonus is supposed to be extra money in retirees' pockets and/or it is supposed to make up for a reduction in promised benefits, thus helping to close the looming revenue gap. 2. Where does this bonus come from? There are only two possibilities: from greater economic growth, or from other people. 3. Greater economic growth requires either more capital to invest, or smarter investment of the same amount of capital. Privatization will not lead to either of these.

a) If nothing else in the federal budget changes, every dollar deflected from the federal treasury into private social security accounts must be replaced by a dollar that the government raises in private markets. So the total pool of capital available for private investment remains the same. b) The only change in decision-making about capital investment is that the decisions about some fraction of the capital stock will be made by people with little or no financial experience. Maybe this will not be the disaster that some critics predict. But there is no reason to think that it will actually increase the overall return on capital.

4. If the economy doesn't produce more than it otherwise would, the Social Security privatization bonus must come from other investors, in the form of a lower return.

a) This is in fact the implicit assumption behind the notion of putting Social Security money into stocks, instead of government bonds, because stocks have a better long-term return. The bonus will come from those saps who sell the stocks and buy the bonds. b) In other words, privatization means betting the nation's most important social program on a theory that cannot be true unless many people are convinced that it's false. c) Even if the theory is true, initially, privatization will make it false. The money newly available for private investment will bid up the price of (and thus lower the return on) stocks, while the government will need to raise the interest on bonds in order to attract replacement money. d) In short, there is no way other investors can be tricked or induced into financing a higher return on Social Security.

5. If the privatization bonus cannot come from the existing economy, and cannot come from growth, it cannot exist. And therefore, privatization cannot work. Q.E.D.

One other point that's there in the <$NoAd$>Bumiller article, though not quite centerstage, and has been dancing around the margins of much other reportage on the Cash-n-Kerik drama.

For the play-by-play and ins-n-outs and details, the nub was President Bush. He liked Kerik. He thought he was a tough guy. And he wanted to appoint him to the job. And he didn't really want to hear any objections.

One graf from the piece ...

Throughout the process, the Republican close to the administration said, everyone at the White House knew that Mr. Bush liked Mr. Kerik, placing him in the special category of "this guy's our guy." Mr. Bush admired Mr. Kerik for his service as New York City's police commissioner on Sept. 11, 2001, for his willingness to try to train the police force in Iraq and for campaigning tirelessly for the president's re-election.

(Note also in Bumiller's piece that someone seems to be leaking volubly on Al Gonzales's behalf about how much the AG-to-be grilled Kerik for skeletons in his closet; guess that didn't work that well.)

The Post puts it a little more charitably ...

In hindsight, according to people close to the White House, it appeared Bush or his aides allowed their affection for Kerik to cloud their judgment. Kerik traveled extensively on behalf of Bush's reelection campaign and became a popular figure within the president's circle. His hero status from the Sept. 11 attacks and his colorful personality, Bush advisers figured, would help inoculate Kerik from questions about his past.

Most papers have covered this point somewhere in their coverage. But none I think (correct me if I'm wrong) has devoted a whole news article to this dimension of the story, which is probably the most significant one.

Straight Outta Battery Park ... an update on 'Da Luv Shack.

A couple days ago we speculated about how Bernard Kerik could have afforded his second luxe Manhattan apartment, the one where he held his workouts with celeb publisher Judith Regan and Corrections Officer Jeanette Pinero (not simultaneously, but, it seems, and one rather hopes, serially).

Now the Times tells the story.

It's buried pretty far down in Elisabeth Bumiller's story in Wednesday's Times. But there it is. The Luv Shack was "an apartment ... donated as a resting spot for police officers at ground zero."

I guess it's like they say: 9/11 changed everything.

Another piece in the Times, by Charles Bagli, gives further details. It seems that once the 9/11 clean-up settled into a routine in the late fall of 2001, Kerik asked Anthony Bergamo, "a well-connected vice chairman of the Milstein family real estate company and a police buff," if he could rent the apartment for his own use.

"Mr. Kerik paid for use of the apartment," the article goes on to say, "but the amount was not clear. Many apartments that were available in Battery Park City after the attack on the trade center were rented at well below market rates for months afterward."

The article goes on to say that Mr. Bergamo is quite tight with the NYPD. He was made an "honorary commissioner" a few years ago and the Department licenses him to carry "a Colt .45 handgun and two Smith & Wesson handguns, a .38-caliber revolver and a 9-millimeter pistol."

A couple days ago we briefly discussed Sandy Jaques, the GOP astroturfer and Social Security privatization activist who President Bush has on his Social Security privatization panel this week.

Here's how the New York Times identifies her today: "To drive that point home this week, White House officials scheduled a single mother from Iowa, Sandy Jaques, to speak on the advantages that private accounts could offer to divorced spouses and widows."

Go Times!

Thanks to this eagle-eyed blog for the catch.

A week or two back Andrew Sullivan called attention to Gerald Allen, the Alabama state legislator who introduced a bill to ban funds for any books "that recognize or promote homosexuality as an acceptable lifestyle." If the bill passed, Allen said, "novels with gay protagonists and college textbooks that suggest homosexuality is natural would have to be removed from library shelves and destroyed."

At the end of the post, Sullivan asked "But in Karl Rove's Republican party, how is this in any way out of place?"

Well, it seems he didn't know the half of it.

According to an interview Allen gave to The Guardian, just a few days after word of his proposed legislation hit the news, President Bush invited him up to the White House. Allen was supposed to be there just yesterday, Monday the 13th.

Perhaps Allen was just blowing smoke. But I'd be curious to know more about this meeting and whether it took place. Did Karl want pointers on how he could bring Allen's bill to the big leagues?

Late Update: Another blog got Gerald on the horn and asked him how his visit with the president went. Apparently they just talked about taxes, not gay sex. Oh well.

I must confess that I'm still trying to find out any solid details about Bernard Kerik's alleged nanny.

On Sunday, December 12th, the local paper, the Bergen Record, reported that Kerik spokeswoman Sunny Mindel told them that "the housekeeper worked in his Old Mill Road home in 2003 while Kerik was in Iraq training police in Baghdad."

The very same day, though, the Washington Post -- usually a reliable outfit -- reported that Kerik's lawyer, Joseph Tacopina, told them that "she worked for Kerik for about 18 months and had returned to Mexico six weeks ago, in keeping with a plan she had for several months."

But, yet again on the same day, the LA Times reported that the woman, "left the country about two weeks ago, under circumstances Kerik has not described."

Perhaps someone can help me straighten all this out?

In Tuesday's Kerik round-up, Newsday reports that one thing the background checkers came across was a wife Kerik had never mentioned to anyone before -- his first wife, the former Ms. Linda Hales of North Carolina, who Kerik married in 1978. Regrettably, Newsday adds that there is some question as to whether marriage #1 and marriage #2 (to Jacqueline Kerik) may have well ... overlapped.

Contacted yestereday, an aide to Kerik told Newsday that Kerik disputed both the date of his second marriage found in his autobiography and the date of his divorce in his first marriage provided by an attorney for the former Ms. Hales (now named Linda Priest).

Said the aide: "[T]hey made a mutual agreement between the two of them never to talk about it."

Another Newsday article explores how Rudy and the New York City managed not to find out about any of Kerik's shenanigans when he was on the public payroll.

The competition is heating up in the TPM-Giuliani "I really never knew Kerik all that well" TPM-Shirt contest.

Last night reader RB made a strong early entry with this quote from today's piece in the Times. Later on, TPM reader HR wrote in with another strong contender from the same article.

And through the course of the day I've been getting unconfirmed reports from readers about various statements Giuliani has made on the talk shows (we'll check those by the transcripts when they come out).

Now TPM reader KS just chimed in with another good one from tomorrow's Times.

In a story about the New York City's Department of Investigation's look at Kerik's alleged ties to mob figures, Giuliani said this ...

But Rudolph W. Giuliani said in an interview yesterday that none of those facts were brought to his attention in August 2000 when, as mayor, he appointed Mr. Kerik as New York's top police official.


"I didn't get to consider it then," Mr. Giuliani said, "and I did not know much about it all until this confirmation process started for homeland security."

But while KS's entry gains points on alleged lack of (Rudy) knowledge grounds, that passage is followed by this one ...

Mr. Giuliani said he did not believe any of the revelations he had heard would have changed his mind on Mr. Kerik's appointment.

And there this entry seems to come up short on true betrayal and abandonment grounds.

In non-contest-related news, the article notes that New York City officials say that such highly sensitive information would likely only have been shared with the Mayor and the city's top lawyer. So maybe Rudy's got his own problems.

Two names now getting a lot of play for the Secretary of DHS are Fran Townsend,White House homeland security adviser and Joe Allbaugh, Bush right-hand-man and former Director of FEMA.

I would think a big qualification for DHS would be some major executive experience, given the organizational challenges facing the new Department; and Allbaugh probably has a stronger resume in that regard.

On the other hand, the words I hear about Townsend are competent, honest, clean and other such terms.

Allbaugh, meanwhile, checked out at FEMA right about the time the first bombs started falling over Baghdad to hang out a shingle in the Iraq contracts rain-making biz as New Bridge Strategies in order to trade on his connections to President Bush.

New Bridge, as you'll recall, was set up for Allbaugh by uber-GOP-lobbyist Haley Barbour's firm, Barbour Griffith & Rogers, Inc, which was also generous enough to let New Bridge operate from their offices.

So I guess you could say that at least a couple of those adjectives don't apply to him.

We've mentioned this a couple times. But a reader just brought it up again, so I think it's worth returning to. Who's the nanny? Or, rather, is there really a nanny?

Let me be clear. I don't think there's any reason to reveal this woman's identity, if she exists. And I'm certainly not trying to.

On balance, I figure it's probably more likely than not that she does exist. But as near as I can tell, no specific details about this woman's identity or what she did for Kerik's family have ever been published. Nor have I seen any reports in which a given journalist writes as though he or she was privy to such details, even if he or she chose not to publish them to protect the woman's privacy.

And I don't think I can remember any "nanny" story in which such details have remained so secret. Given the fact that we now know there were a few dozen revelations (and counting) that would have sunk Kerik's nomination, you have to wonder. To paraphrase the old saw, if this nanny hadn't existed, the White House or Kerik might have been awfully tempted to invent her. And perhaps they did.

So, a couple questions. If you're a journalist who's working this story and you've been given details about the nanny issue that give you confidence that this person exists and that the basic outlines of the story we've been told are true (that she worked for Kerik, that she was an illegal, that she's returned to her country, etc.), I'd appreciate if you'd drop me a line. Your identity and the details will remain private. I just want to hear if any details at all have been shared.

If you're following the story and you think you've seen a report which fleshes this out more than I've seen, drop me a line too.