Revenge of the Plutocrats
Last Sunday, The New York Times published a lead editorial defending Social Security from its attackers. A candid piece – even if it did slight the political incentives for continuing to milk the Social Security fund to cover other appropriations. Welcome – but 4 years overdue. The game is lost – the intellectual and political game. Obama gave it away in the summer of 2011 and is on the brink of sacrificing Social Security as part of his so-called “grand bargain.’
The NYT belated action falls under the heading of “grand-pa responses.” When 30 years from now, a grandchild at Thanksgiving dinner asks; “Grandpa – where were you when they sold out the old people?” he can respond by pulling out a yellowed clipping of the March 31, 2013 editorial. If the kid is really sharp, the follow-on question might be: “shouldn’t this have been dated April 1?”
The Times tacked in the opposite direction by Wednesday – perhaps taken aback by its own deviance? An exceptionally long news story by Jackie Calmes pressed hard on the theme that Social Security was in fact becoming a drain on the budget and the economy since new recipients were beginning to receive more than they contributed.
Of course, the program always had an element of inter-generation transfer insofar as payers-in were earning higher wages than had been the case a generation or two earlier. And of course, the earlier decades of surplus were more than ample to create a surplus sufficient to meet new claims for another generation – at least. That is the case so long as the government does not move that surplus into the general budget. Moreover, the calculation of contributions made and disbursements somehow does not include the interest accrued. Calmes seems to have applied Islamic banking principles to Social Security.
So the article set up a straw man that Social Security was some sort of individual investment vehicle whose expose as something different justified the cries of havoc. To ensure that maximum effect, this line was incorporated in a story whose headline, and first part, concentrated on the different arithmetic of Medicare.
Mario Draghi, head of the European Central Bank, pulled a similar stunt a few weeks ago in speaking to a critical meeting of EU prime ministers and Finance Ministers. In an effort to prove his case that the plight of the Community’s “southern” members stems from the laziness and incompetence of their workforce, he highlighted statistics that purported to show vast differences in productivity/wages gap. Draghi conventionally measured the former in Euros discounted for inflation and the latter in nominal Euros. If there are 20 ways to lie, with statistics there are 100. If someone can shed some light on any of these lubricious numbers, please email me and I’ll pass it on.
On Thursday, the White House announced its proposed budget. The document featured cuts in Social Security and $400 billion in Medicare cuts – cuts that Obama pledged to resist during the re-election campaign. Many expressed surprise – for some inexplicable reason.
Remember Richard S. Fuld Jr, the CEO of Lehman Brothers who crashed that venerable investment house? The simpering Mr. Fuld who begged the Congressional committee for sympathy and understanding of what had befallen him? Well, the BBC a while back made a documentary on the Word Financial Crisis that includes a brief video of Mr. Fuld exhorting his executives a few months before the collapse. He howls: “I want to reach in, rip out their heart and eat it before they die.” They are his competitors. There are few vegans on Wall Street. In a related video, Treasury Secretary Hank Paulson leaves a crisis meeting to call his wife with the message: “It looks like Lehman might go under – pray for me.” Pray for us?
Austin is renowned as Texas’ only liberal city. It does actually elect a real Democrat to Congress. Still. This Monday the local Chamber of Commerce called before its council the head of the Board of Education to instruct her as to the exact reform that the school district would have to make in eliminating under populated schools in exchange for the CoC’s support of a school bond issue. When the School Board voted by 7-1 to reject the demand, the CoC announced its implacable opposition. Within 24 hours, an emergency meeting of the school board was convened and the original vote reversed 8 – 0. Democracy in form; plutocracy in substance.
Scientists at Harvard and MIT claim to have come up with a computer program that grades essay exams. This super-TA is advertised as an historic breakthrough in higher education that can cut costs while removing the subjective element in the evaluation of students’ work. (No more illicit exchanges of higher grades for brownies). There are so many perverse illogicalities mingled in this latest step in the march of progress as to suggest that the story is a belated April Fool’s joke. It isn’t – unfortunately. The common thread is commitment to uniformity, uniformity within predetermined narrow limits. The unstated premises are that (a) there are definitive ways of thinking which are measurable; and (b) mechanical routinization is a self-evident good. Instrumentalism becomes the paramount educational principle. The corporate mindset finds this irresistibly appealing. The educational mindset that serves the corporate world has lost any sense of what education is beyond vocational training. Hence, the mindlessness of people who are paid to do nothing but think.
Talks on the loudly trumpeted North Atlantic Free Trade Area are scheduled to begin soon. The agenda features three items dear to three American interests groups: lowering obstacles to farm exports by breaking down EU restrictions on genetically modified, hormone and anti-biotic impregnated foodstuffs; lowering obstacles to the export of American films and other entertainment commodities; and the lowering of obstacles on American financial services and IT companies operating in Europe. Hollywood, Wall Street & Dubuque. The more ambitious and revolutionary Washington goal is to give private companies throughout the region the legal authority to challenge before the business friendly World Bank an extensive range of national legislation and regulation on environmental, safety, tax, and matters. In other words, businesses acquire the status of sovereign states at the expense of elected governments. Similar ideas have been put forward at the Asia-Pacific Free Trade Area talks. Public debate on these dramatic innovations?
There is a steady drumbeat of such stories that percolate (usually beneath the surface) every week.
Michael Brenner is a Professor of International Affairs at the University of Pittsburgh.