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Today's
Stories
October
30 / 31, 2004
Winslow
T. Wheeler
Spartacus Tells All
October
29, 2004
Harry
Browne
No Justice for Peace Activist in County
Clare
October
28, 2004
Forrest Hylton
"The Gas is Ours:" Bolivia's
Ghosts of October
Col. Dan Smith
Rebellion
in the Ranks
Alan Maass
Jon Stewart v. the Pundits
Ron Jacobs
Ecstasy
in Red Sox Nation
Alexander
Cockburn
Kerrycrats and the War
October
27, 2004
Jules
Rabin
Crammed with Distressful Politics
Dave
Lindorff
Bulgegate: the Lies Continue
Katherine
Van Tassel
On the Home Front: Both Parties
Ignore Working Parents
Jeffrey
St. Clair
The Bi-Partisan Politics of Oil
October 26,
2004
Brian Cloughley
Three
Weddings and Lots of Funerals: Atrocities in Iraq and Afghanistan
William Blum
Fear
Factors
Lenni Brenner
The
1964 Berkeley Free Speech Movement: Lessons for 2004
Ben Tripp
The
Chicken Salad Election
Fidel Castro
After the Fall
Greg Bates
The Nation's Flawed Calculus
Walter Brasch
Gag the Public: the War on Dissent
Niranjan Ramakrishnan
An Open Letter to Pat Buchanan
Mickey Z.
Rumble in the Jungle at 30: Ali, Foreman and the Congo
Amir Taheri
The Boom in Conspiracy Theories
Alexander Billet
Say It Ain't So, Bruce!: the Boss Endorses Kerry
Doug Giebel
The Religion of G.W. Bush
Kathleen Christison
Why
I Liked Thomas Friedman's Latest Column Before I Didn't
October 25,
2004
Ralph Nader
Letter
from a Minnesota Highway
Werther
West
Texas Wahabbism
Dave Zirin
Boston's Killer Cops: Death of a Fan
Fred Gardner
Pot Shots: Oregon Revokes Dr. Leveque's License
Omar Barghouti
Executing Another Child in Rafah
William J. Nottingham
Lori Berenson's Story
John Chuckman
A Foolish Consistency
Uri Avnery
On
the Road to Civil War
October 22
/ 24, 2004
Alexander Cockburn
You
Can't Blame Nader for This
Rev. William Alberts
On Bended Knee: Faith-Based Deceptions
Willliam A.
Cook
Killing for Christ
Saul Landau
George W. Bush: a Man of His Words?
Bill Quigley
I Held the Bullet in My Palm: Masked Haitian Police Shoot Children
While Arresting Priest
Christopher Brauchli
Seal It With a Frown: What Compassionate Conservativism Really
Means
William S.
Lind
Fallujah and the Moral Level of War
Sharon Smith
Guilt Trippers for Kerry
Greg Bates
Kerrynomics: "Hurt the Ones Who Vote for Us"
Justin E.H. Smith
Is Lesser Evilism a Compromise with Evil?
Rebecca Evans
Tarnished Legacy: Pinochet and the Chilean Military
Mike Whitney
Al Hurra TV: the Second Invasion
M. Junaid Alam
Purchasing Individuality in America
David Krieger
Nuclear Non-Proliferation: Examining the Policies of Bush and
Kerry
David J. Ledermann
The Emperor's New Crumbs
Lawrence Reichard
Same Old FBI Story
Website of
the Weekend
Lie Girls: the Real Coalition of the Willling
October 21,
2004
Ben Tripp
The
Undecided Voter Examined
Joshua Frank
Kerry
and the Environment:
It's Not Easy Pretending to be Green
Stan Cox
What
the Left Doesn't Get About Small Businesses
Bill Martinez
State
Depart and Cuban Visas: Only Anti-Castro Agitators Need Apply
Mark Engler
The War and Globalization
Lina Britto
and Lucia Suarez
Bolivia:
a Year After the October Insurrection
Website of the Day
Two Pampered Children of Wealth
October 20,
2004
Yitzhak Laor
"Did
You Two Squabble?": a Bullet Fired for Every Palestinian
Child
Jason Leopold
Sinclair
Broadcasting's Air War: a Long History of Journalistic Deception
Jesse Sharkey
A
Teacher's Account of How Military Recruiters Prey on High School
Students
Col. Dan Smith
Choking
Free Speech About the Draft
Dr. Teresa Whitehurst
Using My Religion
David Vest
If
Bush Wins, Blame Me
Jack Random
The Jackson 17: Reflections on a Mutiny
Ron Jacobs
Time
to Kick It Up a Notch
James Brittain
Plan Patriota and the FARC: a Change in the Countryside?
Christopher
Dols
Bombing Madison: Michael Moore's Fright Fest
Dave Lindorff
First They Came for the Nurses...
Website of
the Day
Banana Republican Catalogue
October 19,
2004
Jeffrey St.
Clair
Party
Favors: the Political Business of Terry McAuliffe
Jeff Taylor
Confessions
of a Swing State Voter
Matt Vidal
American
Myopia: "More Money in Your Pocket"
Victor Kattan
"It's Not Who You're Against; It's Who You're For":
Palestine Takes Center Stage At Euro Social Forum
William Loren
Katz
What Goes Around Comes Around
Sean Carter
O'Reilly Should Shut Up About Extortion Claiims
CounterPunch Wire
Who's Really in Bed with Republican Funders: Kerry or Nader?
October 18,
2004
Saul Landau
Facts
and Lies; Slogans and Truth
Dave Lindorff
Bulletin
on the Bush Bulge
Diane Christian
Sheep
and Goats: On the Language of Goodness
Greg Bates / Dave Lindorff
Betting on War: a Wager on the Fallout of a Kerry Presidency
Uri Avnery
Ariel
Sharon's Philosophy
Peter LaVenia
Leaving the Greens So Soon? a Response to Josh Frank
Mike Whitney
O'Reilly at the Whipping Post
Elaine Cassel
The Other War: Civil Liberties Three Years After 9/11
October 16
/ 17, 2004
Alexander Cockburn
The
Free Speech Movement and Howard Stern
Leslie Brill
Unmerciful Judge, Merry Executioners: the Death Penalty as the
True Measure of Bush's Character
Jules Rabin
Reckoning Deaths in an Agitated World
Dave Lindorff
About the Bush Bulge: Was There a Pucker in That Jacket or Was
the President Just Glad to be There?
Peter Linebaugh
Judging Judges: a Few Pages from The Mirror of Justices
Gary Leupp
Iran and Syria: How to Effect Regime Change and Expand the Empire
M. Shahid Alam
America, Imagine This!
Ron Jacobs
Trying to Cross Lake Champlain
Fred Gardner
The Flu Vaccine Question: How Bush Blew It
Jenna Orkin
The Toxic Legacy of 9/11
Dave Zirin
Name the DC Baseball Team: Contest Results
David Hamilton
Alone and Exposed: Bush as a Strong Leader?
Ralph Nader
Criticizing Israel is Not Anti-Semitism
Doug Giebel
Thinking the Unthinkable
Mark Engler
Crimes in Freedom's Name: Dick Cheney's El Salvador
Derek Tyner
Blacks Didn't Get the Vote by Voting: an Interview With Clarence
Thomas on the Million Worker March
Evan Jones
Gimme That Ole Time Religion: Cash and "The Mind of the
South"
Poets' Basement
LaMorticella, Klipschutz and Albert
Website of
the Weekend
No More Bush Girls
October 15,
2004
Paul Craig
Roberts
Where
Did These "Conservatives" Come From?: The Brownshirting
of America
Laura Carlsen
Wal-Mart
vs. the Pyramids of the Sun and Moon
Greg Bates
Empire of Insanity: Kerry's Iraq Troop Numbers
Michael Donnelly
News from a Swing State: Does Anyone Here Have a Spine?
Katherine Lahey
The Venezuelan "Threat": Why Do Kerry and Bush Fear
Hugo Chavez?
Robert Jensen
/ Pat Youngblood
Election Day Fears
Leah Caldwell
From
Supermax to Abu Ghraib: the Masterminds of Torture and Abuse
Website of
the Day
An Anti-Billionaire Policy? Why That Would Be Economic Racism
October 14,
2004
Darcy Richardson
The
Other Progressive Candidate: the Lonely Crusade of Walt Brown
Willliam A.
Cook
Turning
Myths into Truth
Laura Santina
Water, Women and War
Evelyn Pringle
Free Speech Banned by Big Pharma: What You Can't Say About Drug
Importation
Alan Farago
Lessons
from Nature
Rep. Maxine Waters
A Letter to Colin Powell on Haiti
Nicole Colson
Maimed
for Oil and Empire
October 13,
2004
Bishop Thomas
Gumbleton and Bill Quigley
Aftermath
of a Coup: The Other Disaster in Haiti
Sharon Smith
Barak
O-Bomb-a?: Democrats Target Iran
Christopher Brauchli
God and the Bush Administration
Mike Whitney
The Real Meaning of the Hamdi Case
Paul de Rooij
Amnesty
International: a False Beacon?
Website of
the Day
Operation
Truth
October 12,
2004
Roxanne Dunbar-Ortiz
"Indian
Country"
Greg Bates
The Year of Voting Dangerously: a Survey Request of Nader Voters
in Swing States
Steven Conn
Progressives as Pawns: Kerry's War on Nader
Jason Leopold
Under Cheney, Halliburton Helped Saddam Siphon Billions from
UN Oil-for-Food Program
Security Scholars
for a Sensible Foreign Policy
Time for a Change of Course
Timothy J. Freeman
Dying for a Mistake
Pierre Tristam
Deconstructing Bush
Niranjan Ramakrishnan
The 2nd Debate: the Blurring of Act and Audience
Bill and Kathleen
Christison
Israel as Sideshow
Website of the Day
John Kerry's Personal Off-Shore Tax Shelters
October 11,
2004
Robert Fisk
Iraq:
Unforgivable Betrayals and Broken Promises
Kevin Pina
The
Untold Story of Aristide's Departure from Haiti
Patrick Gavin
Rethinking
Columbus Day
Chris Floyd
Tribes with Flags in the New Afghanistan
Daniel Wolff
Radioactive Money: Entergy, Political Cash and America's Most
Dangerous Nuclear Plant
Walter Brasch
The Only Ones Who Believe Saddam Had WMDs are Bush, Cheney...and
40% of All Americans
Mike Whitney
The Phony Afghan Elections: Ballot of the Disappearing Ink
Ari Shavit
"He Talks to Condi Rice Every Day": an Interview with
Sharon's Lawyer
Paul Craig
Roberts
The
Debates and the Big Lie
Website of the Day
Dylan's Greatest Recording?
October 9 /
10, 2004
Alexander Cockburn
"There
Are No Innocents"
Paul de Rooij
Northern Ireland is Still the Issue: a Conversation with Gerry
Adams
M. Shahid Alam
Making Sense of Our Times
Laura Carlsen
Protest and Populism in Latin America
Fred Gardner
Pot Shots: ASA Goes to Court
Col. Dan Smith
Bush's Credibility Gap
Paul Craig
Roberts
Faith-Based Economics
Greg Bates
What If Nader Critics Get What They Demand?
Joshua Frank
Cobb, the Greens and the Collapse of the Left
Felice Pace
Wilderness, Politics and the Oligarchy: How the Pew Charitable
Trust is Smothering the Grassroots Environmental Movement
Walter A. Davis
Of Pynchon, Thanatos and Depleted Uranium
William A.
Cook
The Agony of Colin Powell
Phyllis Pollack
Twas No Crank Call Love Affair: London Calling, 25 Years Later
Poets' Basement
Klipschutz, Albert, Ford
Website of the Weekend
Abu Ghraib: the Taguba Annexes
October 8,
2004
Jennifer Loewenstein
The
Israeli Invasion of Gaza
Moshe Adler
Edwards' Gambit: He Hoped No One Would Notice the Similarities
David Swanson
Media Blackout: Press Continues to Ignore Labor's Opposition
to Iraq War
Dave Zirin
CounterPunch Contest: Let's Name the New DC Baseball Team!
Rep. Ron Paul
The Draft is a Form of Slavery
William S. Lind
Keeping Our SA Up
Samar Assad
Kerry v. Bush: No Difference When It Comes to Israel / Palestine
Jim Ingalls
and Sonali Kolhatkar
The Elections in Afghanistan
October 7,
2004
Dave Lindorff
All
Out of Volunteers: A Draft is in the Air
Masha Hamilton
Fear in Kandahar
Christopher
Brauchli
Master of Corruption: the Ripening Scandals of Tom Delay
Jason Leopold
Is There Still Time to Impeach Bush?
Bruce K. Gagnon
Bombing the Panhandle: Fighting the Pentagon in Rural Florida
Meredith Kolodner
Where
is the Urgency?: The Anti-War Movement's Election Year Challenge
October 6,
2004
Jeffrey St.
Clair
"Please,
Dude, Can I Take Them Out?": Targeting Civilians in Fallujah
Ron Jacobs
Going
Nuclear: the Ghost of Edward Teller Lives
Michael Colby
The National Flip-Flop: Suddenly Bush is Unfit to Lead?
Tarif Abboushi
More of the Same: Israel Wins the Debates
Matthew Behrens
Canadian Firms Profit from Iraqi Blood
Mike Whitney
Rethinking WMDs
John Pilger
Stealing Diego Garcia
Ben Tripp
Kerry's "Triumph"
Kevin McKiernan
Cheney's Poison Lab: Wrong Time, Wrong Target
Patrick Cockburn
Elections
Will Not End the Fighting in Iraq
Website of the Day
Is There an Islamic Problem?
October 5,
2004
Anthony Loewenstein
Rupert
Murdoch and the Marginals: "Personally Creating Outcomes"
Mark Clinton
and Tony Udell
The
Suicide of an Iraq War Veteran
Greg Bates
Trading
Idiots: an Open Letter to Eric Alterman
Dave Lindorff
What's
the Frequency, Karl?
Norm Dixon
Why Washington Won't Save Darfur Villagers
Larry Kearney
God Talk and Burning Children
Bill Linville
Dirty Politics in the Land of "Clean" Government
Gary Leupp
What
Edwards Should Ask Cheney
Website of
the Day
A Guide to Halliburton for Tonight's Debate
October 4,
2004
Diane Christian
The
Gates of Hell
Joshua Frank
An Interview with David Cobb
Doug Giebel
Incurious George: What If Bush Didn't Lie?
John Chuckman
Strange Victory: Sen. Obvious and the Pathetic Lump
Ramzy Baroud
Reverse the Picture: Anatomy of a Palestinian Outrage
Julia Stein
Remembering Mario Savio and the FSM
Sean Donahue
Outsourcing
Terror: Kerry and Special Forces
Website of
the Day
Mapping
Mt. St. Helens as She Rocks
October 2 /
3. 2004
Paul Wright
John
Kerry on Criminal Justice
Kathleen and Bill Christison
An Exchange with Israeli Historian Bennie Morris
Kathie Helmkamp
My Son Trent: a Marine Who Doesn't Want to Kill
Phillip Cryan
Indigenous Mobilization in Colombia
Lenni Brenner
The First Ex-Catholic Saint: Memories of Mario Savio
Fred Gardner
Pot Shots: In Case You Missed "Montel"
Ron Jacobs
It Did Happen Here: When Neo-Nazis Terrorized Olympia
Ben Tripp
Sticker Shock
William S.
Lind
The Grand Illusion: Iraqi Security Forces
Dave Zirin
The Swindle of the Century: Baseball Comes to DC
Dave Lindorff
Lies from the Great Debate
Luscon Pierre-Charles
Haiti's Elections: a High-Tech Sham is Underway
Zoe Moskovitz
& Sasha Kramer
Separating Lies from Truth About Haiti
Nelson P. Valdes
Habana Night vs. Latin American Scholars in Vegas: 61 Banned
Cuban Academics
Alan Farago
The "Ownership Society" and the End of the Everglades
Nancy Haley
What is the Historical Jesus Trying to Tell Us?
Alex Billet
Long Live The Clash: London Still Calling After 25 Years
Steve Fesenmaier
Save and Burn: The War on Libraries
Poets' Basement
Smith, Holt, Albert
October 1,
2004
Steve Breyman
Kerry's
Missed Opportunities
Rose Gentle
My
Son Died for a Lie
Lee Sustar
Iran
in the Crosshairs
Ralph Nader
What
We Didn't Hear at the Debate: Where's the Exit Strategy?
Walter Andrews
We Are Less Secure Now Than Ever
Mike Whitney
Pandora's
Government
Mickey Z.
Debate
This
Saul Landau
The
Iraq Invasion: Lessons from the Pinochet Cases
Hot Stories
Alexander Cockburn
Behold,
the Head of a Neo-Con!
Subcomandante
Marcos
The
Death Train of the WTO
Norman Finkelstein
Hitchens
as Model Apostate
Steve Niva
Israel's
Assassination Policy: the Trigger for Suicide Bombings?
Dardagan,
Slobodo and Williams
CounterPunch Exclusive:
20,000 Wounded Iraqi Civilians
Steve
J.B.
Prison Bitch
Sheldon
Rampton and John Stauber
True Lies: the Use of Propaganda
in the Iraq War
Wendell
Berry
Small Destructions Add Up
CounterPunch
Wire
WMD: Who Said What When
Cindy
Corrie
A Mother's Day Talk: the Daughter
I Can't Hear From
Gore Vidal
The
Erosion of the American Dream
Francis Boyle
Impeach
Bush: A Draft Resolution
Click
Here for More Stories.
|
Weekend Edition
October 30 / 31, 2004
Will Kerry
Enjoy a Similar Savior?
How
Monica Lewinsky Saved Social Security
By
ROBIN BLACKBURN
[This
essay is excerpted from CounterPunch's hot new book, Dime's
Worth of Difference.]
Had it not been for Monica's captivating
smile and first inviting snap of that famous thong, President
Bill Clinton would have consummated the politics of triangulation,
heeding the counsel of a secret White House team and deputy treasury
secretary Larry Summers. Late in 1998 or in the State of the
Union message of 1999 a solemn Clinton would have told Congress
and the nation that, just like welfare, Social Security was near-broke,
had to be "reformed" and its immense pool of capital
tendered in part to the mutual funds industry. The itinerary
mapped out for Clinton by the Democratic Leadership Committee
would have been complete.
It was a desperately close
run thing. On the account of members of Clinton's secret White
House team, mandated to map out the privatization path for Social
Security, they had got as far down the road as fine-tuning the
account numbers for Social Security accounts now released to
the captious mercies of Wall Street. But in 1998 the Lewinsky
scandal burst upon the President, and as the months sped by and
impeachment swelled from a remote specter to a looming reality,
Clinton's polls told him that his only hope was to nourish the
widespread popular dislike for the hoity-toity elites intoning
Clinton's death warrant.
In an instant Clinton spun
on the dime and became Social Security's mighty champion, coining
the slogan "Save Social Security First".
Let us now reconstruct the
plot in greater detail.
In the mid-1990s pessimism
about the future of Social Security was rife in seminars, conferences,
op-eds and learned papers by which elite consensus is fashioned.
The media lent an eager ear to charlatanry from outfits like
the Third Millennium, which ventriloquized a supposed consensus
amongst youth that the program would not be there for them when
they came to retire and that consequently their best bet
was to take their FICA payments and put them in a private share
account in soar-away Wall Street. Third Millennium released artfully
contrived polls claiming to show that, for example, more young
Americans believed in UFOs than in the future of Social Security.
In fact the poll had no question linking the two propositions
but this didn't stop lazy columnists and editorialists from picking
it up and kindred 'findings' such as that General Hospital would
outlast the program or that a bet on the Super Bowl was a more
rational use of money.
Third Millennium was, of course,
a front for the privatization lobby. But it did tap into a vein
of public anxiety and skepticism concerning Social Security finances
and, with the stock market soaring upward, its Wall Street connections
were an asset not a liability. Whatever the exaggerations of
the privatizers, the claim that an aging society would have to
meet rising costs was not in itself wrong. The idea that "something
must be done" was widespread and many expected that Clinton
would follow up his capitulation to Republicans on welfare with
a deal on Social Security. But he didn't, thanks to the zaftig
young woman in a blue dress who caught his eye in 1995.
We have this on the authority
of high-ranking members of the Clinton Treasury who gathered
in Harvard in the summer of 2001 to mull over the lessons of
the 1990s. At that conclave it was revealed that on Clinton's
orders a top secret White House working party had been established
to study in detail the basis for a bipartisan policy on Social
Security that would splice individual accounts into the program.
Such was the delicacy of this exercise that meetings of the group
were flagged under the innocent rubric "Special Issues"
on the White House agenda.
What was in fact being prepared
for the President was precisely that second dose of welfare reform,
this time targeted on the very citadel of the New Deal, the Social
Security program Roosevelt himself established.
The "Special Issues"
secret team was set up by then-Deputy Treasury Secretary Larry
Summers (later elevated to Treasury Secretary and now President
of Harvard) and Gene Sperling, the head of the Council of Economic
Advisers. The Deputy Treasury Secretary's fondness for schemes
to privatize Social Security comes as no surprise. As Chief Economist
of the World Bank in the early 1990s Summers had commissioned
a notorious report, "Averting the Old Age Crisis",
that argued that Merrill Lynch and Fidelity would be better at
pension provision than any government. In fact governments should
offer only a safety net and farm out their power to tax payrolls
to private financial concerns, which would run mandatory funded
pensions on the Chilean model. The task of the Special Issues
group was to find an installment of privatization that could
reconcile realistic Republicans and Democrats, and be sold as
still honoring most existing entitlements.
Participants at the Harvard
conference conceded that severe technical problems beset efforts
to introduce commercial practices. The existing program has low
administration costs whereas running tens of millions of small
investment accounts would be expensive. The secret White House
team sought to finesse the problem by pooling individual funds
and stripping down the element of choice or customer service.
But Summers was unhappy: as one Team member now recalls it, "Deputy
Secretary Summers was fond of saying that we had to guard against
the risk of setting up the Post Office when people were used
to dealing with Federal Express". And pooled funds were
also to be avoided because they would risk government control
of business.
Some members of the team also
worried that allowing employees the option of setting up their
own accounts would soon turn into a "slippery slope",
since the defection of the richest five or ten per cent of employees
would soon undermine the program's ability to honor its commitments
to existing retirees.
Nevertheless, under Summers'
guidance, the secret team pushed forward. There were high hopes
that the President would embrace what had by now had become a
detailed blueprint: "The working group's estimates were
at the level of detail that it was determined how many digits
an ID number would have to be for each fund and how many key
strokes would therefore be required to enter all of the ID numbers
each year."
Clinton was kept up to date
with briefings every few weeks and in July 1998 attended one
of the "Special Issues" meetings himself. But in that
same month he was served with a grand jury subpoena. A month
later he finally acknowledged a sexual relationship with Monica.
By the end of 1998 the secret
team concluded with heavy hearts that the escalating Lewinsky
affair might well doom all their efforts. The President was desirous
to be seen doing something dramatic for Social Security, but
not anything risky. It could be controversial, but controversial
in the direction of doing more for the program, not endangering
it. As one team member put it this summer in the Harvard conclave:
"Toward the end of 1998, as the possibility that the President
would be impeached came clearly into view, the policy dynamic
of the Social Security debate changed dramatically and it became
clear to the White House that this was not the time to take risks
on the scale that would be necessary to achieve a deal on an
issue as contentious as Social Security reform."
Clinton was so desperate for
an approach that would prove popular that he was even prepared
to disappoint Wall Street. "The President decided to follow
a strategy of trying to unite the Democrats around a plan that
would strengthen Social Security by transferring budget surpluses
to Social Security and investing a portion in equities."
In his 1999 State of the Union
address Clinton seized the initiative from the privatizers with
a bold new plan that gave substance to the "Save Social
Security First" slogan. He proposed that 62 per cent of
the budget surplus should be used to build up the Social Security
trust fund. He promised to veto any attempt to divert Social
Security funds to other uses, and he urged that 15 per cent of
the trust fund should be invested in the stock market, not by
individuals but by the Social Security Administration.
Part of the cunning of this
approach was that it stole a Republican theme. While rejecting
individualization it insisted that Social Security funds should
not be spent on other programs or on tax cuts. Republicans had
urged that Social Security taxes be placed in a "lock box"
and soon Clinton himself was using the term. Not content with
this Clinton also offered public subsidies to Universal Savings
Accounts that would be set up outside Social Security and not
at its expense. This was a residue of the commercializing approach
but it won few plaudits from the privatizers as it was a voluntary
add-on to a strengthened public program.
Federal Reserve chairman Alan
Greenspan was willing to see the budget surplus pledged to Social
Security but he denounced the plan to invest the trust fund in
equities on the grounds that it would lead to government interference
in business. A writer in the New York Times, January 25,
1999, warned that if the trust fund was allowed to invest in
stocks and shares it would be impossible to prevent the politicization
of investment: "The danger is that Congress will meddle,
for example, steering funds into environmentally-friendly companies
rather than, say, tobacco companies."
The next day Milton Friedman
contributed an excited piece to the Wall Street Journal
warning that Clinton was embarked on a different type of slippery
slope to that pondered by his secret team: "I have often
speculated that an ingenious way for a socialist to achieve his
objective would be to persuade Congress, in the name of fiscal
responsibility, to (1) fully fund obligations under Social Security
and (2) invest the accumulated reserves in the capital market
by purchasing equity interests in domestic corporations."
Clinton had promised that the trust fund would be insulated
from political pressure and that only 15 per cent of the trust
fund would be invested, but Friedman was not at all convinced.
Clinton was also attacked for
"double counting" when he pledged the budget surplus
for Social Security. But accounts at the Harvard conference make
clear that this concerned the pledge about the surplus aimed
at separating the trust fund from the rest of the Federal budget.
The proposal to allow the trust to hold a range of assets, not
simply Treasury IOUs, would not only give Social Security real
assets but would also create a powerful new lever on economic
policy, something that Greenspan was jealously aware of.
Despite such attacks the Clinton
plan as a whole went down very well with the American people.
Republicans were swiftly moved to insist that they too would
give priority to Social Security. Pessimism about the future
of the program was replaced by a growing consensus that the program
must be and could be saved. All that was needed was
the will and a determination not to squander the trust fund.
Under the lash of the Lewinsky
crisis, a President had issued a full-throated endorsement of
the Social Security system. It was a terrible blow to a spectrum
of opinion that stretched from the Cato Institute and Third Millennium
to many New Democrats, including Senator Joseph Lieberman, who
has proclaimed the need for individual accounts in the name of
"choice". In his presidential campaign Al Gore, we
should note, publicly opposed the idea of the Social Security
trust find holding a range of assets.
Even the Republic leadership
sheepishly rallied to the notion that the surplus on the Social
Security fund should be spent on nothing else. Just four days
before the election Governor Bush told a crowd in Saginaw, Michigan,
that protecting the Social Security trust fund was going to be
one of his top priorities. The employee's Social Security taxes,
he promised, were "only going to be spent on one thing
what they're meant for Social Security. We're not going
to let Congress touch them for any other reason." Less than
a year later the Congressional Budget Office forecast that the
administration would need $9 billion from the Social Security
Trust Fund to balance its budget and much more next, even as
Bush reassured Democratic Senate Majority leader Tom Daschle
that he wouldn't raid the famous Social Security lock-box.
Bush's predicament over the
trust fund was the more edgy because he wanted to introduce individual
accounts into Social Security and has set up his own Commission
to work out the best way to deliver this taste of privatization.
The Bush White House web site featured an explanation of the
promised "reform" which fulsomely insisted that all
Social Security must be respected and that the private accounts
would not be allowed to jeopardize them in any way.
The Democrats can blame the
President for creating the budget problem by an unwise tax cut.
If they had the guts the Democrats could have found a strategy
for economic recovery by revisiting the Social Security debate
of the late nineties, when Clinton not only coined the slogan
now giving grief to his successor 'Save Social Security
First' but also boldly proposed separating the trust fund
from the Federal budget, allowing the trustees to pursue an investment
strategy of its own.
The logic of Social Security
was once memorably explained and defended by Larry Summers' brilliant
uncle, the Nobel laureate Paul Samuelson. Compulsory social arrangements
of this sort were, he explained, a necessary defense against
greedy and short-sighted "free riders"; "if
all but one obey, the one may gain selfish advantage by disobeying
- which is where the sheriff comes in: we politically
invoke force on ourselves. Once social coercion or contracting
is admitted into the picture the problem (of free riders) disappears."
Samuelson was impelled to show that individualism needs collectivism:
"That the Protestant ethic should have been instrumental
in creating individualistic capitalism one may accept: but that
it should stop there is not necessarily plausible. What made
Jeremy Bentham a Benthamite in 1800, one suspects, might in 1900
have made him a Fabian (and do we not see a lot in common in
the personalities of James Mill and Friedrich Engels?) Let mankind
enter into a Hobbes-Rousseau social contract in which the young
are assured of their retirement subsistence if they will today
support the aged, such assurance to be guaranteed by a draft
on the yet unborn." (This passage is to be found in Samuelson's
paper, "An Exact Consumption-Loan Model of Interest with
or without the Social Contrivance of Money", Journal
of Political Economy, December 1958.)
But by 1998 Samuelson's nephew,
Larry Summers, was busy undermining the social contract between
the generations and, as we have seen, it took young Lewinsky
to give it extra breathing space. In the process the Clinton
White House, mired in scandal as it was, found itself exploring
ideas of collective funding that went beyond the pay-as-you-go
principles that Samuelson enunciated. If generations are of
unequal size, and if the aging of the population gives rise to
increased retirement or medical costs, then it becomes wise to
introduce an element of pre-funding. Clinton and Gore eventually
settled on a strategy of using such a fund to pay down the public
debt and invoking the "lock box". But the papers at
that Harvard conference showed that sooner or later pre-funding
could not be confined to paying down the public debt, partly
because surpluses might swallow it up in a few years and partly
because it might not be feasible or advisable to do so.
The Harvard papers were not
the only evidence of new thinking on Social Security in the wake
of the impeachment crisis. In another part of the Clinton White
House an aide called Peter Orszag was working with Joseph Stiglitz,
then Chief Economist at the World Bank, on a paper entitled "Rethinking
Pension Reform: Ten Myths about Social Security Systems".
This constituted a powerful critique of the earlier World Bank
report commissioned by Summers. The paper, originally delivered
in September 1999, was later published in a book edited by Robert
Holzman and Stiglitz, entitled New Ideas About Old Age Security.
Its whole thrust is to defend public provision and to explore
forms of pre-funding that would assist this. Indeed the paper,
several of whose points are born out by the difficulties encountered
by Clinton's secret team, now give the opponents of privatization
a potent weapon.
The collapse of the markets
at the end of the Nineties bubble also meant that Bush and his
Commission had a much harder task ahead of them, before the focus
of terrorism changed the whole focus of Bush's agenda. Flawed
as it is, the case for privatization was superficially appealing
during the heady days of the late-1990s bull market. Indeed its
defeat at that time could turn out to have been decisive. On
the other hand the economic downturn makes more relevant than
ever the other prong of the original Clinton strategy, namely
the idea that the Trust Fund should acquire its own assets. In
a recession-hit economy these could include public bonds linked
to investment in education or urban renewal, or they could involve
injecting funds into sectors downcast by post-bubble blues. This
would, it is true, be to go further than Clinton ever suggested
but it would be fully in the spirit of many left proponents
of the original trust fund when it was added to the program in
1939 and it would be very well received by many sections of organized
labor, such as the folks at the Heartland Alliance.
In his famous tract "What
is History?" E.H. Carr debated the influence on history
exercised by Cleopatra's nose. Future historians of Social Security
will be able to intersperse their explanation of the intricacies
of COLAS, bend points and IPEs with at least a paragraph on the
political and intellectual consequences of Monica's beguiling
smile. She saved the day.
Robin Blackburn, a frequent contributor to CounterPunch,
is the former editor of The
New Left Review and author of the excellent history of the
slave trade, The
Making of New World Slavery and the new book from Verso Banking
on Death: the Future of Pensions.
Weekend
Edition Features for October 22 / 14, 2004
Alexander Cockburn
You
Can't Blame Nader for This
Rev. William Alberts
On Bended Knee: Faith-Based Deceptions
Willliam A.
Cook
Killing for Christ
Saul Landau
George W. Bush: a Man of His Words?
Bill Quigley
I Held the Bullet in My Palm: Masked Haitian Police Shoot Children
While Arresting Priest
Christopher Brauchli
Seal It With a Frown: What Compassionate Conservativism Really
Means
William S.
Lind
Fallujah and the Moral Level of War
Sharon Smith
Guilt Trippers for Kerry
Greg Bates
Kerrynomics: "Hurt the Ones Who Vote for Us"
Justin E.H. Smith
Is Lesser Evilism a Compromise with Evil?
Rebecca Evans
Tarnished Legacy: Pinochet and the Chilean Military
Mike Whitney
Al Hurra TV: the Second Invasion
M. Junaid Alam
Purchasing Individuality in America
David Krieger
Nuclear Non-Proliferation: Examining the Policies of Bush and
Kerry
David J. Ledermann
The Emperor's New Crumbs
Lawrence Reichard
Same Old FBI Story
Website of
the Weekend
Lie Girls: the Real Coalition of the Willling
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