Wednesday, March 09, 2005

Alpo Accounts: Round One to Dems, but only on points 

WaPo's EJ Dionne sums it up:

Where does this leave [Bush]? Dropping his call for private accounts carved out of Social Security would allow [H]im to win bipartisan approval for moderate fixes to make the retirement system solvent for decades. Alternatively, [H]e could put forward a serious and detailed plan for private accounts and invite an honest and instructive philosophical face-off with the Democrats on the future of social insurance. The lesson of the first round of the Social Security debate is that the public won't bet on Bush's ideas until he reveals the cards he's holding back.
(via WaPo)

Except we already know what the cards are. The reason Bush can't put his cards face down on the table is that he's got a losing hand. The incomparable Daily Howler explains the stakes (even better than Krugman did with "Bait and Switch", back):

[In 1983,] when the payroll tax was so vastly increased, baby-boomers were told that they were submitting those extra taxes to pre-pay the cost of their eventual retirement. If politicians decide the trust fund is a mirage, then those voters were massively scammed in one of human history’s biggest financial swindles.

(See Alan "Why Is My Nose Brown?" Greenspan's "Heist of the century", back)
But why would the Bushwingers do such a thing? Surely, ideology and pure meanness aren't enough to explain overturning a Social Compact that's lasted for almost 80 years?

Why? The short answer is this: Follow the money. Remember when Bush said "Some people call you the elites; I call you my base"? Let's see why the elites might want Social Security privatized. From one elite insider:

A bit about me: I am in my late 30's, a resident of New York City, and the founder and president of a Manhattan-based asset management firm. I have a BA from a top-ten university and an Ivy League MBA. I'm a lifelong conservative with a strong independent streak. ...

This week, I spoke to an executive at a large publicly-traded technology firm. ... This executive sees one shining beacon in the fog of increasingly strict accounting standards and a difficult business environment: The prospect of Social Security reform. He told me that he and many of this colleagues at other companies favor the creation of private accounts, because a new source of demand for his stock will help compensate for the increasing unattractiveness of his company from an investment perspective. This executive also made it completely clear (albeit in casual, friendly terms--which is perhaps the only way he would have voiced this sentiment at all) that he looked forward to private accounts "picking up the slack" that the new accounting rules and increasingly difficult business conditions in general will create. ...

This executive wants private accounts that invest in the stock market and his stock in particular. He sees private accounts as transferring risk from him to the public--risk, he surely knows, that is already being transferred through instruments such as IRA's, 401K's, and the explosion of mutual funds over the past decade.

He's profited handsomely from that transfer of risk. From a corporate perspective he wants that transfer to continue, and from a personal one he needs it to continue to support his lifestyle. ... This week I also spoke to a former co-worker of mine, who works at one of the largest investment banks in the world. We had a brief conversation about the private accounts issue. Predictably, there was no beating around the bush here; executives of investment banks and brokerages are known for direct, often crass language. He said: "I want that dumb public money coming across my desk."
(via TPM from the cunning realist

So, let me get this clear:

The Bushwingers want our Social Security money to (a) prop up the stock market and (b) maintain their personal lifestyles. When Alan "Why Is My Nose Brown" Greenspan talks about "bolstering the nation's low savings rate", that's code for doing those two things.

So, taking money out of my pocket and putting it into the pockets of those who already have more than enough is good why, exactly?

In Round One, we set that argument up. In Round Two, let's use it to score a knockout.

NOTE Apparently, Cheney thinks Bush has a mandate for a social security phaseout. You'd think, what with that crazy baldhead "Gigi" "Gannon," that he'd want to avoid that term. The wingers never learn, do they?

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