Social Security's Role
John Marshall defines the basic premise of Social Security:
The concept behind Social Security is fundamentally different. The first premise is that if you put in a lifetime's work there is simply a level of destitution below which society will not let you fall...
...People who made big bucks through their lives don't get a particularly good 'deal' from Social Security, if you insist on seeing it in investment terms. But that's a distorting prism, sort of like thinking you got a rotten deal on your medical insurance if you never have a catastrophic illness.
The concept behind Social Security is fundamentally different. The first premise is that if you put in a lifetime's work there is simply a level of destitution below which society will not let you fall...
...People who made big bucks through their lives don't get a particularly good 'deal' from Social Security, if you insist on seeing it in investment terms. But that's a distorting prism, sort of like thinking you got a rotten deal on your medical insurance if you never have a catastrophic illness.
posted by Management at 3:55 AM
1 Comments:
Because of where I was staying this morning I was able to catch only one brief bit of the Sunday shows. And that was the roundtable on Meet the Press.
It was a good panel, including one of my favorite reporters, Mike Allen of the Post. But what caught my eye were two exchanges. One was between Joe Klein and Paul Krugman on the Clinton legacy. Here's the key exchange ...
MR. KRUGMAN: I think it's just wildly up in the air. I mean, you know, there's enormous turmoil on the Democratic side trying to figure out--there's a lot of unity but there's a lot of turmoil about what the party stands for. And I just don't know. I mean, I can't--I dread the prospect of a Clinton run just because I think that would be--it would be an attempt to recreate the politics of the '90s when you had Bill Clinton, who was a president who managed to sort of triangulate. And I think we ought to have an election that's really about what what kind of country we're going to be and we won't have that if it's Hillary Clinton running.
...
MR. KLEIN: Paul, I have a question for you: What was it about the peace and prosperity of the eight years of the Clinton administration that you didn't like?
MR. KRUGMAN: No, I liked the way the country ran.
MR. KLEIN: I think that he had a real governing philosophy. It wasn't triangulation. It was moving us from the industrial age to the information age, and that's where the Democratic Party is going to have to move...
MR. KRUGMAN: There's a radical right...
MR. KLEIN: ...if it wants to have any role in American politics.
MR. KRUGMAN: There's a radical right challenge to America as we know it that's under way, and I think the Democrats--I mean, maybe Hillary Clinton can do this. I'm actually not opposed to her, right? But they need to make clear that they are going to turn back that tide, not blur it.
MR. KLEIN: The answer to a radical right challenge isn't a reactionary left response.
Marshall Wittman unequivocally gives the prize to Joe Klein on this one. But I'd like to offer what is not so much a disagreement as a different interpretation of just what was being talked about here.
I won't assume I know precisely what Paul meant. But my reaction on watching this was that the two were basically talking past each other, or perhaps that Klein was attacking an argument that Paul really hadn't made.
Again, I won't presume to speak for Paul. But here's my sense of this.
I was a big fan of Bill Clinton while he was president. Still am. And that doesn't just mean I liked him in some general sense as a political fan. On most policy issues, foreign and domestic, I was in line with his administration.
But I too think Clintonism is best left in the 1990s. And that's not because I've changed my view of his presidency or his policies. I simply think we were are operating in a profoundly different political moment and that the strategies and tactics that really did make sense then do not make sense now. The key point for me is that the difference is really not at heart an ideological one. And thus, to me, Klein's reference to a 'reactionary left' I think mistakes the point Krugman was making.
I want to leave the longer discussion of this issue to another post. But just to briefly describe what I'm getting at. First, we are now involved in political contests that cut to the very heart of the kind of polity we live in. Many are simply not compromisable. And I don't mean that merely or mainly in the sense that they involve points of principle that can't be compromised. I mean many are literally uncompromisable. They involve basic decisions over which way our society will go. Decisions must be made. When the boat is leaving the dock, at one point you've got to decide: stay on the dock or hop on the boat. It can't be compromised. There has to be a choice.
Second, and of course on a related level, the Democrats' position is profoundly different than it was in the 1990s, even given the fact that they lost control of Congress mid-decade. I often think that one of the blinders of folks who cut their teeth in the Clinton White House is an inability to grasp just how many of the strategies that worked for them then were tied to the overwhelming fact of holding the White House.
I know they know that at some level. But I sometimes wonder how deeply the point has sunk in because I've seen more than a few of them using similar approaches in opposition when they have little hope of success. It's sort of like in the childhood game 'King of the Hill'. Imagine if you'd perfected tactics for when you're on the top of the hill knocking off challengers and then tried to use those same approaches when you're one of the guys down at the bottom. It makes no sense.
The other exchange came earlier in the roundtable when Klein let us know that he is still every bit a private accounts man. (One would imagine the only Woody Guthrie biographer to embrace such an unfortunate stance..) But I was struck by his rationale ...
Well, it's kind of amazing and somewhat amusing to see the Republicans so much on the defensive on this issue right now. It's an unusual circumstance. I agree with Paul in that private accounts have nothing to do with solvency and solvency is the issue. I disagree with Paul because I think private accounts a terrific policy and that in the information age, you're going to need different kinds of structures in the entitlement area than you had in the industrial age. But it is very hard to do that kind of change under these political circumstances where you have the parties at such loggerheads.
This has always struck me as the weakest of arguments for privatization and frankly it seems beneath someone like Klein.
I would like to ask Klein what it is exactly about Social Security that makes it appropriate to the industrial age but not the information age. If it is phased out in the next few years that would be one objective sign that it couldn't withstand the politics of this new economic era. But that would be a circular argument.
If anything I would think there's a much stronger argument that Social Security with its guaranteed benefits is more suited to this age than the last one, given how the increasingly transitory nature of work and the pressures of globalization are undermining the basis of defined benefit private sector pensions.
The real point, though, is that when you set aside all the practical matters of debt and transition costs, this is an ideological debate -- or to put it less antiseptically, a debate over different sets of values.
The idea behind private accounts is that people should rely on themselves alone and bear the consequences of their successes and their failures and random chance on their own shoulders. If things don't pan out for you in retirement, that's something to take up with your children.
The concept behind Social Security is fundamentally different. The first premise is that if you put in a lifetime's work there is simply a level of destitution below which society will not let you fall. Maybe you made so little during your working years that there wasn't enough to save. Or maybe you just didn't plan ahead well enough. Or maybe you suffered some misfortune. Whatever. If you worked you won't be destitute when you retire. People who made big bucks through their lives don't get a particularly good 'deal' from Social Security, if you insist on seeing it in investment terms. But that's a distorting prism, sort of like thinking you got a rotten deal on your medical insurance if you never have a catastrophic illness.
I like to think of this as the moral equality of work. In our society, we allow the market to assign all manner of different cash values to different sorts of work or even the same sorts of work under different circumstances. And by and large, within some very small limitations like the minimum wage or certain non-discrimination laws, most of us think this is how it should be. I certainly do. (In this sense, I think collective bargaining amounts to another competitive arrangement within a market economy -- though doctrinaire free market folks have always seen it in contrary terms.)
But the cash value of work isn't the same as its moral value. And if you look at the values imbedded in all those Social Security actuarial tables, you see this principle: whether you were a janitor or a fast-food worker or a doctor or a tycoon, if you worked during your working years you shouldn't be left destitute when your working years are over (retirement) or when, through no fault of your own, you can't work anymore (disability). No matter what. The common denominator is a life of work -- skilled or unskilled, impressive or unimpressive, remembered or forgotten. It doesn't matter.
In any case, that's only one way to look at it. More prosaically, you might just say that there are certain risks we choose to share across society. And this is one of them.
These are basic disagreements about how much we owe each other, how interconnected we are. And they're real disagreements with smart folks on either side. They existed in the 1930s; they exist today; and they'll exist in 2030s. The Internet and floating currencies and total quality management -- none of them settle the question. Klein should have the courage of his values and not pass this off on gizmos and gadgets.
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