Shock Doctrine and Social Security
It's come to this. The biggest economy in the world is so flat on its back that the Disaster Capitalism vultures and hyenas are circling America's safety net as if we were Haiti.
Digby on the Obama-blessed Summit to Kill Social Security and Medicare Once and For All:
Depending on the details about how these accounts would be handled, it would be a fine place to wind up --- except that t is extremely likely that it will wind up with a bunch of Masters of the Universe getting to play with the American people's retirement money with the full guarantee of the government and making a profit at it. None of that has worked out very well for us in the past.
The Republicans might be expected to go along with this for obvious reasons, but I suspect they will hold out for something better. They have time. Getting "mandatory private accounts" on the menu, especially at the hands of Democrats, would be a huge coup and they will be willing to let that settle among the people in the hopes of a better deal down the road. (Not to mention allowing the unpleasant memories of Lloyd Blankfein and Jamie Dimond to fade from their minds.) It seems strange to think in this "too big to fail" era that anyone would agree to what amounts to another mandate to pay private industry directly, but maybe over time we'll all get used to the idea that the taxpayers must hire middlemen to do the government's job and pay them a premium for the privilege. It's the ultimate privatization of government and a beautiful scam for the private sector which bears no risk since the taxpayers will always be on the hook. All those years of right wing anti-government propaganda will have finally paid off.
I respect DeLong, but I think this is the wrong approach and the Democrats should not even entertain this idea. Watching what's happening in Greece right now, where pensioners are having their minimal checks cut in half because the government engaged in crazy financial schemes and the rest of Europe is now demanding austerity, reinforces my belief that we should not make any decisions right now about social security. This is a shock doctrine moment and the best thing to do is keep the existing safety net completely off the agenda.
Read the whole thing.
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1 comment:
Aside from the timing of SS reform, there are difficult choices if one does not trust individuals to control their own 401k-like SS-reformed accounts.
If you semi-deregulate, you have the legitimate concerns expressed the author-- from govt and interest group controlling a valuable resource.
But the status quo is untenable and, beyond that, unjust. First, there's SS's anemic average rate-of-return-- and the injustice of sticking that to the working poor as their primary nest egg.
Second, maybe Obama is bothered that SS results in a negative rate-of-return for African-Americans; they put more into it than they get out. I wish all Democrats (and GOP'ers) were bothered by that, but such outrage is all-too rare.
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