HULK SMASH!!!
OT, Digby has a brilliant
explanation for why we are fighting a cold civil war. Title: A Very Old Story
top of the page for now.
"Privatization" of Social Security is a code name for yet another Republican reverse Robin Hood scheme to take from everybody else and give to the rich.
Those Wall Street sleazes who have so enriched themselves by sloughing off money from funds and investors must be wetting themselves already in anticipation of what they'll get once money goes from Social Security into their greedy little hands.
Forced savings is becoming a staple of private employer 401(k) plans. Many plans now use default enrollment. Upon employment, three percent of your pay is deducted to go into the 401(k) plan, unless you affirmatively act to stop it.
Atrios, For more fuel for your argument, see the work of Richard Thaler (among others) who studies the way that people save -- or do not save, more often -- when left to their own devices. Yes, the Rethugs will view efforts to maintain S.S. in its current iteration a continuation of democrats patronizing them ("People should be responsible for their own future," they'll cry!). But given Thaler's findings, that is not borne out. Leaving aside the fact that Thaler's data is reality-based and will thus be rejected by Rethugs, I don't want to wind up paying for them to sip soup through a straw when they're 85 because their "personal responsibility" failed them.
In terms of companies seeking to serve their own interests - which is both utterly natural (in the old sense) and perfectly predictible (which is why, oddly enough, the idea of a neutral civil service executing investment decisions was brought up in the first place), I've always used as the best example an incident involving American Express (tm). One of their very best people became so enraged that one of his clients dared suggest that he was not performing well for her that he murdered her. It seemed a little excessive, but apparently the client was insufficiently appreciative of his efforts....
That said, I'd much prefer if people were able to invest in a local pizza shop than well..90% of all the stocks out there.
Even US funds at this point is a relativly bad investment.
WIthout the actual debate of the nature of so-called "investments" (here's a hint. Very little of the new money entering the system comes out of profits), the entire thing is just nonsensical.
So, how about bringing up Harken again?
Bush was never actually exonerated. The investigation was put on hold.
Scorched-earth time, remember?
This is why we need to draw a line in the sand and demand a filibuster of this. In the past, we learned that we can't trust Congressional dems to be strong, so we need to be strong for them and let them know that we will recruit and fund primary opponents to run against those who are too cowardly to oppose this.
Is the enabling legislation going to be called "The Financial Services Industry Perpetual Guaranteed Profitability and Full Employment for Brokers Act of 2005'?
Because it should be....
When I had a 401k I was amazed at the blizard of statements, forms, and small charges (charges, in effect, for all that personalization) that accrued. After many years in the program, and despite picking the most conservative bond fund, there was less money in it than I started out. Those who picked any of the more agressive options lost even more heavily. Those who traded their 401k on etrade lost the most.
making social security into forced savings via friends of bush in the funds management industry will end up just fleecing 98% of participants. It will seem like a good plan in a rising market but in a falling market will worry and depress an entire workforce.
If the intention is to provide a reasonable and steady rate of return for everyone then the government should use social security to buy its own government bonds and then send everyone a yearly statement showing their retirement funds growing 5% year on year. Anything else is a casino with the pit bosses being etrade, schwab, and the rest.
GWPDA,
"insufficiently appreciative" sounds like something we'll be hearing a lot more of in the coming days.
Yes, investment at the point of a gun - sound financial practice if I ever heard it. Obviously, it'll depend on what the received definition of 'gun' is....
::Anything else is a casino with the pit bosses being etrade, schwab, and the rest.::
There you go; that's the kind of language Congressional Democrats need to learn to use.
Somewhat OT
I am just beginning to clear my head since the terribly disappointing election results, followed by Bush gleefully declaring a broad victory.
What I hope to see Democrats do is:
1. Stand their ground on all important issues such as social justice and civil rights (That's why we're Democrats)
2. Next time, our candidate should attack wrong ideas, but not attack people and personalities. For instance, I think attacking Bush so personally, so often, just galvanized anyone who might have had the slightest sympathy for him.
3. I think Kerry did an outstanding job, and I think he would have made an excellent President. That being said, I hope our next candidate is more of a 'connector' with people. A connector is not an appeaser! He/She is a person who can stand firm, yet warm up to, and gain the trust of many. I am inspired by Barack Obama.
Trimming off pennies. 'Office Space' writ large.
I haven't quite caught up with this.
Can anyone tell me if this 'Forced savings' idea is something like the australian superannuation scheme, where citizens must put away a percentage of their salary each year (more usually, their employers do) only to be accessed after retirement age?
Because if it is, that system works reasonably well here.
I saw that article about Morgan-Stanley, et al, also. The media and Bushco make light of the corporate scandals, but some of us were truly shaken by them. I see all of them in cahoots now to rob me. I'm sure that I'm not alone. I've put a lot of money overseas, but that may not be enough of a hedge.
I can't believe we still have to live in Bushworld for another four.
-- Regressive politicians shovel public money into markets
-- Billions (trillions?) are looted
-- Looters share with the GOP
-- Repeat
Enronification is a criminal pattern we should be wise to already.
Res Ipsa Loquitor -
It's all about Personal Responsibility! I love the Dems argument that Bush is only giving tax cuts to "rich" people like me. Here's an idea - now that we know the country is split 51% - 48%, the 48% who actually care about the poor can give up their tax cuts and solve the problem, starting with billionaire Teresa and multi-millionaire Edwards. I'm keeping mine - I earned it.
OK, I'm 23 and I don't have a freaking clue about anything to do with Social Security. All I know is, I'm not counting on it for anything. But I have a question - would this be really mandatory for all American workers to do? I don't know anything about the stock market!! This scares me. Could I just say, "No, I don't want to do this, give me my money?"
Baby Boomers! Prepare to work forever! I'm going to make a kick-ass little old lady lawyer.
Once again, this is part of an assault on the New Deal. Our good Republican friends are trying to take us back to the system that was in place before FDR came along.
Unfortunately, that system failed spectacularly in 1929. It failed less spectacularly several times before that as well -- 1907, 1893, and sometime in the late 1870's, if memory serves.
They either do not know or do not care that the New Deal was not conjured out of thin air. It was a series of responses -- not all of which worked -- to what had gone wrong and resulted in the Great Depression.
So we can look for another one of those eventually, too. But it'll be a small price to pay to keep homosexuals from marrying each other!
I don't have time to go into this in detail, but my new webpage is going to be an extended, fact based essay on the Myth of Social Security pravitization. You can probably find the first two installments if you want to look for the site.
Bottom line: there is no economic model that will return historical returns on stocks that would not fix the Trust Fund on the way. 2% average productivity growth funds the system with no change in payroll tax, no change in retirement age, no change in benefits, and no injection of general funds. And that is not me talking, that is based on numbers drawn right from the Report of the Trustees of Social Security.
Social Security was in crisis in 1982, it was still smarting a bit in 1996, it is fixed today.
Do what seemingly no one does: read the damn report, look at the economic numbers and models. And if you like bring back a number based model that contradicts my site's motto:
If Privatization is Necessary it Won't be Possible. If Privatization is Possible it Won't be Necessary.
Choose to live in a reality-based continuum:
http://www.ssa.gov/OACT/pubs.html
Yah, I just love the institutionalization of greed and callousness. We don't see our elderly out and about that much, so what the hell should we care?
I will use any money the government sees fit to give me back that is already mine (hundreds of thousands of dollars) and I will use what I can to take care of our elderly and our sick. You damn well can count on that. It is obscene to shit on people who have worked and taken care of you and the country their whole lives.
People are very vulnerable when they are old and even more so when they are old and sick. It is our duty as human beings to take care of those of us who cannot care for themselves.
Roddy -
It never fails - any argument from the left has to contain vitriol to make a point. W stands for WINNER, and that's what America wants. Let's join together and make this happen.
If there's anyone in need of a recent example of investment funds/firms gleefully looting assets that were subject to federal requirement and (perhaps unlike "privatized" Social Security would be) covered to some extent by Federal insurance, see the hilarous accounts (in Michael Lewis' _Liar's Poker_) of the fleecing of greenhorn S&L executives by Salomon Bros and other investment banks during the early to mid 80s.
Tena -
It's the same ole song from the Libs - let's take care of those who can't take care of themselves. Privatizing SS has nothing to do with the elderly - it's all about the young people entering the job force. Hundreds of thousands? If that were the case, wouldn't you want to keep that instead of putting it into SS? Just a thought?
They either do not know or do not care that the New Deal was not conjured out of thin air.
He knows and all Dumbya really wants is revenge for Prescott Bush. Roosevelt charged Dumbya's granddaddy under the "Trading With the Enemy Act". The enemy in question? Adolph Hitler. Granddad's nickname at the time? "Hitler's Angel." Democrats knew how to fight back then.
Could I just say, "No, I don't want to do this, give me my money?"
Bshahahahha! Short answer: No. The whole point of this is for them to be able to take your money.
Hecate - yeah, isn't it just fabulous how naive these people are? "Oh boy, I"m going to be rich! Yeah me! Fuck everybody else!"
Like people haven't learned that this government never has our best interests at heart? What a cruel joke this is and the punch line is going to leave them gasping.
Yep, I intend to take care of as many helpless people as I possibly can. That is my job as a human being.
My job as a human is not to be as rich as I possible can be. We are perfectly comfortable now and I cannot be happy with abundance knowing that my fellow humans are suffering because I have so much and they have so little. That to me is not living.
Sorry for the length of this. You think that firms cheating their investors should be "nuked" but doubt it will happen. As a lawyer who deals with class action litigation I can assure you that there is no way they will be. The only way to remedy small injuries (a few dollars to a few hundred dollars per claimant) is through a class action - otherwise it is just too expensive to sue well heeled corporations. The government (to the extent they bring a suit) usually only seek criminal penalties and a promise to cease a practice. Sometimes a state AG will bring a parens patrie action on behalf of consumers but it is the exception - not the rule. The majority of consumer class litigation is handled by private firms applying federal rules of civil procedure. To certify a class certain pre-requisites must be met such as proof that class members all suffered the same harm and that it can be easily proven by way of common evidence. In the context of trading harms such as you talk about, courts are loath to grant class certification because while some class members were harmed, some were not and some may have even benefitted from the trading practice. A recent Third Circuit case addressing almost the same issue reached this exact conclusion - there was no way to certify a class therefore, the case could not continue as a class action. Accordingly, unless you are willing to spend tens or hundreds of thousands on fees and expenses you will not be able to recover your hundred dollars. A second reason why consumers will be screwed in the context of securities cases and in any other class litigation is that federal judges have a tremendous amount of power when determining if the federal pre-requisites for certification have been satisfied. This has nothing to do with activist or “conservative” jurists (a false distinction to begin with since a judge's refusal to act is, in and of itself, an exercise of his power) - it is the judges job to make these determinations. Accordingly, I think judges who are philosophically opposed to class litigation and plaintiff litigation (hint - Bush appointees) will simply find class certification is inappropriate. Sorry to sound negative (I am not even a med mal lawyer - those guys are suicidal) but America better get used to corporate excess since we are about to take another step back to the 19th century when "malefactors of great wealth" ran the country (to quote my favorite republican president T.Roosevelt).
Want to appeal to young people's selfish interests? Tell them that their parents are going to be living with them in 20 years if SS gets hosed up.
I've never liked the idea of being part of a stock-owning society. The stock exchange ensures that exchanges, not a company's performance, has more impact on stock value. Not to mention the fact that it forces Americans to employ greed and the love of money and more money as the sole motivating factor. How often do people who invest in companies take pride in that company? More often they will either tell you honestly to your face, or lie to you to the contrary, but they are in it for the money and nothing more.
This notion that we as a society should be market based is pure greed talking and nothing more. The love of money is the root of all evil and I take great solace in reminding conservative christians I know that they're more interested in making money than they are making people's lives better. Jesus was was dirt poor. The apostles were dirt poor. But from the way you hear it Jesus wants us all to be rich. Yet doesn't the bible tell us not to seek the richness of this world? But rather to seek the richness of heaven instead?
hypocrisy plain and simple.
MYOB'
.
Tena,
KentuckyDem is young and just doesn't understand yet how rigged this whole game is. I, too, feel an obligation to take care of others who can't care for themselves. Old people selling pencils on street corners -- not the society I want to live in.
Are we missing the point on privatization? Seems to me the program is to arrange a demographic time bomb such that support for social security slowly erodes as a greater proportion of the electorate falls into the 'privatized' segment and a smaller proportion falls into the 'public insurance' segment. And, while the Republicans can claim they won't reduce benefits, these Republicans won't be around in twenty years, when there will be a hue and cry among those in the private segment to reduce benefits for the public insurance segment. It's a set up. It's a con, pure and simple. And we focus on the cost and deficit problem and the sure to arise problem of what happens when people get fleeced by Wall St. swindlers or loose out to market forces. Issues to be sure,, but it's not the game. The game is to set up the incentives so that social security is eventually dismantled by popular mandate....a big profit increase to the rich and the corporations.
I guess I'll be frist and mention that this idea reminds me of the Richard Pryor character in "Superman II" and the hommage to him in "Office Space."
i suppose raising the limit that can be SS taxes is off limits cause that WOULD BE THE FUCKING FAIR THING TO DO.
but dammit, i ain't even contributing. BWAH HA!
MYOB
What you say reminds me of a television show that I watched back before I turned it off forever. Jerry Falwell was on with the guy who had started the movement,"What would Jesus drive?" The moderator asked Falwell, the question (what would Jesus drive?) and he answered "I'm sure that Jesus would drive one of the very finest automobiles."
I would venture to say that Falwell doesn't even have passing knowledge of what Jesus was all about.
Can anyone tell me if this 'Forced savings' idea is something like the australian superannuation scheme, where citizens must put away a percentage of their salary each year (more usually, their employers do) only to be accessed after retirement age?
No, because as usual Bush is starting with the conclusion - that his friends at the investment houses should be allowed to manage peoples retirement money - and working back to the question via assumptions.
Australian super guarantees fees and charges cannot be more than the investment return. I don't know exactly but i believe the funds allowable are carefully controlled and very risk averse, yes? can you opt to invest your super in stock market mutual funds? or baskets of stocks? or individual stocks? do most people have their super in a conservative fund that earns at least money market interest rate and that is it?
if so, then we've not seen anything like those guarantees yet out of Bush.
Hey guys,
Kentuckydem asked a perfectly reasonable question. Its understandable how few younger voters don't understand the underpinnings of Social Security, most of the SCLM doesn't either. Also, we need to nurture our red state Democrats. Private savings accounts would be an option one presumes; but who knows, I doubt the Bushies do, and surely the Prez doesn't even understand the current system. They won't call it privitization either. Irony of ironies, it's not even that; it's a way of killing SS once and for all.
Atrios is quite right, enforced savings is a good way to frame what they have in mind. Lots of Americans already think that's what SS is. Among them Bill Maher, who has called SS just that. It's not.
australian super options:
RSAs are capital guaranteed. This means that contributions and interest on the account can only be reduced by fees and charges. RSAs are fully portable. This means that the balance of the account can be transferred to another RSA or superannuation provider at your request.
(and fees and charges cannot exceed interest returns)
if that is australian super in a nutshell, it isn't yet the flavor of US plans. The focus on the Bush plan seems to be "giving people the option to do what they want with their money" (including let other people legally rape their accounts).
As I've written before, my opposition to a forced savings plan
"Forced corporate subsidy" plan might be better, if slightly (though only slightly) less accurate.
Con,t:
It's an insured minimal retirement plan; its universal nature is fundamental to its solvency. Most important point to remember, SS is not insolvent; it takes in more than goes out, unlike the rest of the Federal budget, in fact the deficit would be larger yet, except for the excess SS takes in. And it's going to be like that for the next thirty-five years, folks. SS was fixed in the late eighties to compensate for the retirement of the baby boomers; the only reason there is any problem at all is due to the Republican administrations who used that compensating funds SS took in for other purposes.
So when Bush says, over and over and over again, as is his wont, that the dangers of reform are dwarfed by the dangers of doing nothing, he is full of crap, not to be put too fine a point on it. As full of crap as he was when he said the dangers of an invasion of a Iraq were dwarfed by the dangers of delay. Yeah, imagine how much more powerful Saddam might have been if we'd waiting two or three months for the inspectors to do their work.
Actually, the move to decimal pricing was designed precisely to make this kind of stuff more difficult.
Anyway, investments are risky, but you can choose your risk-reward trade-off. You can always just invest your money in gov't-insured CDs, or T-bills, or some sort of passive index fund.
Anyway, I don't think the conservative mantra is that markets are always efficient, but rather that the more free a market is, the more efficient it is.
While I have heard many arguments against SS privatization, and am against the proposals bandied about by the idiots currently in control, I think the dems are passing up an opportunity if they don't provide their own opposition plan.
The plan itself could rely on some sort of "private-like" account, where people pay into their choice of two or three annuity like options. People could receive individual statements, much as we currently do, describing a defined benefit they should receive after buying into the system. The choices would be based on the percentage of their payroll tax they wished to add (then people could decide on the relative risk that that particular plan or the fed would be unable to meet requirements in the future). Simultaneously, the dems should demand that the current obligations be fully funded, which the repubs keep suggesting would magically take care of itself through GDP growth.
Either way, change is going to happen. Presenting an alternative, reality-based plan which maintains a safety net for the elderly will only help the dems in 06 and beyond, after the repubs royally screw it up.
We should start referring to "privatization" as "enronization."
Regarding finding firms guilty - if corporations are legal individuals can they be sentanced to prison? E.g. kept from doing business for a specified amount of time?
"Reformed" Social Security, Republican-style, would be something like this: invest your money in a company like Enron, whose books are overseen by a firm the likes of Arthur Anderson, whose stock is traded on an Exchange run by the likes of Richard Grasso, in a system overseen by the likes of Harvey Pitt.
Years after your money has disappeared, various Ethics and Standards committees in the investment industry will grudgingly pass some lame recommendations that, rather than gain you any justice, will only lengthen the small print on the next prospectus that is already winging its way through the mail--toward you.
Finally, some idiot will write an editorial in the Wall Street Journal saying, "See, the system works! Left on it's own, the investment industry has regulated itself."
I foresee that my biggest dilemma regarding Social Security "reform" is going to be whether I bury my freed-up funds in my backyard in a pickle, or a mayonnaise, jar.
Privatizing Social Security is a terrible idea, representing the triumph of ideology over arithmetic.
Suppose you had a group of 30 people at age 65. Suppose they have an average life expectancy of 15 years. Suppose they have enough money among them so that, reasonably invested, it could pay them each the same moderate,inflation adjusted monthly payment for the rest of their collective lives.
Then divide that money into individual accounts. Suppose each year, one from the group dies. (This will fit our assumption about life expectancy.) At the end of 15 years, half of them are dead and have left some of their retirement money to their heirs. The other half are out of money!
That money that the first half left to their heirs, if left in a collective pool, would have generated enough earnings to keep paying until the last of the group dies at age 95.
Individual accounts will lead to an increase in poverty among the very old.
A while back the state of Florida offered its employees a so-called "investment plan" as an alternative to the regular pension plan. This plan of Jeb's was widely viewed as the prototype for W's vision of Social Security. Despite a hard sell, especially to newer employees- emphasizing, for example, that employees could take this money with them at any time (regular pensions in Florida take 6 years to vest)- only something like 6% of state employees took it. Since there were so few takers, and since the state had put so much money into developing the thing, the state legislature was considering FORCING new hires to take it. A conservative acquaintance of mine blames the fact that the Enron scandal was still fresh in everyone's mind at the time, but it seems to me that most people would still prefer a guaranteed return (even if less) to market gambling. Would enough people actually go for W's plan to make it viable? Or would he have to MAKE them take it?
how about "mandated banking."
how about "mandated banking."
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