Some Conversations for Matt to Join
I appreciate Matt Bai's quick and comprehensive response to my comments. Our points of disagreement are narrowing (in one case centering on a single paragraph in the book), but worth another round, if readers have the patience, because the underlying question is huge, and is also what Nathan Newman and Joan McCarter focused on.
In contrast to the biting declarative sentences that make up most of the book, Bai approaches his claim that there are no ideas with delphic detachment:
“if you were to sit down and design a progressive retirement program today, for today’s economy, would it look exactly like Social Security did in 1932? That is, would you finance it on the backs of wage earners, while leaving wealthy investors unscathed? Would you punish the self-employed?... Would you guarantee benefits for the wealthiest Americans while people who earned wages all their lives get just enough back to stay above the poverty line?”
(Incidentally, the payroll tax doesn't "punish the self-employed." There's a sticker-shock when you discover that you have to pay both halves of the 12.4% payroll tax for Social Security, but the economic effect is no different if your employer pays half for you. )
I'd still like Bai to actually answer the question – that is, tell me the retirement plan he would design and how he would manage the transition – but based on those questions, I guess that “replace Social Security” meant just changing the payroll tax and possibly high-end means-testing. In that case, it's certainly not true that “progressives will not even allow this conversation about modernization to happen.” Everyone and his brother has a proposal to reform the payroll tax, from raising the cap and creating an exemption or credit at the low end; to eliminating half the tax, as in the CAP proposal, and substituting general revenue; to using general revenues raised by equalizing taxes on investment to finance credits for people whose main burden is the payroll tax, as Mike Lind proposed in The American Prospect last month; to my colleague Maya MacGuineas' proposal to replace the payroll tax with a progressive consumption tax. Nor is means-testing unthinkable; after all, it was the Clinton 1993 budget that made Social Security benefits for the wealthy subject to tax. Not all of these are good ideas, but but they are all being widely discussed, and these conversations are much more interesting than the conversation on the right, where they're still beating the dead horse of privatization.
(It is true that progressives did not join the “conversation” with the Bush administration in 2005, but that was extremely wise, because it was a scam. Their intentions were malign.)
On poverty, Bai hits on another fascinating conversation that is thriving, and in this case he at least takes a stand: in favor of the “innovative” approach of Obama, who cites examples such as the Harlem Children's Zone, which attempt to rebuild all aspects of life in a community, as opposed to the focus on income and economic integration represented by Edwards and to some extent by the CAP report. The Obama approach, which is often referred to as “Comprehensive Community Initiatives” is one that I'm somewhat more sympathetic to, but not because it's more innovative – it's the approach taken by Clinton's 1993 Empowerment Zones, which I had a role in designing, but was not a notable success. Alec McGillis in the Washington Post had a good comparison of the two approaches:
There are downsides to both approaches, experts say. A federal experiment called Moving to Opportunity found that families given vouchers to move out of inner-city public housing reported improved health but few gains in earnings, educational outcomes and the well-being of teenage boys. Those studying the results say many families did not move far enough, possibly because of a lack of affordable housing in better areas.
At the same time, many attempts to lift blighted areas have been unsuccessful, which is one reason Edwards has argued for a more radical approach. There are few examples of skill-development initiatives, beyond the Harlem one, that have succeeded on the scale Obama proposes. He would increase funding for the Community Development Block Grant program, but billions spent on jobs and housing through the grants over the years have failed to turn around many areas.
Calling one of these approaches “innovative” and the other not is just a thumb on the scale. After twenty years in which Comprehensive Community Initiatives have been in fashion, with some incredible successes where there is a genius like Geoff Canada of the HCZ and mostly expensive failures, it is actually refreshing to see a return to a focus on economics and on economic integration. It is, as the Post says, “a more radical approach.” (The best summary of recent thinking about poverty, work, time and money is Dalton Conley's recent article, “The Geography of Poverty.”) I thought the CAP report was actually a very well-balanced blend of the approaches, reflecting current studies, with a fair amount of focus on education, asset-building, connecting people to jobs, etc. I thought its willingness to call for a big commitment on poverty, with a specific societal goal, and being unafraid to talk about poverty rather than couch it in middle-class universalism, was politically daring and correct. Whereas I thought the CAP tax plan of a couple years ago, which had plenty of good things in it like a partial cut in the payroll tax (although it was oversold, as there's no meaningful distinction between the employee's share and the employer's) was too cautious in its avoidance of the fact that we will need significantly greater revenues to meet even current obligations, much less finance the big ideas such as universal health care.
Matt's final point, which is that there is more innovation in the conservative world than I gave them credit for, is persuasive.
Somebody has to say it in this discussion. I run a school for Apprentice Carpenters, Cabinet-Makers and Floor-Coverers.
Along with those items discussed is the more urgent need of "work ethics" training. What we see is a lack of initiative and ambition. This can come from a community or a home. To educate for a job and have a job service and help people move to an area that has jobs is a wonderful undertaking, but it is completely lost if people don't work. I am a liberal, but probably sound conservative on this. The lack of work ethic is exhibited in both liberals and conservatives equally. Actually, the lack of work ethic seems to translate directly into a lack of political knowledge also. Lazy intellectually as well as physically. I never thought I would be one of those old guys that said "These kids nowadays", but it is unfortunate and true.
Combine all these things and we have a strategy for sucess. It is also an area that liberals and conservatives could agree. We'll educate you and help, but you have to do your part.
Now, let's bring jobs back to America with an educated, motivated work-force.
September 27, 2007 1:21 PM | Reply | Permalink
One of the reasons there is more innovation in the conservative world than there is on our side is because their ideas don't have to work!
The conservatives just fantasize and find things that they can market. We've seen these past seven years that their "innovations" are nothing but pure bullshit well-packaged and sold to the gullible. It makes no difference at all to the conservatives if their ideas actually work. Even now, with all the failures they have brought about they simply scratch their heads and say the problem was we weren't conservative enough, etc...
September 27, 2007 1:44 PM | Reply | Permalink
Issues like poverty are incredibly complex, and no one has "the answer" because there isn't one answer. Certainly providing jobs is essential, but as Rik Wenger said, people have to be willing to work at the job. They also have to believe that hard work will be rewarded. It is a combination of upbringing (especially an emphasis on accountability and discipline) and positive experiences. It is very unfashionable (to say nothing of politically incorrect) to say it, but it does require developing the old "middle class" attitudes of hard work. responsibility and thrift that are missing from mcuh of the middle class these days as well as lower classes.
And it also requires that hard work be rewarded. In a Wal-mart world, that isn't always the case. Connections and starting out wealthy seem to be the main criteria for success these days.
In short, it is a combination of better skills and attitudes on the part of the poor, but employers also have to provide more opportunity and more equitable pay scales, and government has to provide more equitable taxation.
September 27, 2007 1:59 PM | Reply | Permalink
Actually, failing is good for most of their ideas b/c it proves that gov't doesn't work.
Many of their ideas are just wolves in sheep's clothing, designed to kill things rather than make them better, like social security privitization. Others are just designed to prevent real change from happening, like basically any conservative proposals on the environment. Same reason they put all of the foxes in charge of the henhouses.
September 27, 2007 4:07 PM | Reply | Permalink
What do you think of Jon Chait's new book and the idea that the GOP has been selling snake oil in the guise of the idea of the Laffer curve and supply-side economics? If they are selling popular but fraudulent ideas, how does that impact what their opposition can and should do?
Also, how much do you credit things like the Southern Strategy and race-based appeals to conservatives to their success in being able to implement far less popular (or at least less well understood) ideas? It seems a plausible alternative to the unified theory of conservative victory through superior ideas for 21st C. governance. Or the power of talk radio and an alternative media apparatus for that matter.
Also, what about the polls that show that many, many Americans believe things that the GOP says that simply aren't true? There are many, many examples in every topic, from taxes (who benefited from the Bush tax cuts, who will face the estate tax), to foreign policy (Saddam attacked us on 9/11, we found WMD), to the details of basically every possible domestic policy.
September 27, 2007 4:08 PM | Reply | Permalink
I never understand why it has become politically correct to essentially label the poor as lazy - even in the Democratic Party - most especially among the centrists (though they say it with nuance, of course) and still not possible to tell another big part of the story.
The poor are often just simply clueless. We live in a very complex technological society which requires advanced education and training in order for most to earn a middle class lifestyle. Many people who are poor are just plain not very bright, through no fault of their own. Add to these the people who are marginally physically able to work and those who are marginally mentally stable enough to hold down a job. Figure that none of these groups is going to have an easy time finding another job if they lose a job (as they will in a 21st century economy that offers no one lifetime employment).
There is always going to be a certain percentage of people who will not be able to succeed in a "survival of the fittest" environment and in a nation of 300M people, they count up darn fast.
September 27, 2007 4:13 PM | Reply | Permalink
Mark,
Matt Bai's comments on Social Security are interesting because they illustrate that even someone who "gets" what the progressive movement is building is locked in to the "high brodersist" view of "how to fix Social Security" and that movement in any direction is better than actual progress.
Opposition - Just saying no- is an actual policy postion, and a thoughtful one. Would that the Democratic leadership in congress adopt that idea now, I believe they would have higher approval ratings
September 27, 2007 6:05 PM | Reply | Permalink
Many people who are poor are just plain not very bright
I'm surprised by this, 'cause it sounds right out of The Bell Curve, which doesn't seem like your kinda thing...
September 27, 2007 7:53 PM | Reply | Permalink
Well yes it would. The strength of Social Security is that it is insulated from the wealthy, isolated from the power of Capital, not just another line item in the budget to be slashed because "we just CAN'T not afford" some weapons program or other.
Social Security is worker paid insurance that benefits workers. It owes nothing to Capital because it takes nothing from Capital. The minor amount of progressivity doesn't offset the fact that retirees largely get out in proportion to what they paid in. Any attempt to means test Social Security or raise the gap moves the program from Insurance to Welfare. That would be a profound mistake.
Social Security performs the task it was designed to, that is provide a minimum amount of dignity for those who worked all their lives, it has withstood the 72 years of attack since enactment in 1935 for all the reasons that Matt Bai derides, to paraphrase America's second greatest President it is "of the Worker, by the Worker, and for the Worker".
People who have actually examined the financials of Social Security understand that they are quite sound, certainly more sound than the rest of the Federal Government. In 1983 Social Security went over the brink of bankruptcy and had to undergo some fancy borrowing between the OASI, DI, and HI Trust Funds to keep from default, after the Reagan-Monihan reform it had rebuilt it self to Short Term Actuarial Balance by 1993 (by law one year of reserves) and since then has been a net lender to the General Fund in amounts that have ramped up from $58 billion in 1994 to $189 billion in 2006. Under standard projections (Intermediate Cost) Social Security will remain a net lender to the General Fund until 2017 and will remain a creditor until 2041. Under less pessimistic (and more realistic) assumptions Social Security will be a net lender for years or perhaps decades to come and may always remain a creditor.
Table VI.F8.-Operations of the Combined OASI and DI Trust Funds, in Current Dollars, Calendar Years 2007-85
Is Social Security 'progressive'? Well no and it is not in workers' real interests to make it so. If you want progressive with a big 'P' raise top marginal rates and give those workers' kids health care, and rebuild the bridges that get them to work. Social Security is not broke and the only people who say it is are people who want to destroy it or people that really don't know anything about it.
Social Security is working fine and except for some scary moments in the early 1980's always has. There are plenty of aspects of America that are just screaming out for more Social Justice, can we just leave the one piece that is working as designed alone?
September 28, 2007 5:03 AM | Reply | Permalink
Please explain to Tim Russert, who embarrassed himself yet again on this topic at the Democratic debate. Chris Matthews, too. You should also post again in a new thread to make sure Matt Bai sees it. I always wonder what the response is.
That said, even if reforms someday prove necessary, I don't think a few small changes along the lines of the ones suggested will seriously put Social Security's future in jeopardy.
September 28, 2007 8:34 AM | Reply | Permalink
Funny, I didn't think of "The Bell Curve" reading that. What the comment made me think about is how some working class people say they hate liberal social worker types because they think and act like they are superior to them.
September 28, 2007 5:58 PM | Reply | Permalink