Wednesday, October 19, 2016

Pre-Debate misellany

The Peter Peterson Foundation mainly exists to lobby for privatizing the Mississippi River of cash flows, aka, Social Security. They have Seven Questions on Debt for the Final Presidential Debate 10/17/2016. The first one starts out like this: Our debt is already at historically high levels, and the nonpartisan Congressional Budget Office projects that it will soar to 141 percent of GDP in 30 years ..." Even leaving aside the quality of the particular analysis cited, this is meaningless. Countries issuing debt in their own currency are not going to go bankrupt. The debt hype from the Peterson Foundation is all about saying, spending is too high! We're turning into Greece! We have to cut Social Security benefits now now NOW!! It's reactionary nonsense.

David Sirota and Avi Asher-Schapiro report on a corporate Democrat's scheme to start the privatization of Social Security in Hillary Clinton And Wall Street: Financial Industry May Control Retirement Savings In A Clinton Administration International Business Times 10/19/16. It's a longish article. But what it comes down to is major Clinton donor Tony James, who is president of the Blackstone Group, wants to raise the payroll tax. But not to increase benefits on Social Security or Medicare. Instead, he wants to see it put into what he's selling as a 401(k) type plan that would be run as a national program, unlike individual 401(k) plans in which the employee can select the investments. And the idea is to loosen the rules on such investments to that hedge funds and investments bankers can collect fees from selling risky investments of the kind pension funds are starting to reduce their presence in their portfolios:

The James-Ghilarducci plan in fact offers substantial potential benefits for companies like Blackstone. It would provide Wall Street with a new, government-guaranteed revenue stream, and would also help the industry circumvent legal and market obstacles to reach a wider swath of the retirement savings business.

Alternative investment firms have tried to break into the $4 trillion 401(k) market for years, but their products, such as real estate and long-term private equity investments, are less easily transferable to cash, making them a difficult fit for 401(k)s. On top of that, 401(k)s are regulated by federal rules that discourage illiquid, high-risk investments — and make 401(k) overseers vulnerable to lawsuits if they move workers money into such investments. A new federal rule could further complicate alternative investment firms’ efforts to access the retail market because it “suggests that there are certain investments that are so costly, complex, or opaque that they cannot be recommended to retirement investors,” said Barbara Roper of the Consumer Federation of America.

The James-Ghilarducci plan would effectively circumvent many of those obstacles, allowing alternative investment firms to access billions of retail customer dollars that have been out of reach. ...

Some major institutional investors appear to be responding to the warnings. Just this month, officials at the California State Teachers Retirement System — one of the largest pensions in the world — announced that high fees had convinced them to follow other major pension systems and pull $20 billion out of its investments with private money managers. [internal links omitted]
As long as there are investment banks and hedge funds, they will always be coming up with new schemes to plunder Social Security.

Dave Levinthal and Michael Beckel point to a questionable practice by some journalists in Journalists shower Hillary Clinton with campaign cash Center for Public Integrity 10/17/2016.

Javier Solana and Strobe Talbot provide a sadly conventional defense of neoliberal globalism in The Decline of the West, and How to Stop It New York Times 10/19/2016.

So does Thomas Friedman, aka, Little Tommy Friedman Age 6, in WikiHillary for President New York Times 10/19/2016. Charlie Pierce skewers him for it memorably in No, Hillary Clinton Should Not Go Business Class When She Gets into Office Esquire Politics Blog 10/19/2016.

Little Tommy says this:

Do we need to make adjustments so the minority of the U.S. population that is hurt by freer trade and movements of labor is compensated and better protected? You bet we do. That’s called fixing a problem — not throwing out a whole system that we know from a long historical record contributes on balance to economic growth, competitiveness and more open societies.
Pierce's retort to that: "Well, that's mighty oligarchical of you, son. In the long run…etc." The latter being a reference to John Maynard Keynes' famous saying, "In the long run we are all dead." Keynes was referring to economists who couldn't come up with meaningful policy proposals to counter recessions and depressions but instead just reassured everyone that everything will get better eventually.

Solana and Talbot offer their own version of this stale bromide:

These handicaps make it even more important for Western governments to address their citizens’ legitimate concerns about the impact of globalization. They must work to cement a new political consensus that will restore public support for free and fair international trade. ... There will have to be remedial action at home. Vulnerable workers in developed nations deserve better safety nets, as well as ambitious and effective retraining opportunities in growing sectors of economy.
And the same people who have been promoting this line of thought for decades are generally also lend a sympathetic ear to the Pete Petersons of the world who want to abolish the existing public social safety net by changing it into a privatized version on which billionaires can make more billions.

This kind of bland promise reminds me of a saying that was used in Argentine politics during the neoliberal governments of Carlos Menem: the promise harsh winters that always come, to be followed by beautiful springs that never arrive.

And, oh yeah, there's an Iraqi offensive under way to retake Mosul from the Islamic State:

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