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:

• Daniel Davis, Why the Battle for Mosul Could Become a Total Disaster National Interest 10/18/2016
• Semih Idiz, Turkey hasn't given up on role in Mosul battle Al-Monitor 10/18/2016
• Fred Kaplan, ISIS Will Lose in Mosul. But Who Actually Wins? Slate 10/17/2016
• Juan Cole, 7 Things to Know about Mosul Informed Comment 10/17/2016

The anti-Social Security summit

Or rather, that's what the anti-Social-Security jihadists wanted it to be. So the title is too harsh a label for what actually went on at the "summit" Monday. The Obama White House has been playing this down. And they certainly aren't giving any clear indications that cutting Social Security is something they intend to try. Still, it's disturbing that they set up an event that gives anti-Social-Security dogmatists a way to boost their credibility and respectability.

It's a good sign that FOX News is complaining about the number of what it sees as labor and other liberal groups invited to the Fiscal Responsibility Summit (Special Interests Dominate Fiscal Responsibility Summit 02/23/09).

C-Span has recordings of the actual Fiscal Responsibility Summit available. I'll reiterate again some of the main points of orientation I apply to looking at events and proposals along those lines.

Protecting Social Security from benefit cuts or increases in the retirement age is the key thing Obama and all the Democratis should make their first priority in this "fiscal responsibility" discussion.

Health care costs are the key long-term problem for Medicare and Medicaid (not for Social Security). That problem has to be addressed by developing a workable universal health insurance coverage.

A key part of the anti-Social-Security plan from Peterson and his allies is to have "nonpartisan" or "bipartisan" commissions come up with recommendations to roll back the Social Security program that are then submitted to Congress to vote on an up-or-down basis with no amendments allowed. This is undemocratic, which is precisely why they propose it. Any attempt to roll back Social Security needs a full and open debate in Congress so that such an attempt can be stopped dead in its tracks.

Obama's presentations are particularly important parts of the summit record. His opening and closing remarks are available on the White House Web site: Remarks by the President and the Vice President at Opening of Fiscal Responsibility Summit, 2-23-09 and Remarks by the President in question and answer session at the closing of the Fiscal Responsibility Summit.

I'm not fond of the deficit-hawk rhetoric. But that's been standard Democratic economics for way too long. The Democrats need to get over that now. But that part was no surprise. And Obama's commitment to forgoing some of the budget tricks that Cheney and Bush used is welcome.

More concretely, Obama committed to supporting "pay-go" rules like those in the 1990s:

And we will reinstate the pay-as-you-go rule that we followed during the 1990s -- the rule that helped us start this new century with a $236 billion surplus. In recent years, we've strayed from this rule -- and the results speak for themselves. The pay-go approach is based on a very simple concept: You don't spend what you don't have. So if we want to spend, we'll need to find somewhere else to cut. This is the rule that families across this country follow every single day -- and there's no reason why their government shouldn't do the same.

This is bad economics and bad politics. Fortunately, he didn't try to take that approach in the Recovery Act. "You don't spend what you don't have" is one of those favorite truisms that the Beltway Village loves. But the economy doesn't work on that principle, and neither do the family budgets, another stock comparison that doesn't serve the Democrats well to keep encouraging. When individuals and business use credit, the do borrow money they don't have. Loans are also a way of getting "money that you don't have".

And in a severe recession like this one, what we need is for the government to run deficits to stimulate the economy, i.e., to "spend what you don't have" by borrowing from China and other lenders. The Secretary of State was in China trying to ensure that relations stay good enough that we can keep that borrowing relationship with them going.

He did make a point of saying that health care is "the single most pressing fiscal challenge we face by far, to the long-term solvency of Social Security". I'm willing to assume he's trying to focus on health care as the real "entitlements" problem. But what he says there doesn't make any sense. Or rather, it's plainly not the case. The rising cost of health care affects Medicare and Medicaid, and not Social Security. Blurring those disctinctions only helps the anti-Social-Security crusaders.

He should also not encourage dishonest talk about Social Security "solvency". The program is set up so that if a point is reached where current benefits can't be funded from available Social Security funds, then benefits have to be cut to keep them within balance. In any case, the Social Security Trust Fund is currently running a large surplus to finance the baby boomer retirement demands in the coming decades. Talking about threats to the "solvency" of Social Security also plays into the game of the anti-New-Deal Neanderthals.

The most important thing missing from Obama's presentations was a straight-forward defense of Social Security. And that's a big part of what he was elected for. It's his job and that of the rest of the Democrats to defend Social Security against billionaire plutocrats and the Rush Limbaugh cheering squad. And I'm not seeing that in Obama's presentations from Monday. Instead, there was this Mugwump statement from the public session at the end:

There was a healthy debate on Social Security, but also a healthy consensus among some participants, including Congressmen Boehner and Hoyer as well as Senator Graham and Senator Durbin, that this was a moment to work in a bipartisan way to make progress on ensuring Americans' retirement security. And I think one of the things we want to do is to figure out how do we capture that momentum.

With Pete Peterson's well-funded drive to wreck Social Security going on, and with Peterson's wreckers even being invited to the Fiscal Responsibility Summit instead of being shunned like the bubonic plague, vagely platitudes about working "in a bipartisan way to make progress on ensuring Americans' retirement security" just doesn't cut it. Working in a bipartisan way on Social Security means slashing benefits. And that would be the worst kind of betrayal of the Democratic base if Obama gets drawn into something like that.

On the other hand, vague bipartisan platitudes are just that. And it's very possible that he was trying to put the best face on an ill-conceived feel-good meeting. He certainly stressed that controlling health care costs was his priority: "Over the longer run, putting America on a sustainable fiscal course will require addressing health care." And that means expanding health care coverage, not hacking up Medicare and Medicaid, and certainly not touching Social Security.

The White House transcript includes the statements by participants on whom Obama called. Obama recognized that bold Maverick McCain to talk about cutting Pentagon waste - something with which McCain has actually done some constructive things. But the major savings in defense would come from substantive changes in foreign policy that reduces our plans for intervening in all kinds of conflicts all over the world. And one that recognizes the limits of American power. (Two heavily overlapping considerations.)

The best thing in either transcript about Social Security is from Heidi Hartmann, President of the Institute for Women's Policy Research, who said the Social Security panel had a consensus there should be increases in benefits, at least for some of the lower-income recipients.

William Novelli, CEO of the AARP, focused on how controlling health care costs as the key issue. Obama has a White House Health Care Summit scheduled for next week.

John Castellani, President of the Business Roundtable, talked nicely but vaguely about the need for health care reform.

Andy Stern, President of the Service Employees Internation Union (SEIU) said nice things about Castellani and Novelli.

I heard a couple of Republican Members of Congress pitching for "bipartisanship" while complaining about Obama's alleged failure to promote it enough on the Recovery Program.

Obama responded to one of those complaints, "On the one hand, the majority has to be inclusive. On the other hand, the minority has to be constructive."

For me, that was his best moment of the day!

David Walker, head of billionaire Social Security opponent billionaire Peter Peterson's foundation dedicated to abolishing the New Deal, was also there, sad to say. Obama asked him to make a comment - Andy Stern was the one he called on next - and here was Walker's response:

You touched in your remarks on our balance sheet. As a former comptroller general of the United States I can tell you we're $11 trillion in the hole on the balance sheet. And the problem is not the balance sheet, it's off the balance sheet -- $45 trillion in unfunded obligations.

You mentioned in January about the need to achieve a grand bargain involving budget process, Social Security, taxes, health care reform. You are 110 percent right. We need to do that. The question is, how do we do it? Candidly, I think it's going to take some type of an extraordinary process that engages the American people, that provides for fast-track consideration. And with your leadership, that can happen. But that's what it's going to take, Mr. President.

The Peterson group are clean-shaven reactionaries, not the Republican hate-radio bloviator types. But they're putting big bucks into trying to destroy Social Security. Special processes, in the Peterson respectable Neanderthal vocabulary, is a euphemism for those "bipartisan" commissions making up-or-down recommendations to Congress. (Apologies to our long-extent cousins the Neanderthals for associating them with the anti-Social-Security jihadists.)

That highbrow bum Walker also said on CNBN that "extraordinary processes" were needed to get the bipartisan agreements required to "reform" Social Security, Medicare and Medicaid. He also said we need to reform Social Security and make it "more savings-oriented". And also, "The last thing you want to do is expand entitlements."

Actually, Mr. Anti-New-Deal Reactionary, incresing Social Security benefits and expanding the kind of medical coverage available through Medicare and Medicaid are probably the most important economic moves we need to make.

Cokie Roberts on NPR managed in commenting on the summit managed to reproduce the crackpot notion that Social Security is in financial trouble in this NPR broadcast.

I know that the politics stemming from the Republicans' newly-rediscovered arguments about the horrors of budget deficits - if you believe they're serious about that I need to tell you about an opportunity to help the son of an African dictator smuggle money - and the Blue Dog Democrats concern about the same. The Blue Dogs position, sadly, is probably more seriously held than by the Republicans.

Still, the Democrats need to push hard to dissipate this conservative fixation on the virtues of balancing the budget. How widespread this toxic notion has become is illustrates by this discussion on the PBS Newshour, where even the two pro-Obama participants are insisting on the virtues of budget-balancing: Obama's Vow to Halve Deficit Puts Focus on Budget Plan 02/23/09.

If Jamie Galbraith is right - and he usually is about these things - this deficit-hawk nonsense is spectacularly misguided.

Tags: obama administration, peter peterson, social security

Today's "fiscal responsibility" summit

Billionaire Peter Peterson: on jihad to slash Social Security

The so-called fiscal responsibility summit which Obama is scheduled to attend today has shaped up to be something of a mystery. It seems they scheduled the thing months ago, thinking that the major anti-recession measures would have been enacted and they could turn to focusing on budget balancing, still not having let go of the balanced-budget dogma to which most Republicans kissed goodbye about three decades ago.

Joe Conason warns the Obama team to basically treat the proposals and schemes of the anti-Social-Security zealot and billionaire McCain supporter Peter Peterson with the care one should reserve for handling pit vipers (Reform healthcare -- and leave Social Security alone Salon 02/23/09):

So when the White House raises the issue of "entitlement programs" or "entitlement reform" -- without differentiating between Medicare/Medicaid and Social Security -- that reinforces the message of the center-right coalition that now sees an opportunity to cut Social Security benefits and undermine public confidence in the program. That coalition includes several outfits, such as the Heritage Foundation and the Democratic Leadership Council, whose analysts once pushed privatization (although they are unlikely to mention any such forlorn enthusiasm now). Joining them are the Concord Coalition and other fronts funded by billionaire and former Nixon Commerce Secretary Pete Peterson, who has vowed to spend most of his fortune to promote his vision of fiscal rectitude.

Peterson's vision is by no means identical with Obama's -- at least not if the president meant what he's said on several occasions about Social Security and Medicare -- most recently at the Washington Post last month. What he told the paper's editorial board summarizes not only his approach to the nation's broad fiscal issues but also the deeper purpose behind the White House summit. "Social Security, we can solve," he said. "The big problem is Medicare, which is unsustainable [in its current form]." He added: "We can't solve Medicare in isolation from the broader problems of the healthcare system."

In other words, neither the summit nor any other serious discussion of fiscal problems can be confined to entitlement programs -- because the underlying issue is healthcare costs. So the real agenda of the fiscal responsibility summit, as White House sources have explained on background, is to introduce healthcare reform. This is the same holistic and progressive outlook that informed the stimulus program, which includes spending on information technology that will help make universal coverage affordable and successful. [my emphasis]

That "entitlement reform" phrase is one the Democratic office-holders should retire from their vocabularies. It's become a scam slogan for cutting Social Security.

Joe hits on one of most key points to keep in mind about the "entitlement reform" scam: health care costs are the main fiscal problem facing both Medicare and Medicaid. We have to get a better handle on health care costs, and universal health-insurance coverage is a vital part of that.

Dean Baker also has a good brief piece on the issue, Stop Baby Boomer Bashing: Protect Social Security and Medicare Truthout.org 02/16/09. The anti-Social-Security crowd is currently using "generational equity" as a slogan. But, Baker points out, "the agenda of Peter Peterson and his ilk never had anything to do with generational equity. The point was always to gut Social Security and Medicare." (my emphasis)

I have reservations about a couple of points in both articles. I think Baker is overstating the extent to which the current economic crisis will cause a shift of relative wealth from older people to younger. But his basic point is very solid. The biggest losses of wealth in this recession so far have mainly been incurred by retired people or those nearing retirement. Which makes the idea of cutting Social Security even crazier than it was in 2005.

Joe Conason also gives an optimistic take on the "Diamond-Orszag" plan for long-term Social Security finances, though he does explain why he takes that view. For a less generous view, see Social Security: The Diamond-Orszag Plan is Not the Liberal Alternative by Ian Welsh, FireDogLake 02/2009.

Joe also thinks that the administration had intended to use the "fiscal responsibility" summit as a way to build support for his plan for expanded health insurance. And that sounds plausible up to a point. But why the administration should do anything that would give added publicity, credibility or respectability to that reactionary Peter Peterson and his anti-Social-Security jihad isn't at all clear to me. Maybe it was part of the bipartisan outreach that Congressional Republicans have not made clear was hopeless from the start. We'll see how Obama and other administration representatives approach their presentations today.

Tags: obama administration, peter peterson, social security

The continuing conservative jihad against Social Security

What do you mean by "retire", dude? You don't look like a Bush or a Vanderbilt to me!

A "fiscal responsibility" summit featuring President Obama, Vice President Biden and billionaire anti-Social-Security ideologue Peter Peterson is scheduled for next Monday, Feb. 23.

The idea behind the summit scam was to ram Social Security cuts down the throats of the public. Or, as the headline on a Firedoglake post of 02/19/09 by Jane Hamsher puts it, Hedge Fund Billionaire Pete Peterson Key Speaker At Obama "Fiscal Responsibility Summit," Will Tell Us All Why Little Old Ladies Must Eat Cat Food.

For whatever reason, the Obama administration decided to cooperate with what was effectively a well-planned stealth attack on Social Security benefits.

Republicans - and Blue Dog Democrats - are well-practiced at blowing smoke in our eyes on these issue. On Social Security, the basic issue is one and only one thing: Republicans want to cut benefits and that's a bad, bad, bad thing. Democrats, working people, heck, anyone who's not a trust-fund baby or Ayn Rand ideologue has very good reasons to oppose it.

As Jane explains in that post, the anti-Social-Security jihadists had planned to use a favorite conservative device to give reactionary proposal a veneer of "moderation" and insulate their implementation from the democratic process. The idea was to have commissions who would come up with proposals to slash social programs and then have Congress do an up-or-down vote on them with no amendments. For all Harry Reid's problems as Majority Leader, though, he had enough moxie to join together with Nancy Pelosi to tell the President to forget, there weren't going to be any up-or-down votes on some rightwing proposal to slash Social Security.

On the Social Security aspect of this fight, here are some of the main things I try to keep in mind:

The immediate issue is that Republicans want to cut Social Security benefits and that's a bad, bad, bad thing.

Any time someone lumps Social Security in with Medicare and Medicaid as part of an "entitlements crisis" or "entitlement funding problem" or the like, they're trying to scam us.

Social Security's finances are in excellent shape.

The Social Security Trust Fund has lent hundreds of billions to the US Government General Fund. The repayment obligation is backed by the full faith and credit of the United States Government. When the anti-Social-Security zealots says that the Social Security money "has already been spent", they are lying.

The real retirement crisis in the United States right now consists of two things: an inadequate health insurance system, and the radically reduced availability of adequate private pensions.

Obama and Biden were elected to defend Social Security against blithering reactionary billionaires like Pete Peterson.

If the Democratic Party can't defend Social Security effectively, is there a point in having such a Partyat all? If the public wanted Republican wreckers to get their policies passed for another four or eight years, they would have elected John McCain, Sarah Palin and Republicans majorities in the House and Senate.

The fact that our Pod Pundits think that cutting Social Security benefits and postponing retirement age is not only necessary but a fine example of nonpartisan virtue tells us basically nothing except how little most of the care about what people actually need in public services.

Tags: democratic party, peter peterson, republican party, social security