September 26, 2011

Saving Social Security

Social Security makes for an interesting case study in changing political times. At its creation, the idea was hailed by Democrats and reviled by Republicans. At its looming demise, Social Security is a political third rail for Republicans and a bargaining chip for Democrats. The one thing they all have in common in an endless fretting about what should be done to "save" Social Security. (And yes, it really is a Ponzi scheme of sorts, but then so is any form of insurance. Who do you think pays for that roof you lost to wind damage or that X-ray you just had?)

So what should we do about Social Security? It's obvious, really: means-test benefits and increase the retirement age. No one is better at stating the obvious than one of my faves, John Mauldin. Here is a brief except from his latest columns in his newsletter, Thoughts from the Frontline:
I think Social Security should be means tested. We should recognize it for what it is, for what Krugman called it: a redistributionist scheme. And a good and necessary one from the perspective of civilized society. Means testing would go a long ways to "fixing" the problem. But it doesn't get us there.
We need to raise the retirement age, and by more than a few years. And this is where I get called a heartless (insert expletive)! "How could you want us to work until 70 or even later? How can we do that? Is that fair?"
Let's use as our model that icon of the left, the King of Compassion, President Franklin Delano Roosevelt (FDR). He created the Social Security Act in 1935. He put the retirement age at 65. From today's perspective, that seems about right, if not a little early. But what did it look like back then? I refer you to a report from the US Senate in 2006 on life expectancy in the US. Interesting reading, but for our purposes we will scroll down to page 26 and the detailed life-expectancy tables. (
In 1900, the average life expectancy was 47 years (shockingly, the life expectancy for black males was only 32). By 1930 it was 59, which, if they kept such records then, would have been what they were looking at when the designed Social Security. In 1935 it had risen to 61.
So FDR set the retirement age four years above the average life expectancy. So much for compassion. He (they) assumed you would work into what was for them advanced old age. ...
So when someone suggests that we move the retirement age to (gasp!) 70 in a few decades, I just smile and think back to what FDR would do. If Social Security had been set up to track life expectancy in 1935, when it was formed, then retirement would be set at 83 or 84 today! Not exactly the golden-years concept, is it?

September 23, 2011

Hillary for Vice-President

There is a lot of talk about a Grand Bargain between Democrats and Republicans along the lines of reforming Medicare and Social Security (i.e., lowering benefits) in return for reforming the tax system (i.e., raising taxes). Well, I have a different sort of Grand Bargain to propose, this one of the sort that Democrats can dispose of without any help from Republicans.

Sometime in the next few months, Joe Biden, who I really like and admire, announces that he will not seek a second term as vice-president. Hillary Clinton bows to popular demand and accepts the nomination for vice-president. Obama now is positioned to win re-election, the country feeling better knowing that Hillary is just a heart-beat away from the presidency. Biden can be Secretary of State if he still wants the job. Obama is free to step down if things don't get better in a hurry.

I know what you're thinking. Never going to happen. And you are probably right. That leaves us with a choice between the devil we know and the devil we don't, not exactly a formula for rebuilding confidence in America's future. And make no mistake about it; turning the economy around is more about confidence than policy. Making Hillary vice-president would do about as much as anything else to give Americans some sense that hope is alive.

September 20, 2011

It's A Clusterf*k!

I love this guy James Howard Kunstler and his blog, Clusterfuck Nation. The message in his posts is clear: we are coming to the end of a culture that runs on fossil fuels. But denial of this unpleasant reality by those who are heavily vested in the status quo of a petroleum-based economy is a powerful force. And we the people are more than happy to dodge and deny yet another piece of the bad news that seems to rain incessantly down upon us during these end of days.
This much can be stated categorically about the USA these days: the more distressed our economy gets, the more delusional thinking you will encounter. People want to assign the cause of their misery to this or that (socialism, abortion, Jews, the New World Order). People want to believe that their world is a safe place with bright prospects (climate change is a myth, we have a hundred years of shale oil).
There are those who would perpetuate the myth of a never-ending empire of oil that will preserve the society we see around us forever. They are determined to suck every last bit of fossil fuel out of the ground, no matter how expensive it is or how damaging it is to the environment. Enter shale oil.
oil that is trapped in "tight," low-permeability rock that has to undergo fracturing operations ("fracking") before you can drain it out. It costs a lot more to get oil this way than by sticking a pipe in the ground and running a pump-jack to get it out the old-fashioned way. There are more than a few dirty secrets about the shale oil plays, but the biggest one is that you have to throw a huge amount of capital and steel at it to keep it running as an ongoing enterprise, and that money - other people's money - will be in shockingly short supply in the years head.
Why do they do this? Partly out of fear, partly out of greed, partly out of good old-fashioned head-in-the-oil-sands thinking.
to gird the hopes and wishes of the political right-wing, who are hell-bent on keeping this country from entering a plausible future. Watch these ideas take flight and wonder that you live in such credulous nation.
As I have said many times before, this shit is coming at us faster than expected, the politicians are dragging their feet, and it is already too late to avoid serious consequences of the new three horsemen of the apocalypse: climate change, peak oil, and overpopulation. It's a clusterfuck. And we are all along for the ride.

September 18, 2011

The Future Is Now!

I'm too busy writing to think of anything clever to say, but this guy has plenty of clever and interesting things to say. Something to think about on an early autumn day.

September 10, 2011

Who Needs Al Qaeda?

On the eve of the 10th anniversary of 9/11, the nation again finds itself worried about a terrorist attack. My question is this. Why should al-Qaeda bother with staging attacks when we are doing such a good job of destroying ourselves?

Europe is on the verge of dissolving its political and monetary union, thanks to the Greek debt crisis. The United States is tearing itself apart with a dysfunctional political process fueled by ignorance and arrogance. Neither seems capable of doing what needs to be done, preferring instead to deploy half-measures and delaying tactics. They fiddle while everyone else burns.

Bin Laden must be laughing in his grave, not to mention Karl Marx, who quite correctly it would seem, predicted that capitalism would destroy itself. They certainly couldn't have come up with a doomsday scenario much better than what we are witnessing now.

Our culture, our economy, our political processes are all imploding largely due to self-inflicted wounds. It's a perfect plan, one that can't be stopped because we the people are our own worst enemy.

September 7, 2011

The Unkindest Cut

House Majority Leader Eric Cantor (R-Va.) last week suggested that any aid to victims of Tropical Storm Irene should be offset by budget cuts elsewhere in the federal budget in order to comply with Tea Party orthodoxy. He thereby confirms Ralph Waldo Emerson's maxim that a foolish consistency is the hobgoblin of small minds.

For many of Cantor's fellow Tea Party suck-ups this constitutes the first time the rubber really meets the road in terms of principle versus common sense. A lot of the freshmen Republican congressmen who fueled the "debt crisis" crisis are from districts heavily impacted by Irene. They have been hearing from constituents whose lives have been devastated through no fault of their own and who have grown up accustomed to the idea that in these situations the federal government will be there to provide disaster assistance.

This episode underscores the fundamental flaw in the whole balanced budget thinking that we discussed in an earlier post. State governments can have the luxury of a balanced budget because they know that when the shit hits the fan the federal government will borrow money to pay for the damages. If you restrict the federal government's capacity to borrow when urgent needs require it to do so, then you are faced with a very politically and morally unpleasant alternative, which is a lot of unnecessary suffering among the people you were elected to represent, whose interests you were chosen to defend.

In government as in life, you are only as good as your next crisis. A new crop of politicians is about to discover the potency of that particular maxim.

September 2, 2011

Hyprocrites and Thieves

Dante wrote The Inferno both as a meditation on crime and punishment and as a very precise pay-back to those who he felt had screwed people over big time. That guy over there buried upside down having his feet tickled with flames for all eternity ... we all know who he is, or at least they did back then. Adding to Dante's list of liars, knaves, and hypocrites in these troubled times is too easy. But a couple of candidates just jump off the front pages of today's news.

Julian Assange, founder of WikiLeaks, has decried the disclosure of unredacted State Department files as "reckless" and "negligent." Huh? Excuse me! Boy, talk about the pot calling the kettle black. His effrontery is matched on another front by the American banking industry. Facing massive fines for trashing the American housing industry and a good chunk of the economy, not to mention yours and my retirement savings, the bankers are saying that being forced to pay out billions of dollars in fines "could sap earnings for years and contribute to further losses across the financial services industry." My response to that is let the bankers themselves pay the fine on their way into jail where they should serve lengthy sentences for running a massive Ponzi/RICO scheme.

I am so sick of these people who act with such reckless indifference to consequences and then whine about it when it turns around to bite them in the ass. They should all—if you will pardon the phrase—rot in Hell.