As a Wall Street Analyst I always thought that the real reason for privatizing social security was transfering wealth to us wealthier (relatively) folks in the financial business through fees charged on private accounts for managing money and making stock transactions. While I still think this is a major driver, this editorial in the
Brattleboro Reformer made me realize that I'd REALLY missed the larger effect of Social Security privatization. To wit:
Here's where it really gets diabolical. If privatization becomes a reality, every issue from that point on can be framed as a potential threat to people's retirement funds. Environmental laws. Labor laws. Corporate taxes. Liability laws. The whole regulatory framework of modern corporate America will suddenly be transformed into a drag on stock earnings and a direct attack on the retirement funds of millions of Americans.
The full editorial is below the fold...
The real agenda
Running beneath the Bush administration's talk of creating an "Ownership Society" is something they won't come right out and say openly: They are crafting a long-term strategy to render the Democratic Party impotent for decades to come.
It's no secret that virtually every act of the Bush White House is done with political considerations in mind, usually camouflaged with Orwellian language.
"Tort reform" is a code phrase for defunding the trial lawyers, one of the Democratic Party's biggest financial backers.
The No Child Left Behind Act and support for school vouchers for private schools are designed to destroy public education and the teacher unions that reliably back Democrats.
Expanding the North American Free Trade Agreement to the entire Western Hemisphere is not just about free trade, but destroying labor unions, another reliably Democratic group.
Packing the federal courts with conservatives ensures that the most odious elements of the Bush agenda will be upheld.
Permanent warfare in pursuit of empire ensures that dissent will be equated with treason and will keep people too scared to speak up.
But initiatives such as these are just the warm-up act compared to the crown jewel of their "stick it to the Democrats" strategy -- privatization (a word now banned by the Bush administration) of Social Security.
By diverting part of the money we currently pay in Social Security taxes into the stock market, Americans will become part of what conservative strategist Grover Norquist calls "the investor class."
Here's where it really gets diabolical. If privatization becomes a reality, every issue from that point on can be framed as a potential threat to people's retirement funds. Environmental laws. Labor laws. Corporate taxes. Liability laws. The whole regulatory framework of modern corporate America will suddenly be transformed into a drag on stock earnings and a direct attack on the retirement funds of millions of Americans.
It's not much of a leap from there to call the entire idea of the maintenance of the welfare state into question. The next step of the grand Bush strategy is to remove taxes on investment income and put the federal tax burden squarely on the shoulders of wage earners. When this happens, the cries to cut government spending will get louder and the legitimacy of government will get attacked further.
This feeds into the master narrative of conservatism that we've heard for decades -- if we can eliminate all the constraints on capitalism, society will flourish. Every major social program enacted since Franklin D. Roosevelt's New Deal -- most especially, Social Security -- is held up as examples of government interference in the natural order of economics.
We know what the natural order of economics looks like and what the end result looks like. The stock market crash of 1929, and the Great Depression that followed it, was the unhappy ending to a decade of wild speculation fueled by laissez-faire economics. It took Roosevelt's New Deal to save capitalism from itself.
Bush's "Ownership Society" is nothing more than the same old "us against them" vision of the world where they who have, get. It's a vision where taxes aren't viewed as the membership dues we pay for a civilized society, but instead are seen as theft. It's a vision that rejects the democratic ideal of mutual support and collective responsibility. It's a vision that rejects the idea that government exists to promote the general welfare, and not to merely help the rich grow richer.
Social contracts? Safety nets? Collective responsibility? To the Bush administration, these are concepts they view as being as quaint and obsolete as the Geneva Convention. There is little doubt who will be able to join Bush's Ownership Society and who will be on the outside looking in.
This is a trojan horse. It MUSt be stopped at all costs and I take very seriously other comments that point out that the current proposal is just a faint and to make a compromise position seem reasonable. I should point out for the interests of full disclosure that I work in an area of market analysis known as SRI (Socially Responsible Investing), and I confront the reasoning that the Reformer talks about everywhere in my daily life. This is a real threat. Any changes in the Social Security system that allow corporate interests (that includes the Republican party of course, and let's not forget, significant portions of the Democratic party too) to frame progressive agenda's as attacks on social security retirement, will be very effective and hard to argue against. This is especially true given the fact that news media does not cover such issues honestly. For example, how many readers here know that 1 in 6 fetuses in the U.S. is exposed to dangerous levels of mercury as a direct result of coal-burining utilities? Now image trying to address this concern when every conservative is screaming to the rafters about how environmental regs are going to harm stock market gains and therefore hurt seniors retirement funds? They've already done this with jobs, despite tons of evidence that environmental regs haven't hurt jobs, but the other way around. At any rate, even a slight change can re-arrange the dynamics so that progressive, liberal policies will be framed as "touching the third rail" of politics - harming social security.