Third Rail Blues

Everyone has been so fixated on what will happen in the streets during this week's Theoligarchy Fest! at Madison Square Garden that there's been little focus on what might be said within the hall. I've personally found it hard to believe that the Republicans would abandon the politics of smear and spectacle, at which they're so skilled, to actually offer any policy substance during their Week of Wank--but this wire story suggests that Bush is likely to discuss Social Security privatization during his speech on Thursday.

I always have trouble believing that Bush can hold his own in any policy conversation weightier than the merits of Roger Clemens vs. Nolan Ryan, but if he's really prepared to talk about this in any greater depth than "Uhmerkins shud git th'chance t'hav munny win ther uld," I'd give him credit for doing so.

Easy to say, of course, because I don't think there's any chance he gets into it any deeper than the cheerleading level. (Gotta go with what you know, right?) He certainly won't take on the many and severe problems with the plan. Privatizing Social Security makes sense as long as, one, you're willing to distort the stock market by infusing massive public monies into it and two, you don't mind blowing up two cornerstones of the 70 year-old program: that each generation's payments aren't invested toward their own eventual retirement but rather go to support those currently retired, and that your eventual benefits from the program are based solely upon your earnings during years of work. Switching the first premise so that current workers would divert some portion of their current SS payments into personal accounts would put the screws to current beneficiaries and force government to raise a great deal of money to maintain their current benefit levels; the second would give great advantage to those Americans who better understand the stock market, and/or have the time and money to retain such expertise. Guess who benefits from that switcheroo? Yep, the same folks who always seem to win under Bush's economic policies. Funny, that.

Finally, the creation of new accounts would do for the investment community what the perpetuation of employer-provided health care has done for the insurance industry: create untold billions in new business. Those firms are all generous donors to Bush and his ilk, proving again that the best investment of all in today's America is a six-figure campaign contribution to Republican Jihad.

This Mother Jones brief offers a great quick rundown on the potential disaster of privatizing Social Security.

What I find really interesting, though, is that this move would seem to represent more of a political risk than Karl Rove usually likes to take on in his generally negative and substance-free electioneering. Social Security was once widely described as the "third rail of American Politics": any candidate who touched it was considered likely to die, politically speaking. Now, Bush played with the idea of privatization in 2000, as Bill Clinton actually had before him, and the blue-ribbon panel he commissioned to study the question came up with a number of privatization plans. None of this seemed to hurt him, certainly not to the extent that Ronald Reagan was once bludgeoned by the Democrats over his perceived attack on Social Security in the 1982 midterm elections. But by 2002, with financial scandals flooding the news and the stock market way down from its dot-com heyday, Republicans were running away from the scheme; the third rail apparently had been reactivated.

Now the market is back up, the CEOs seem to be behaving themselves, and nobody in my generation thinks Social Security will be around by the time we retire anyway. I'm sure the Republicans have polled the crap out of this question, else they wouldn't raise it... and besides, the dismal Bush record doesn't give them a ton of great options in terms of what to talk about. But the politics of Social Security remain dynamic, and the Democrats have a long track record of effectively "scaring" voters on the question. It's not honest, and it happens to be bad policy--as Greenspan (himself a villain of long standing in the Social Security wars) noted yesterday, we do have to take this issue on. That will eventually mean, in all likelihood, a higher retirement age and some reduction in benefit payout. But in this case, I'm willing to accept sketchy means to the absolutely crucial end of getting Bush on that bus to Crawford, Texas.