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Obama: Played for a Sucker
Lately, Barack Obama has been saying that major action is needed to avert what he keeps calling a "crisis" in Social Security - most recently in an interview with The National Journal. Progressives who fought hard and successfully against the Bush administration's attempt to panic America into privatizing the New Deal's crown jewel are outraged, and rightly so.
But Mr. Obama's Social Security mistake was, in fact, exactly what you'd expect from a candidate who promises to transcend partisanship in an age when that's neither possible nor desirable.
To understand the nature of Mr. Obama's mistake, you need to know something about the special role of Social Security in American political discourse.
Inside the Beltway, doomsaying about Social Security - declaring that the program as we know it can't survive the onslaught of retiring baby boomers - is regarded as a sort of badge of seriousness, a way of showing how statesmanlike and tough-minded you are.
Consider, for example, this exchange about Social Security between Chris Matthews of MSNBC and Tim Russert of NBC, on a recent edition of Mr. Matthews's program "Hardball."
Mr. Russert: "Everyone knows Social Security, as it's constructed, is not going to be in the same place it's going to be for the next generation, Democrats, Republicans, liberals, conservatives."
Mr. Matthews: "It's a bad Ponzi scheme, at this point."
Mr. Russert: "Yes."
But the "everyone" who knows that Social Security is doomed doesn't include anyone who actually understands the numbers. In fact, the whole Beltway obsession with the fiscal burden of an aging population is misguided.
As Peter Orszag, the director of the Congressional Budget Office, put it in a recent article co-authored with senior analyst Philip Ellis: "The long-term fiscal condition of the United States has been largely misdiagnosed. Despite all the attention paid to demographic challenges, such as the coming retirement of the baby-boom generation, our country's financial health will in fact be determined primarily by the growth rate of per capita health care costs."
How has conventional wisdom gotten this so wrong? Well, in large part it's the result of decades of scare-mongering about Social Security's future from conservative ideologues, whose ultimate goal is to undermine the program.
Thus, in 2005, the Bush administration tried to push through a combination of privatization and benefit cuts that would, over time, have reduced Social Security to nothing but a giant 401(k). The administration claimed that this was necessary to save the program, which officials insisted was "heading toward an iceberg."
But the administration's real motives were, in fact, ideological. The anti-tax activist Stephen Moore gave the game away when he described Social Security as "the soft underbelly of the welfare state," and hailed the Bush plan as a way to put a "spear" through that soft underbelly.
Fortunately, the scare tactics failed. Democrats in Congress stood their ground; progressive analysts debunked, one after another, the phony arguments of the privatizers; and the public made it clear that it wants to preserve a basic safety net for retired Americans.
That should have been that. But what Jonathan Chait of The New Republic calls "entitlement hysteria" never seems to die. In October, The Washington Post published an editorial castigating Hillary Clinton for, um, not being panicky about Social Security - and as we've seen, nonsense like the claim that Social Security is a Ponzi scheme seems to be back in vogue.
Which brings us back to Mr. Obama. Why would he, in effect, play along with this new round of scare-mongering and devalue one of the great progressive victories of the Bush years?
I don't believe Mr. Obama is a closet privatizer. He is, however, someone who keeps insisting that he can transcend the partisanship of our times - and in this case, that turned him into a sucker.
Mr. Obama wanted a way to distinguish himself from Hillary Clinton - and for Mr. Obama, who has said that the reason "we can't tackle the big problems that demand solutions" is that "politics has become so bitter and partisan," joining in the attack on Senator Clinton's Social Security position must have seemed like a golden opportunity to sound forceful yet bipartisan.
But Social Security isn't a big problem that demands a solution; it's a small problem, way down the list of major issues facing America, that has nonetheless become an obsession of Beltway insiders. And on Social Security, as on many other issues, what Washington means by bipartisanship is mainly that everyone should come together to give conservatives what they want.
We all wish that American politics weren't so bitter and partisan. But if you try to find common ground where none exists - which is the case for many issues today - you end up being played for a fool. And that's what has just happened to Mr. Obama.
Paul Krugman is Professor of Economics at Princeton University and a regular New York Times columnist. His most recent book is The Conscience of a Liberal.
Copyright 2007 The New York Times Company
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63 Comments so far
Show AllFolks talk about forming a new Progressive Peoples party and then suggest voting and joining the Greens, Socialists or others.
These are not a new progressive party!
In this system (Reality) the only thing we can do is simulate what we would expect of a better system.
That is if the other 3rd parties would realize that if they want real influence they have to begin to form coalitions and work together on common goals...just one or two would be a great start for the beginning of the basis of a "new progressive party" to become self evident.
We Progressives have not shown that we can organize effectively in the System that we have now because we all want everybody to join the tactics and agenda that has been set and we always end up with nobody elected who we support. We are divided by all the 3rd parties because we don't have a clue on how to network the political system yet.
The Gong Ho Greens say 'Have Dennis join the Greens, we are the best and only!" and the Gung Hoes of all the other 3rd parties well say basically the same and they will not join together to support the best progressive of the two major parties (I know there is only the Capital Party).
So If you want to change the two party system the Independents and 3rd party folks will first have to show that they have some ability to organize and work together like other governments do already to accomplish at least one goal... (Like treatment and solution for the causes of War). Dennis is out in front on this, but most progressives who want what he wants will not vote for him because we do not have the kind of system that the 3rd parties want. So we go in never ending circles of complaints that go nowhere.
If we want to be more effective Progressives, fight inside our Third party to begin to infiltrate the big System and then we will have both our independence and greater influence in the system that we have now.
Even if you just want to change the system, this is the way to do it.
**********FREEDOM POEM**********
FREEDOM rings like the sound of money.
Jingling LIBERTY for sale on Monday;
For sale by license, fee and permit,
All week long if you can afford it.
FREEDOM comes and FREEDOM goes.
When you want to escape oppression's woes,
Go to the government office where
FREEDOM is sold for a price held dear;
Sold by license, fee and permit,
All week long if you can afford it.
by Thomas G. Miller
"We all wish that American politics weren't so bitter and partisan. But if you try to find common ground where none exists - which is the case for many issues today - you end up being played for a fool. And that's what has just happened to Mr. Obama."
Great article. The Repugs didn't get the POTUS, the House, Senate, the SCOTUS, the city councils, mayors and most governorships by being bi-partisan. And Dems have Biden saying he would appoint Repugs to his cabinet and Obama playing the bi-partisanship losers card with a Dem majority just elected in Congress that gives Bush whatever he wants.
starofthesea -- No, it wasn't supposed to be a joke. It is my opinion. While I can agree that it may be wrong to lump Kucinich in with the likes of Hilary Clinton and Joe Biden, I feel he is part of the old guard Progressive wing of the Decmocratic party. I like a lot of what he says (I really appreciate that he addresses our monetary policies with the Fed) but I don't see him straying from a Progressive approach if necessary. For example, if he ended U.S. participation in NAFTA and untaxed outsourcing (a good thing), would he then allow U.S. companies doing business here to operate under fewer governmental regulations and taxes? I don't think he would. That, to me, is old guard. That said, I do think he is a much better choice the Clinton.
Do you really don't think people don't want to be weaned from social security? I'm not sure the working family seeing 15% of their income going to a phantom trust fund but sees no savings in their bank account feels the same way. What about the woman whose husband just died and she only gets $350 from social security to help cover funeral expenses although her husband paid into social security for over 30 years. Then there are the people who die before collecting benefits. Not only will they never see that money neither will their families.
Barak Obama vs. Ron Paul for President? Hmmmm -- I guess we'd really have a choice if that were the case. That wouldn't be so with Clinton vs. Giuliani.
I don't have any problem with the gov't working for the public good ("promote the general welfare"). I just don't think it should be done in a way that makes the public dependent on the gov't.
I hope that a future Krugman column will elaborate on the proposition that our country's financial health will be determined primarily by the growth rate of per capita health care costs. Discussants have almost entirely ignored this point. I suspect it's probably very important, and in any case it suggests that a single-payer health care plan should come right after peace on the next administration's laundry list.
Sucker is as sucker does.
Obama playing nice trying to win all sides of a one sided coin....the US has money for Iraq, Afghanistan and other "acts of freedom" but none for Social Security and Child Health Care. Say that Barack and you got my support, but until then, Kucinich all the way.
Good luck on raising the salary cap! Remember, the corporations must pay matching funds into Social Security for their employees. Ordinary Americans don't vote in sufficient numbers and don't make political contributions in sufficient amounts to defeat corporations and the wealthy. Besides, any new Social Security revenue would just get spent by the government on other stuff. We had our chance with Al Gore and his lockbox, but stupid America just laughed. Now we've got what we deserve. Sorry about that.
In all due respect to Krugman, Obama focused on the inequality of the social security system- a regressive tax- not 'the crisis'. Obama asked simply whether it is fair that some people pay into the system on the basis of 100% of their income, while those making hundreds of thousands or even millions of dollars pay into the legal fiction that no one in America makes more than $80,000 some dollars. People like Bill Gates are paying into Social Security on the basis of a legal fiction that translates into them paying less than 1% of their income towards insuring Social Security's future, while the people who can least afford the Social Security payments are paying on the basis of their actual income, under $80,000 some dollars.
As Leon Trotsky once said, we should have 'a sliding scale of wages' to rectify the problems with inflation and the tendency of the exploiter class to hold down the minimum wage, [or the proportion of their income that the government can tax to help fund Social Security], for a number of years to the point where the exploited class is making as much as it used to and paying the largest proportion of Social Security, while the exploiter class pays didley squat and invests their future in hedge funds exploiting workers in third world sweatshops. Obama is merely pointing out that the process of diminishing returns is systematic and lies at the heart of how we fund the Social Security program.
The bigger question is why is the taxable income ceiling fixed at $80,000 some odd dollars? These kind of regressive taxes- including the fact that certain states over rely on sales taxes instead of income taxes- are one of the reasons that median income is falling and average income is rising in America-inequality-.
BTW I agree with aminahyaquin about the Kucinich parade. Go Obama.
social security 'crisis' can be easily solved by tieing the payment increases to the inflation rate
Obama is trying to champion a non existent cause. On major policy issues that affect the commoners - be it better health care, be it saving the environment, with drawing from iraq, regulating wall street & big banks, or more scrutiny over uber corporations & it exectutive, drumming the beat to a new war with iran, pulling gas guzzlers off the streets - both democrats & republicans drink out the same stream & are blood brothers. The imaginged "bipartisanship", is already bridged by the shared practices of republicans & democrats.
The real bipartisanship, if Obama has the courage to admit and work for, needs to be between the ideological twins of republican/democratic parties & the liberals/greens.
Hari
Zydeco---I am curious about the widow you mentioned who only got $350 for funeral expenses in spite of the fact that her husband paid in to the system for 30 years. I am a widow and my husband was 55 when he died. 20 of his working years were spent on a dairy farm, which seldom generated enough profit to have to pay in to Social Security. Before that he worked various odd jobs. All the same I am entitled to $625/month on HIS benefits. Something is wrong with that picture you painted.
S.S is not a perfect system but I, for one, am extremely grateful it is there for me now when I need it. We have got to stop acting like spoiled children saying "MINE" all the time. We are so worried that someone else might benefit from our hard work. Sharing and pooling resources is a good thing. Don't we try to teach our small children about sharing?