Obama: Played for a Sucker

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The New York Times

Obama: Played for a Sucker

by
Paul Krugman

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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