> -But isn't exactly that "administrative nightmare" the motivation for
> -privatization in the first place?
> No. Social security in its present form has the lowest administrative
> costs
My question was unclear--I'm well aware of the relative administrative costs of Social Security and private funds. What I meant was, isn't *creating* what you call an administrative nightmare the agenda behind privatization? I hate to spin conspiracy theories, but I don't see how else to explain how consistently mendacious this "debate" has been.
> The Left should have a strategy for the privatization side of the debate
> only as a backup, not as a front-end advocacy. But we should be
preparing
> for it, even as we campaign against the "Wall Street takeover of social
> security."
I don't entirely disagree with this, or with the similar point made by Carl Remick. But let's be clear: any form of privatization will be disastrous, and looking for a potential social-investment upside is really grasping at straws. As another example of where something similar has been tried under far more propitious circumstances and proved impossible, consider the Swedish wage-earner funds.
Incidentally, South Africa disinvestment and the like are different from what you're talking about, since disinvesting funds claimed not to be sacrificing returns.
> > Given the choice
> > between capital-heavy, low-wage industries and labor-heavy, high-wage
> > industries, Social Security funds should be invested in the later for
the
> > simple fact that promoting the later itself increases the FICA taxes
paid
> > back into the system.
> -Interesting idea, but are you aware of *anyone* who's actually
advocating
> -this?
> Not that I know of.
Exactly. In the AFL-CIO Public Policy department, the strategy is 1) to oppose any form of private accounts as an "over my dead body issue" as Tom Lehman put it, 2) to hold out the possibility of partial privatization with the government investing the funds as a compromise, and 3) to make it absolutely clear that in that case there would be a firewall between those investments and any kind of social agenda. So not only is it not being proposed, it's been explicitly rejected. To suggest that SS privatization might actually be a backdoor way of socializing the economy, or even of just establishing some kind of industrial policy (and aren't the capital-intensive industries the high-wage ones, BTW?) is about as reasonable as suggesting that welfare reform was a good thing because it gave us a chance to put full employment on the agenda.
The idea of financial democracy is interesting, but in the context of Social Security it just muddies the issue.
Re mbs:
> As jks noted...
I hate to be picky, but that was me, jwm.
Josh