"Clinton Leads Toward a Plan to Invest Some Soc. Sec. Taxes i n Market"

[Carl Remick]

Re Josh's:  "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."

Well, if nothing else, actively promoting the idea that privatization of
Social Security *could* be "a backdoor way of socializing the economy"
might be the best way of scaring the bejeebers out of the right and
stopping privatization in its tracks.

Carl Remick

-----Original Message-----
From: joshua william mason [mailto:jwm7 at midway.uchicago.edu]
Sent: Friday, December 11, 1998 11:59 AM
To: lbo-talk at lists.panix.com
Subject: Re: "Clinton Leads Toward a Plan to Invest Some Soc. Sec. Taxes
in Market"


Nathan Newman wrote:

> -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