Sunday, January 23, 2005

Lies, smears, ignorance & weakness

So, where are all those politicians, who, just a few years ago, were telling everyone Social Security was going broke? Perhaps it was just to scare the shit out of senior citizens? To get their votes? Now the President has the courage to take on the "third rail" of politics. He is proposing that workers be permitted to set aside a small percentage of their contributions into a 401k type plan. So what are the demagouges saying? "This will be a disaster". The only disaster will be if nothing is done. - Sailor

Lies, smears, ignorance & weakness

By Colin McNickle

TRIBUNE-REVIEWSunday, January 23, 2005

President Bush's plan to reform Social Security is doomed to failure. You can smell it in the wind. If the massive disinformation campaign being waged by political, academic and media liberals doesn't kill it, then the many invertebrate weasels who pass for conservatives and Republicans these days surely will.
It's what happens when you set your sights too low.

Those opposed to the president's quite modest plan to allow workers to invest a small percentage of their Social Security conscription into better performing and inheritable personal accounts are relying on simple lies and gross ignorance to "make" their case.

These polished purveyors of government paternalism insist there's nothing wrong with a pyramid scheme that cannot be sustained. The "trust fund" that does not exist is strong, they say. Personalized Social Security accounts will enable the rich to get richer and, because of the "unguaranteed" and "risky" nature of the dastardly free market, the screw will be turned ever deeper into the poor, they cluster cluck.

And the template of a smear and fear campaign is born, adopted and adapted far and wide by those either blind to their own hypocrisy -- as dedicated socialists are wont to be -- or hoping you're too ignorant to catch it. To wit, the tout of the AARP in a full-page newspaper ad: "Winners and losers are stock market terms. Do you really want them to become retirement terms."

Never mind that the AARP ad shows not stock traders but, as notes, "a wild trading pit and a board listing 'cocoa,' 'sugar,' 'coffee,' and other commodities." Commodity trading indeed is considered quite volatile. But sugar futures are in no way part of the Bush Social Security reform plan.

Oh, and let's not forget that AARP itself advertises more than three dozen stock and mutual-fund investments to its members, the Web site reminds.

But stock trading is a big risk, too, wail other critics of the Bush plan seeking to maintain a program that redistributes wealth instead of converting to one that would create wealth across all social strata. "Things may be good in the good times, but what about when the market goes down?"

Actually, history shows returns would continue to be better than Social Security, says economist Larry Kudlow, citing research by Princeton economics professor Burt Malkiel:
"(F)rom 1926 to the present, yearly stock market returns have averaged about 10 percent pre-inflation and 7 percent after-inflation. The absolute worst return for a 25-year investor who started in 1929 was 6 percent; for a 35-year investor it was 8 percent."

Social Security's return? A meager 1 percent to 2 percent (but often a negative return for some cohorts, particularly blacks).

The facts are quite clear. For cryin' out loud, even Bill Clinton understands the approaching actuarial agony. Yet some Republican "leaders," such as Rep. Jim McCrery, R-La., and Rep. Bill Thomas, R-Calif., appear ready to cede their ground before even attempting to stand it in Congress.

Mr. McCrery is chairman of the House subcommittee on Social Security; Mr. Thomas is chairman of the all-powerful House Ways and Means Committee. Both say they'd consider tucking tail and increasing taxes as part of any Social Security reform package to win Democrat support.

Capitulation as "compromise"? Tax hikes as "reform"? Daffy Duck lives here.

Not only should Messrs. McCrery and Thomas and the GOP at large be leading the charge in exposing the Democrats' lies, they should be pushing for Social Security reform far bolder than the president seeks. The Chilean model, detailed here several weeks ago, comes to mind. It's 100 percent privatization that has worked incredibly well for 20 years.

Don't hold your breath for breathtaking reform. And failure to act even on the president's meager plan -- and it appears that failure is at hand -- will turn the long-held impression that congressional Republicans cannot lead into incontrovertible fact. Debating new shades of lipstick for the pig is not "leadership."

Economist Arthur Goddard, in the preface to a new edition of 19th century French economist Frederic Bastiat's "Economic Sophisms," offered this:
"The public has been despoiled of a great part of its wealth and has been induced to give up more and more of its freedom of choice because it is unable to detect the error of the delusive sophisms by which protectionist demagogues, national socialists and proponents of government planning exploit its gullibility and its ignorance of economics."

Added late economic journalist Henry Hazlitt in the introduction to the same edition:
"Economics is pre-eminently a practical science. It does no good for its fundamental principles to be discovered unless they are applied, and they will not be applied unless they are widely understood."
Liberals, progressives and socialists are counting on lies, smears, public ignorance and the institutional weakness of Republicans to preserve a program whence they can draw political and cash sustenance to "benefit" the lives of those they rob. Tragically, they appear to be winning the day.

Correction: Seth Meehan's name was spelled incorrectly in last week's column.

Colin McNickle is the Trib's editorial page editor. Ring him at (412) 320-7836. E-mail him at:

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