Tuesday, May 31, 2005
Where is Ludlum when you really need him?
Friday, May 27, 2005
Thursday, May 26, 2005
Initially I was inclined to think that the Republicans had been taken yet again, and that John McCain had sold out his party. Perhaps it is my traditional discomfort as a conservative who relies on the Republican party to fight the good fight that caused me to expect a surrender of some sort. Now, though, I'm not so sure.
The details of the deal are well known, so I won't repeat them here. The implications, I think are less clear, but as I read the landscape the key results are the following:
- Owen, Rogers, and Pryor will receive up or down votes in the near future. This virtually guarantees their confirmation
- Future nominees will only be filibustered in "extraordinary circumstances".
- The deal is silent on the remaining nominees, but all except Saad have sufficient senatorial support, and are also less controversial than the three mentioned in the deal.
- The nuclear option is reserved for use in future instances of bad behavior by the Dems
- The filibuster, which can be viewed as a conservative tool, is preserved.
The first consideration is the near certain approval of Owens, Pryor and Rodgers. These three were were the nominations that caused the most upset with the extreme left. The deal assures that they will be sitting on appellate benches in the very near future. Advantage: Republicans.
Democrats also agreed to stand down from filibustering in all but extraordinary cirmcumstances. The key complaint from conservatives has been that this definition is undefined. Indeed, my own initial thoughts were along this line as well. However, I'm not so sure this is the case. If the Democrats have agreed to stand down on Owens and Co., this effectively sets a bar for what can be considered extraordinary, and in doing so provides the Republicans with substantial leeway in future nominations. The most immediate impact of this standard, is that all the remaining nominees most likely will receive votes - McCain said as much on Fox News this morning. Assuming the nominees have Republican support, they will then be confirmed. This is exactly what enacting the nuclear option was supposed to accomplish. Republicans appear to have achieved it without dropping the big one. Advantage: Republicans.
The nuclear option remains viable as a result of this deal. Again, McCain repeated this on Fox today, and Frist has also reserved the right to return to this option should the Democrats misbehave in their view. My main concern initially was that Republicans gave up this leverage for little or no promise from the Democrats. The fact that they have retained it, while gaining an agreed upon path to confirmation for the nominees is a stunning victory. I remain leery that this will play out as I've described, but for now I'll choose to be optimistic. Advantage: Republicans.
Finally, the deal preserves the filibuster. While I am not a big fan of this tactic, there can be no denying that the filibuster is inherently conservative. Remembering that in the words of the great William F. Buckley that the role of conservatives is to "stand athwart history yelling "Stop!"", allows us to see why. The filibuster is a means of "conserving" the status quo, and slowing change to a pace that is more considered and agreed upon. In recent years it seems that the radicals in government have been the conservatives, and as such viewing the filibuster as inherently conservative, might be counter-intuitive. As one of the conservative radicals, I would argue that our insurgency has been an effort to reign in government, and return to a more traditional role for the federales of low taxes, reduced regulation, and greater personal freedom. In this way, our "radicalism" has been a conservative fight.
Before you complain that W. has done none of the above, I would just like to remind you that on many occasions I've said that our great leader is no conservative.
So, all in all, a decent victory for the Republicans I'd say, but we will have to be vigilant in ensuring that the deal plays out as described. There is a very real possibility, perhaps even a likely one, that this will all break down on the second Supreme Court nomination that W. is likely to make. If so, it will be important for W. to make sure that he is shrewd about those he nominates, and does the necessary ground work with the Republican 7 prior to nomination.
One word: Pathetic. Recall this mope now.
Wednesday, May 25, 2005
Tired of politics, war, filibuster deals, and the insane rantings of the left? Me too. How about something completely different?
Mrs. P and I went to see the national tour presentation of Wicked in Chicago last night and had an excellent time. For those of you unfamiliar with the storyline, Wicked presents the happenings in Oz, before the lovely Dorothy blew in and caused such havoc in Emerald City. Without getting into too much detail, it is a clever twist that builds off of the original story by L. Frank Baum. Lest you think the story is a mere trite play on the original, Wicked does attempt to provide the musical answer to the question, "is one born wicked, or do circumstances cause one to become wicked".
With it's references to Evita, and the control of the governed by fear, Wicked also questions whether there is true evil in the world, or just moral ambiguities that become conveniently defined in black and white terms by those in power for their own nefarious uses. No doubt, in the age of the evil Karl Rove and his pet Monkey, ChimpyMcHitlerBurton (stolen from Protein Wisdom), our modern day liberal friends will literally be vibrating with glee in the coffee house after the show, as they discuss the parallels with the current American administration.
Ah, but there I go on politics again, and I wanted to avoid that. I do think the question of moral ambiguities, while much too large to be appropriately considered in this fine musical is one of the biggest divides in American politics today, and merits further discussion. Liberals tend to think that conservatives fail to appreciate the shades of grey that exist in these questions, while conservatives believe that liberals get so caught up in the uncertain nature of these questions, that they are incapable of making distinctions between good and evil. I believe that at the extremes, each group has a point. Perhaps we'll consider this question more here at the Pursuit.
As for the musical, I strongly recommend the show. Those with more culture than I, will complain that the music is more than a bit pop oriented, and that the storyline can be considered a bit shallow, despite it's ambitions for greater depth. They would be correct in this assessment, but I'd argue that not everything can be Shakespeare, and Wicked is quite comfortable with it's position in the cultural mainstream which allows it to soar and entertain.
As for the set and costumes, they are extremely well done. The set is constantly changing and through excellent use of color and lighting creates a visual landscape that is every bit as stunning as anything one would find in other visual mediums. The costuming is lavish, and does a good job of visually distorting the actors physical features to ensure that the audience is aware that these people are from a very different land.
All in all, a strong recommendation from Mr. and Mrs. Pursuit. Even more, if you have kids, this would be a great show for them to see. Wicked's songs are delightful and quite approachable for kids, and the staging provides the visual wallop to keep a generation raised on TV very interested.
Monday, May 23, 2005
Friday, May 20, 2005
Just as I finish my screed below on vegetarians, one of my friends calls for lunch. Appropriately, we are headed to Manny's. If you haven't ever been to Manny's you are missing one of the great social and cultural palaces of our town.
Manny's is the place in Chicago where you can go to lunch and sit next to the captains of industry, Mayor Daley, or any number of aldermen. Of course, it's main attraction is the corned beef. Huge sandwiches of perfectly seasoned beef (Vienna of course), served on rye bread and accompanied by a potato pancake, I always ask Gino for two. Maybe I shouldn't have had that Nueske's bacon for breakfast?
You must click on the link above for Manny's website, and if you have a moment be sure to watch their TV commercial. The host's accent is typical "Chicagah", and the guy flipping the knife is Gino himself.
If you're ever in Chicago, stop on in, and don't worry about your heart, complimentary defibrillation comes with every meal!
Well adjusted people, of course, are well aware of how ridiculous such a commitment is, and I have no doubt that some very wise scientists and psychologists will soon find a strong link between vegetarians and deep, deep psychological issues. Until then, every parent of a young girl will no doubt experience this phase. We've only had one occurrence so far, and it was with PD2. After a sleep over she decided she would like to drink soy milk. Not full blown vegetarian's, but none-the-less a nutty idea in it's own right.
I agreed to buy some, adding the important caveat that she would have to consume the entire half gallon before she could drink "our" milk. A few weeks later, on the way to the store, the following conversation ensued:
Me; Oh, PD2 remind me to pick up some milk at the store.
PD2: Remember when I thought we should get soy milk?
Me: Yup, it took you a while to finish the whole 1/2 gallon. Should we get some more?
PD2: No, I think that was just a "phase" (using fingers to make quote marks)
Me: I kind of expected that.
PD2: Thank God that one didn't last too long!
I was reminded of this experience by the linked article on NRO. I think the writer deserves an hearty "well done".
Thursday, May 19, 2005
Linked above, is the transcript of an interview that Hugh Hewitt had on his show last night with Terry Moran, ABC's White House correspondent. The substance of the interview was primarily about the Newsweek debacle, and it is a very good read. However, this interesting nugget of information was revealed by Mr. Moran as well:
HH: Let me ask you something. Major K, a major in the Army who is reporting from Iraq on his blog all the time says, all this being said, it is no small wonder that a gulf has opened between journalists and the general public. I think even the most John Q. Sixpacks know when they are being fed a line of blank blank blank. My brother called me a journalist once during a conversation about this blog. I was offended. That is a general impression among the American military about the media, Terry. Where does that come from?
TM: It comes from, I think, a huge gulf of misunderstanding, for which I lay plenty of blame on the media itself. There is, Hugh, I agree with you, a deep anti-military bias in the media. One that begins from the premise that the military must be lying, and that American projection of power around the world must be wrong. I think that that is a hangover from Vietnam, and I think it's very dangerous. That's different from the media doing it's job of challenging the exercise of power without fear or favor.I agree with Moran that this is a very dangerous situation. In general, I think many reporters do a poor job of trying to understand the business, industry, or policy that they are covering, and as a result, misinform their listeners. This is bad enough when they are covering say the pharmaceutical industry, but as we have seen can be outright deadly when they discuss foreign policy, or military operations.
Perhaps it would be a good idea to hire reporters who have actually spent time working in the areas that they are assigned to cover.
Wednesday, May 18, 2005
The Minority Leader that just keeps on giving. I really am beginning to like this guy since he may, just may mind you, prove that Bill Frist isn't the dimmest bulb in the U.S. Senate.
Speaking today at the beginning of what may (!) be a lengthy debate on Bush's judicial appointments, Dim Harry was in the mood to tell a little story. Gosh I hope young Devan - remember the precoucios lad from Satelite who wants to be just like Harry - wasn't listening, because our Harry told another one, and we'd hate to see young Devan mess up on a future SAT question as a result. I paraphrase, since I don't have a direct link:
"Thomas Jefferson asked George Washington what the purpose of the Senate was. Washington looked at Jefferson and said, "see that coffee you've poured in your saucer? Why did you do that?" Jefferson responded, "To cool it". "Exactly", said Washington and that is the purpose of the Senate, to cool debate and partisanship."
Dim Harry went on to explain that the filibuster was just such a tool, and as such should not be changed.
I cannot prove this exchange never took place, and it really doesn't matter, since even if it did the conversation would have ocurred at a time when the filibuster did not exist. It was introduced approximately 50 years later, and certainly is not mentioned in the Constitution, which, by the way, specifically states that a simple majority is needed for judicial advice and consent. So if the Senate was providing sufficient cooling without the filibuster according to our founding fathers, then why should we have it now? But I digress.
It is tempting to point out some problems with Dim Harry's story, and to avoid being 100% Snark (hat tip to you PDS), I will justify this in a historical context. My first thought is that it is highly unlikely that the two were drinking coffee, since our founding fathers enjoyed tea as their designated caffenater. One tends to remember a little something called the Boston Tea Party at at times like this. Admittedly, this is just a quibble. There is a much bigger problem with our Harry's story.
More outlandish is the idea that Jefferson, of all people, would go to Washington for advice on what the role of the Senate is! It is well known that Jefferson thought Washington to be a bit of a plodding dolt, who was useful in leading the country because of his popularity with the people in it's early years. None-the-less, Jefferson despised Washington because of Washington's views on the need for a stong Executive Branch. In this view Washington was aligned with Jefferson's arch enemy Alexander Hamilton, with whom Jefferson carried on a lifelong feud that extended years after Hamilton actually died.
As a result, Jefferson clearly looked at Washington as the puppet of the master Alexander Hamilton, and no serious student of American History would ever take seriously the notion that Jefferson wanted Washington's input. If the conversation took place, it is more likely that Jefferson was attempting to mock Washington's view as a mean's of promoting his own. This, I'm quite sure is not the point Dim Harry would care to make.
None-of-this is to suggest an opinion on the filibuster issue today. Frankly, I think the Dems have abused this priviledge for scores of reasons that others have discussed. I just find it a bit shocking that out of all the Democratic members of the Senate, this is the guy that rose to the top of the heap. Inarticulate, apparently uninformed and prone to intemperate outbursts he is beginning to sound more like Tom Delay, without the bad hair!
Well, how is this for the latest cultural outrage. Click the link for the article, because no way you're going to believe me, but the University of Iowa is offering a course in Pornography. Yup, thats right a course in porn. Here is the outrage.....they are charging students for this course, but will not be actually showing any porn! You've got to feel sorry for these poor kids, duped into a semester of unending lectures on pornography's influence on the mainstream culture. Like anyone really cares.
Well, I will not stand for this outrage and have posted a small contribution of a delightful young lass, who apparently goes by the name "Crissy M" as my contribution to help out these poor misled Hawkeyes.
As most readers here know I have come to detest Andrew Sullivan's blog. In my view, where he once provided an interesting perspective, and some well conceived opinions on the issues of the day, he seems to have devolved into hysterics. Andy's blog these days seems to be little more than a forum for him to pursue his hobby horse issues of Gay Marriage, and Abu Ghraib. Those that don't toe Andy's ideological line, are either anti-gay bigots, or worse and apparently he has been attacking the InstaPundit lately.
Perhaps the pressure to produce every day has finally taken over for his better judgment. Andy himself, promised to quit blogging a while ago, yet he continues with his daily dish of hysterics. For this reason, I quit reading the man long ago, preferring other sources for alternative views.
In this link, the InstaPundit has finally had enough and let Sullivan know it by telling him that Andy's opinion ain't quite worth what it once was.
Monday, May 16, 2005
Thank you to PDS for filling in once again, I enjoyed his post on "Two Architects" and must admit that I have never read any Ayn Rand. Clearly my education has been incomplete, and I will commit here and now to rectifying this flaw. As I read PDS' entry, I couldn't help but feel there is a personal story there regarding our friend and commenter's journey. Any interest in sharing this further with us PDS?
Thank you's also go to the delightful Mrs. P for filling in with her (6:45 in the a. frickin m.!) Saturday morning post. I was glad to see she was well received in the comments section by the regulars, and I'll leave the invite to post open to her in future. Here is where I'll let you in on a little secret. She had been to see U2 on Thursday night and to be honest I was a little concerned that she would post some fawning ode to Bono! Turns out, as usual, I should have known better. Perhaps in the future she can tell the tale of how I abandoned her this past weekend in the midst of the soccer tryout/which team does PD1 join controversy!
Otherwise it is back to the business of doing some consulting, looking around for a job, and trying to educate the great unwashed in the glories of conservatism. In between shootin and fishin this weekend, I was able to do some good thinking on future post topics. My thoughts ranged from Korea, Iraq and Iran, to why liberals are so over wrought with Christian Phobia, to finally why some men insist on using the effeminate "pee".
I'll admit, some drinking may have been involved.
Upon my arrival home, the Sunday version of the Liberal Death Star was on my doorstep with this thought provoking article. I must confess, that as I read Mr. Bennet's piece I began to feel both a sense of intellectual superiority and a certain degree of "I told you so".
The article, "The Mystery of the Insurgency" details the conundrum that many believe is presented by the "insurgents" in Iraq. Mr. Bennet goes to great lengths to point out what is obvious to many of us; the "insurgents" do not appear to be acting in their own rational self interest. To date, they have failed to present a coherent alternative to the democratically elected government in Iraq, they have not put forth a charismatic leader that might attract a following, and their strategy appears to have shifted in recent months to blowing up innocent Iraqi's who otherwise might be convinced to support the "insurgents".
To Mr. Bennet and those quoted in his article, this is a great mystery. Quoted is Anthony James Joes (three first names?) a professor in Philadelphia who says,
"Instead of saying, 'What's the logic here, we don't see it,' you could speculate, there is no logic here,".....the attacks now look like "wanton violence,"......"The insurgents are doing everything wrong now," he said. "Or, anyway, I don't understand why they're doing what they're doing."
Mr. Bennet really doesn't provide any further quotes supporting the idea that the "insurgency" is a mystery, as most of his remaining quotes appear to be providing tactical information on the difficulty of stamping out the insurgency, or historical perspective on what has and has not worked in other campaigns during the last 100 years. For this reason it is hard to tell if this mystery postulate is held by military professionals, or if it results more from the lack of understanding that the media and academics have of military strategy and tactics.
In my view Mr. Bennet's article is indicative of the broad lack of understanding that many in the media have with military operations. The War on Terror has, time and again, shown how this gap in knowledge has lead to erroneous reporting from the region. We all remember how the media insisted that our military would be held back by the "brutal Afghan winter", and then again by the "brutal Iraqi summer". We saw our main reporting networks talk about how poorly the Afghan campaign was going, only days before the fall of the Taliban. In Iraq our media reported that the invasion had bogged down, when in reality they had to hold up because they were in danger of out running their supply lines.
So it comes as little surprise to hear now that the "insurgency" is a great mystery. Allow me to suggest, that perhaps what we have here is not a mystery at all, but another example of misreporting. Members of the blogosphere (how I hate the term) have insisted for quite a while that the media was mis-lableing the violence in Iraq as an insurgency, and rather should be referring to Zarqawi's group by the more appropriate "terrorist" label. Much of this criticism has been dismissed by the media and it's supporters as so much semantic pedantism. Unfortunately if the media had taken note of this advice I believe talk of this great mystery could have been avoided entirely.
In reality, there is no "mystery" except that which exists in the minds of those that insist on referring to terrorist as "insurgent's". Words, as the saying goes, mean things and insurgent is a defined term meaning "one who revolts against civil authority" or "a member of a political party who rebels against it's leadership". In other words, an insurgent is typically, a member of a group that presents a competing political view.
Terrorist however has a subtle but distinctly different definition of "one who coerces through the use of fear, intimidation or violence". To be a terrorist, one only needs to use violence, but to be an insurgent one must fight with ideas, and perhaps violence, but certainly not always. There is an underlying logic that is represented by an insurgent that does not necessarily depend on violence for it's appeal. Terrorism is almost the exact opposite of insurgency in that it is violence seemingly for it's own sake that is not necessarily dependent on political thought for it's coercive power.
When viewed in this manner, the insurgency is not a mystery at all. The terrorists are basically nihilists, directed by a leadership that realizes the game is going poorly. Bennet's article contains the key to this view in it's body. According to Che Guevara:
"Where a government has come to power through some form of popular vote, fraudulent or not, and maintains at least an appearance of constitutional legality," he wrote, "the guerrilla outbreak cannot be promoted, since the possibilities of peaceful struggle have not yet been exhausted."
Sadly, Bennet fails to recognize the answer, because he is a prisoner of his own mistaken perspective on who the terrorists really are. It is clear that the terrorists now realize that with elections their ability to beat the Americans is lost. Indeed, the elections changed the enemy for the terrorists from the American G.I., to the Iraqi people. This explains Mr. Bennet's great mystery on why the suicide bombers target the man in the street; they realize that their only hope for victory is the long-term distabilization of Iraqi society. As long as the terrorists were killing American soldiers they couldn't achieve this objective. Now, through the slaughter of civilians they hope to accomplish their goal.
We have seen this tactic before. Lebanon presents a historical example, and also an indication of just how difficult victory will be for Zarqawi and his crowd. Hezbollah, funded by Syria and Iran spent two decades destablizing Lebanon and creating an excuse for Syria to occupy the country and provide "security". In doing so, Hezbollah was able to rob the country of it's wealth and share the spoils with Syria, a country where the economy is largely supported by it's pilfering of Lebanon's businesses.
The goal for Zarqawi is the same. If he is able to destabilize Iraq over the long-term, then U.S. influence in the region will be diminished, Iran's ability to insulate itself from the pressures of reform will be greatly enhanced, and Zarqawi, as the successful head of Al Queda (I'm projecting ahead here) will be able to enrich and build his organization with bribe money squeezed from other Arab states.
We can argue whether or not the U.S. is fighting the terrorists with the right tactics, as there are undoubtedly many ways in which the effort can be improved. However, viewed in this light the overall U.S. strategy of fighting terror on the ground in it's home of the middle east makes sense. Beat the multi-national force of terrorism in Iraq, and we likely will not have to fight them in Europe or on the U.S. homeland.
Saturday, May 14, 2005
I don't want to sound cliche on my first blog, but isn't the good life what you make it. Too much any more I think we all look for the instant gratification. I know it's an over used phrase but it describes a phenomenon that I personally worry about. What happens to the work ethic when expectations are for immediate success? What happens to the concept of learning through hard work and grit?
I watch a whole generation used to television, cell phones and PC's. They are entirely more prepared for commerce. They are entirely more adaptable and understand much more about the world than I did at this age, but I wonder about their values. Nothing seems firm. Everything is situational. People are no longer responsible. They are victims of their own life. Is this the a direct result of the right to life, liberty and the pursuit of happiness?
Personally, I think NOT!
We have confused rights and entitlements. We have the opportunity to succeed if we try hard and we shape our life. We are not entitled by virtue of our existence to much of anything. We are plunged into circumstances from which we must shape our lives. There is no wallowing in circumstance, only the pursuit of goals. There is seeking. There is trying. There is failure and there is growth. Happiness is the inner recognition that the journey no matter how complicated, no matter how bruised and battered has led to something. There is accomplishment. There is purpose.
Now try to teach that to a child - a child who has access to television. Turn the knob and out pops entertainment - instantly. AH - but this is part of my good life. It is hard and tedious. So much attention to detail but what greater pursuit than helping others - your own flesh and blood achieve a sense of self, a sense of purpose and an inner core that will guide them for life. Don't get me wrong. I am a working mother, with more interests that you can shake a stick at. But raising my children is the hardest most gratifying part of my life. It is truly the good life. If we do it right, they will fail, they will fall and they will falter. It will hurt to watch them. They will try and they will grow. They will never fear hard work and they will know the satisfaction of accomplishment not entitlement.
That for me is the good life. Every minute of every day. It is great to be alive. Work hard and celebrate the journey.
Friday, May 13, 2005
I am not an architect, but my two favorite novels are about architects. Both were written by foreign authors. Both are, in essence, about the cardinal virtue, the virtue of integrity. And both paint a psychological portrait or trajectory of the novels' protagonists not unlike the trajectory of my life as an adult.
I speak of The Fountainhead, by Ayn Rand, and perhaps less obvious, A Burnt Out Case, by Graham Greene. If you haven't yet read these books, I envy you. If you happened to read them a long time ago, I recommend that you read them again. Forgive a bit of overstatment here, but in terms of essentials, it could be said that we have two choices about who we might become when we grow up: Roark or Querry.
As a younger man, I devoured The Fountainhead at least a dozen times. The thought of Howard Roark's passion for his life's work took hold and did not let go. At the ripe age of 43, the book still hasn't loosened much of its grip on me. Ayn Rand's writing sparkles in The Fountainhead, and because she had not yet reached her fame, the plot does not suffer from the ponderous tone that plagues Atlas Shrugged. There is a great deal to learn about life from the very first line of The Fountainhead: "Howard Roark laughed."
I stumbled onto A Burnt Out Case 7-8 years ago, while in the middle of a six-month Graham Greene reading frenzy. If you have not yet had the pleasure or the sadness that comes from a Graham Greene novel, please see what you can do to give him a try, but a word of caution: do not start with A Burnt Out Case. Try instead Our Man In Havana, or even The End of the Affair. Just as a teetotaler should not begin a bender with the finest scotch, crawl a bit before you walk when in comes to Greene. Paradoxically, the first lines of A Burnt Out Case begin with a parody of Descartes: "I feel discomfort, therefore I am alive."
Two architects, both commited to integrity, one an atheist, the other struggling with his faith, each a compelling figure, both created by master craftsmen. The juxtaposition could hardly be greater, or hardly be more relevant.
If you've gotten this far in this post, you are likely wondering why I am talking about this subject, or what it has to do with Pursuit's blog. This post is the beginning of an answer to an inquiry to me from a frequent commenter to this site, The Gnat's Trumpet (the inquiry is buried near the end of the comments section), but the topic also raises questions everybody might wish to ponder: Are you a Roark or a Querry? Is there a difference between the two? Do you have a choice in the matter?
Thursday, May 12, 2005
Not so many months ago, I would routinely view at least 15-20 blogs on a daily basis. I now find myself looking at about 3 or 4 per day, if that. Some of the cause of this is surely blog burnout, some of this is that the election is now well past us, and some of it is simply information overload. But I think the main reason relates to the "snark factor."
The snark factor is a function of the success of Google. Everybody, it seems, is one Google click away from superficial knowledge about any topic under sun. At the present moment, for instance, I know nothing about hedge funds. Give me five minutes, however, and access to Google, and I can pass myself off as far more knowledgable on this topic than just about everyone else. Throw in some well placed snark, and the combination is a witty "take" on the subject of hedge funds. This process requires roughly the same amount of mental exertion as watching a Saturday Night Live skit, or, perhaps more pertinent to the present thesis, a Jon Stewart skit.
I am aware of a few bloggers that are willing to drill down and avoid the temptation to snark, but not many. A great example of this is Pursuit's posts on Social Security last week. Wretchard of The Belmont Club uniformly resists this temptation as well. If you know of any qualifiers, drop them in the comments section below.
If I were King of the Blogosphere for a day, I would prohibit googling and snarking, just for that day. Then, as the Dickens might say, we just might have more of an "age of wisdom, and less of an age of foolishness."
Wednesday, May 11, 2005
I am off for a couple of days as the title says, to do some shootin and some fishin. No truth to the rumor that I got out of town before Rob read my response to his comments in the last post, by the way! None-the-less, it is probably a prudent move.
While I'm away the indefatigable PDS has agreed to fill-in and share his thoughts on the issues of the day. We're also about to have our own, "very special event" at the Pursuit as Mrs. P has agreed to think about posting something. Ussually when the networks announce a very special event it proves to be something uniquely awful. No worries about that here as I, in virtually everyone's opinion managed to marry up. So, it is with great anticipation that we all will await her first post. Be gentle, despite her suspect taste in men, she really is pretty cool.
That is all for now, by the time you read this I will most likely be headed for my first Manhattan, in a desparate attempt to remove the deep bone shattering chill of the great white north.
See you Monday!
Very busy today, but this story is an incredible example of political correctness run amok. Not one of Mr. Jefferson's fawning praisers, I still have enormous respect for his contributions to our society, and indeed, the very name of my blog.
Sadly, the oh so very sensitive folks out in Berkeley are so "perturbed" by Mr. Jefferson, that they feel (note the adjective that is in place of the word most would expect: "think") that they should rename their local elementary school. Really, just go read this, and marvel at the total lack of moral understanding that some of these folks seem to be living their lives by.
Tuesday, May 10, 2005
You've got to love this article about the U.S. Military Band playing Stars and Stripes in Red Square over the weekend. From the article:
"I've met every president. I've met hundreds of kings and queens. But marching through Moscow behind three of my soldiers carrying the American flag is pretty much the highlight of my career," said Lt. Col. Thomas H. Palmatier, commander of the Army band, which came here along with President Bush and other U.S. officials to help mark the 60th anniversary of the end of World War II in Europe. "We played inside the Kremlin walls! We played 'The Stars and Stripes Forever' on the streets of Moscow! It was a pretty emotional experience," Palmatier said.
So many fought and lost their lives to see such a day happen, and it is a tribute to how far we've come from the days when we grew up practicing "duck and cover" in school emergency drills. Thank God that when the time came for the final push to win the war, President Reagan didn't listen to those who wanted to continue to appease evil, but instead chose to confront it and name it for what it was.
President Bush should also be commended for his remarks over the weekend. Many on the left, forgetting that they were on the losing side of history, criticized Bush when he said:
The end of World War II raised unavoidable questions for my country: Had we fought and sacrificed only to achieve the permanent division of Europe into armed camps? Or did the cause of freedom and the rights of nations require more of us? Eventually, America and our strong allies made a decision: We would not be content with the liberation of half of Europe -- and we would not forget our friends behind an Iron Curtain. We defended the freedom of Greece and Turkey, and airlifted supplies to Berlin, and broadcast the message of liberty by radio. We spoke up for dissenters, and challenged an empire to tear down a hated wall. Eventually, communism began to collapse under external pressure, and under the weight of its own contradictions. And we set the vision of a Europe whole, free, and at peace -- so dictators could no longer rise up and feed ancient grievances, and conflict would not be repeated again and again.
While our good friend Mr. Putin may not have been happy with the depiction of Russia as occupier, the facts are the facts. Our obligation to those that died in the fight is to see that these facts are not forgotten, and that we continue to pursue freedom for all. It is ironic, that only a year ago when the Gipper passed, it was hard to find anyone that would admit to being on the other side of his policies that led to the end of the cold war. Yet with the passing of a couple of months, those that missed the call in the 80's were once again resisting the obligation to support freedom.
The same obligation exists today as we fight to extend freedom to the middle east. The question is who will answer the call of history and who will elect to fight it. I ran across a quote from another actor who left the Democratic party, Ron Silver. The parallels with the Reagan experience in the cold war are telling and obvious:
The party that I felt comfortable with was no longer the party that I had supported over the years because I felt that there was an indefensible moral collapse that I could not justify. They failed to come to grips with the central problem of our time post-9/11, and I found that very, very disappointing, and the company they kept: the Michael Moores and the MoveOn.orgs and the Eli Parisers made me feel very, very uncomfortable.
Here is hoping that there are enough Ron Silvers in the world that are willing to stand up, fight, and move freedom forward.
Monday, May 9, 2005
Pursuit Daughter #2 is 10 years old, and fancies herself as a free spirit, artiste. For example, on her tenth birthday she asked for a dress maker's dummy so that she could begin to design clothes. Of course we agreed because we encourage this, to a point, and want her to pursue her own dreams. We do, however, expect her to be responsible, caring and open to other opportunities in life.
Accordingly, I told PD2 that she was expected to go out for soccer this year. I think sports are an important pursuit for all kids, but for girls in particular since it helps them develop strong self images, and teaches them the rewards of effort and perserverance at an early age.
"No way Dad! I'll look like such a loser, I don't know anything about soccer!"
I pointed out that this part of her childhood was not open to negotiation.
A few days later PD2 comes to me with a shopping list for a ball, shin guards, shorts and cleats. I'm very impressed, both at her willingness to take on a challenge and at my superior persuasive talents.
"PD2" I say, "What made you change your mind about trying out? You suddenly seem very excited about making the team" I add suspiciously.
"Oh, I am Dad, I saw the team jacket that you get if you make it, and I really like it!"
Whatever works I guess.
PD1 as I've written before is very sports oriented, a hardline conservative (she is a Sean Hannety fan - something I'm gently trying to move her away from), and at 13, just beginning to think about clothes, make-up and of course, boys.
Me: "PD1, you look great this morning. That jacket is fantastic on you"
PD2: "Obviously she has a crush on X and is trying to impress him!"
PD1: "I do not, you're the boy crazy one PD2"
Much back and forth ensues, I then interject:
Me: "Well any boy that likes you is going to have to look pretty good to keep up"
PD1: "Oh, I won't date any boy that doesn't look good"
Me: "Thats kind of shallow don't you think? There are many other factors to consider"
PD1: "Of course, he is going to have to agree with all my political opinions too!"
All of us: Uproarious laughter.
I am really beginning to get excited about the prospect of at least 3 more years of Harry Reid's leadership of the Democratic party. The man is showing early signs of being the Dem's answer to Dan Quayle. Not so much for mispronunciation, but just for becoming a reliable source of idiotic declarations.
Dim Harry appeared in front of a group of High School students last week to discuss "Checks and Balances 101" There is so much material here to work with that the statements of a normal politician would not have stood out. We could have talked about how Dim Harry called the president a "loser", and whether or not this is the type of language a leader of our nation should use in a civics class where he is educating young minds, and (hopefully) encouraging the kids to get involved in politics. Or we could have talked about how the school presented a one sided view of the judicial controversy in Washington, instead of showcasing members from each side to debate their differences and involve the kids in the discussion.
But we aren't talking your normal politician here. We're dealing with Dim Harry of Satellite Nevada. The same man who used his response time to the SOTU to tell Americans a ridiculous - not to mention, uniquely dull - story about a boy that wanted to be "just like him".
Dim Harry, did it again last week. In discussing Janice Rodgers Brown our friend said:
"She is a woman who wants to take us back to the Civil War days,"
Ah, yes the antebellum south. Why it is obvious The Honorable Ms. Brown wants to do just that. I bet Condi Rice is in on this scheme too. Maybe we can get Dim Harry to comment on that one?
Friday, May 6, 2005
Buoyed by a Christopher Hitchens Vanity Fair article, that in my view was an uncharacteristically simplistic analysis at best, and some less than professional statistical analysis by U.S. Count Votes, new analysis now indicates that the idea that the discrepancy between the Ohio exit polls and the final election results was indicative of some large scale fraud, is wrong. In fact, analysis seems to indicate that the problem may exist in the exit polling methodology itself. I am particularly encouraged by this development as my question to the fraud theorists, which to this day remains unanswered, was "if the discrepancy indicates fraud, why can it not be indicative of fraud in the exit polls instead of the actual election results?" While I never believed that there was actually any exit polling fraud, the theorists inability to answer this question was a sign to me not to take them too seriously.
What is more interesting though, is that the debunking of this theory has come at the hands of members of the more responsible left. This is extremely commendable and one hopes that it is a sign that some degree of sanity remains in this important sector of our society. One of the key debunkers is Elisabeth Liddle. No doe eyed admirer of our electoral system, she writes:
"I believe your election was inexcusably riggable and may well have been rigged, writes Liddle. It was also inexcusably unauditable. I am convinced that there was real and massive voter suppression in Ohio, and that it was probably deliberate. I think the recount in Ohio was a sham, and the subversion of the recount is in itself suggestive of coverup of fraud. I think Kenneth Blackwell should be jailed."
Ok then, our friend isn't above making accusations for which she presents no evidence, but none-the-less goes on to say:
"However (and I'll come clean now in case you want to read no further) I don't believe the exit polls in themselves are evidence for fraud. I don't think they are inconsistent with fraud, but I don't think they support it either.........My analysis shows that the swing states were not in fact more wrong than the safe states,? writes Liddle. ?This evidence shows that the greatest bias was [actually] in the safest blue states... Moreover, the pattern of polling bias is the same as in the nearest comparable election, 1988, another two-horse race where there was also a large significant over-estimate of the Democratic vote and another losing Democratic candidate (Dukakis)."
Liddle goes on to explain that the discrepancies were most likely the result of over sampling of democrats, and varying degrees of exit poll cooperation between Democratic voters and Republican voters. Further debunking of the fraud theory was conducted by Rick Brady which can be found here, and even more analysis by the Mystery Pollster can be found here.
All this isn't to say that our electoral system cannot be improved. Surely it can be. As Liddle points out, just having an auditable system would seem to be the low bar test for a modern democratic state. Further, the fact that both parties have members that actively work to discourage the other side's voters, while doing everything in their power to encourage the most irresponsible voters to cast ballots for their side, is a stain on our system that must be removed.
However, fevered supporters of ill conceived theories do more to damage the argument for reform than support it. Their angry grasp of any idea that seems to support the dream that their candidate was more popular than he actually turned out to be, allows those who do not want reform to cast aside more credible calls for change as just more manical ramblings. Hopefully these important papers will put to rest the illegitimate Ohio Fraud Conspiracy, while also contributing to the effort to lead us to real reform.
Wednesday, May 4, 2005
This is certainly a worthy consideration as we debate reform, but I believe DeLong fails to recognize that many middle and upper class members of our society already anticipate that SS will not be the source of significant financial support in their retirements that it was for their parents. In this regard, perhaps DeLong's fears are already becoming reality prior to any reform.
There are, however, other interesting thoughts in DeLong's piece that merit attention. One of these is something he states, and another is something that he does not state. Lets take his statement first:
As everyone knows, Social Security has a problem: The current level of dedicated Social Security taxes is very unlikely to bring in enough money to fully pay the benefits currently specified by law beyond the middle of this century. Social Security taxes will have to go up, Social Security benefits will have to be cut below currently projected levels, or other tax revenues will have to be earmarked to pay Social Security benefits.
Interesting wouldn't you say? As Stanley Kurtz in NRO points out, I'm not sure that everyone does acknowledge the problem, as many anti-reformists have spent significant time arguing that we don't have to do anything. So it is good to see a liberal member of the academy acknowledge this fact.
What Mr. DeLong alludes to however, is event more interesting. Here is the quote:
Now let's look at Pozen's numbers for those retiring in 2075. Pozen would keep the replacement rate at 49 percent for the working poorthose making half the average income. But the replacement rate for those making more would be cut: At the average income, the replacement rate would go from 36 percent to 26 percent; at one-and-a-half times average, from 30 percent to 17 percent; at the Social Security maximum, from 24 percent to 12 percent. Pozen's proposal gradually turns Social Security from a program in which benefits rise with incomes to one in which nearly everybody's benefit is roughly the same: about $1,900 of today's dollars a month. These are ferocious benefit cuts for those at or above average incomesan across-the-board benefit cut of about one-seventh would do as much for Social Security's overall finances. But that's the point. Pozen's central aim is to keep the poorest one-third of beneficiaries from bearing any of the burden of future benefit cuts..............Pozen's proposal caps the maximum Social Security retirement benefit at roughly $22,500 dollars a year (adjusted for inflation). Bush's private-accounts planwhich would allow people to contribute 4 percent of their wagesmakes retirees repay the taxes they diverted into private accounts out of their standard Social Security benefit. Medicare premiums are already deducted from your Social Security check. Deduct the claw-back for the private-accounts diversion as well, and by late in this century the odds are thatat least for the upper middle classthe standard Social Security check would be zero. Social Security would no longer be a universal program: It would be a program in which the half of America that is richer and more powerful and more likely to vote sees large chunks of its money going in and nothing coming out.
It seems to me that through this statement, DeLong is projecting that the return on private accounts should be quite good, especially relative to the return available for middle and upper income folks in the current SS system. Here is an illustration of what I'm talking about.
Using DeLong's numbers lets say that a worker entered the workforce and was making the maximum salary subject to SS taxation. Further lets assume that our worker contributed the full 4% of her wages for a career that lasted 40 years. Finally lets make two other assumptions. First, our worker achieved no return on her investment due to a flat stock market, and upon retirement received the maximum benefit of $1,900 a month, in today's dollars which keeps the analysis simple and conservative. Oh, one more assumption; our worker's retirement effective tax rate (the rate she pays on all income after going through the various income categories) is 24%, which would put her in the top tax bracket. Here are the numbers:
90,000 * .04 = 3,600 * 40years = $144,000 saved in a private account.
Now lets assume our worker expects to live 10 years and removes $14,400 a year which is taxed at an effective rate of 24%. Her tax owed would be:
14,400 * .24 = $3,456
If this tax were taken on of the monthly SS payment it would be $288 per month. Far less than the maximum benefit of $1, 900 per month that this worker based on her income would receive. So if DeLong is to be believed, the only possible way that the tax owed on private account withdrawals could exceed the SS benefit would be if the private account had achieved excellent returns over the previous 40 years.
This is a problem?
Oh sure, you'll note that DeLong also deducts the worker's Medicare premium from the monthly SS benefit to whittle away the $1,900. This however is a mistake that clouds the argument. The premium is not a tax that the worker gets nothing in return for, it is the cost of the worker's healthcare and as such has very real value for the worker. So we cannot subtract this premium from the SS payment and make the statement that our worker ends up with zero due to private accounts.
So in conclusion, one can still be against progressive indexing and private accounts as solutions to SS on solid philosophical ground. To do so however one must also acknowledge that a problem exists, and about the only other alternative is to raise taxes. When you consider that we cannot continue to raise taxes for every social program without at some point doing serious damage to our economy, you begin to realize that there is merit to Bush's ideas.
Tuesday, May 3, 2005
There is, however, one thing that I am at a total loss to explain. When it comes to the Christian Right in this country, the left has come totally unhinged. Beyond opposing the agenda of the Christian Right, the left has gone on a scare campaign that is unlike anything I have ever seen in politics during my lifetime. Perhaps the best example of this phenomena was in the letters to the editor section of Sunday's NYT. A fevered letter writer, who I will not name, stated in part:
"If we (her husband and herself) had children, I would not want the Republicans or any of their agents telling my children what church to belong to or what beliefs to hold. The last time I looked, we were not in Iran."
Stanley Kurtz in yesterday's NRO writes further about this issue that seems to be occupying increasing amounts of the left's time and rhetoric. Feel free to follow the link over there, this is really bizarre stuff.
May I ask what in the world these folks are talking about? Lets take our letter writer above. When exactly has any Republican proposed that we should have an official religion, or an official set of beliefs? I believe the correct answer is never.
In fact, if I am not mistaken the left often accuses the Republicans of being taken over by the neocons, which has often been used as a not so subtle code word for "Jews". Further, the greatest public supporters of the new pope and the Catholic church in general have been on the conservative side of the political spectrum. This is not to say the left doesn't support these religions, or is not religious itself, but rather to make the point that before we conservatives decide what faith we'll force on folks, it might be a good idea for us to agree on one for ourselves.
Kurtz's article exposes more conspiracy writings from the left about this issue and does an excellent job at pointing out just how unhinged our liberal friends have become in some sectors. The question I have is why? If I didn't know better, I'd wonder if the CIA was starting electric Koolaid tests again (come to think of it, I don't know better).
My guess is that the real reason is because the left is becoming concerned about the real gains politically that Christian conservatives have made over the last two decades. After twenty years of pushing the U.S. to embrace secularism, which started out with a right minded desire to encourage the acceptance of all religions but somehow morphed into freedom from religion, the left is now witnessing the inevitable return of the pendulum to the center. This is of great concern to the left, because in my view they seem to believe that their strength lies in the supremacy of government and it's institutions over religions and their various beliefs.
Christian conservatives, rightly in my view, reject this fully secular approach as it de-links our law from it's religious and theological underpinnings and completes the subtle transfer of the source of human rights and liberty from a supreme being, to the Government itself. Once the Government is the ultimate source of power, those that believe in the government's righteousness - typically members of the left - have control of our lives.
So the Christian right is attempting to take back ground that they lost to the left. This is healthy for our society and religious conservatives should not be demonized because of their beliefs. They have a right to express their opinions and make their influence known through the ballot box.
All Americans would do well to remember the words of George Washington who said in his farewell address, "Religion and morality are essential props. In vain does that man claim the praise of patriotism who labors to subvert or undermine these great pillars of human happiness"
Monday, May 2, 2005
The Killers: Somebody Told Me
Steely Dan: King of the World
Dave Edmunds: Don't Talk to Me
Duncan Sheik: Barely Breathing
The O'Jays: Love Train
Bonnie Raitt: No Gettin' Over You
Matthew Sweet: Thought I Knew You
The Foundations: Build Me Up Buttercup
Nick Lowe: Cruel To Be Kind
The Lovin' Spoonful: Do You Believe In Magic?
Pixies: Monkey Gone To Heaven
Tracy Chapman: Baby I Can Hold You
Cracker: Happy Birthday
Steve Earle: Now She's Gone
I just love the shuffle feature on Itunes. I never would have put these songs together, but had a great time listening to them.
There has been a lot of debate since President Bush’s Thursday night press conference and his statement on social security. Certainly, if one truth has emerged in the following days it is the truth that only the bravest (or dumbest) of politicians will attempt to touch this issue.
As written here in the past, I believe that the behavior of the Democratic Party with regard to this issue has been particularly shameful, and in the long-run will result in their own self-marginalization before the electorate. Reasonable people can argue about the extent of the Social Security (SS) crisis, and many have. Notably, most of those arguments are exercises in foot stamping and accusations of bad faith. Missing are such mundane details as demographic assumptions, underlying worker productivity, discount rates used to calculate the funding gap, and return on alternative investments.
Without these details it is impossible to asses the extent to which SS is in trouble. I will not enter the debate about whether or not we have a “crisis” other than to say that for reasons that I hope to make clear, I am inclined to side with those who say we do. We know there is a serious funding gap as SS is currently structured, and there seems to be some agreement that the government will need to borrow an additional USD 3.7 trillion over the next 75 years. The larger question for me exists beyond solving the funding gap.
I strongly believe that this question should be addressed on a level much deeper than how our seniors will be spending their golden years. While this is important, the question of what kind retirement plan is necessary for our workforce in this century is more so. It seems obvious that we live in a world that is greatly changed from the one in which SS was initially conceived. The economy of the mid 20th century was much more structured, focused around manufacturing and the labor required to keep the machines of commerce humming. A man graduated from high school (or left the military service) found a job, and generally worked for the same firm until retirement. A defined benefit pension was not unusual and health care benefits were provided because they were viewed as a cheap, non-taxable means of additional compensation.
Today, a college education is considered the ante for entrance into the workforce of skilled jobs. Men and women graduate, join the workforce and most often continue their education with graduate degrees or some other career specific training. Virtually nobody remains at the same employer for their entire career, and many workers not only change employers, but also jump career paths as market economics dictate. Capital markets are sophisticated, resilient and increasingly efficient, the market for skilled labor is dynamic and for many positions, global. Workers are in more control of their destiny, and follow far more interesting career paths than their fathers, but are also expected to be more responsible for their well being and training.
In my view then, our Social Security system must be changed to reflect the dramatically altered landscape in which we lead our modern lives. At the same time, we cannot forget our obligations to those in our world who, for a variety of reasons, are less fortunate in their economic status. The question then is, “what would such a plan look like?”
Before addressing this question directly, certain facts must be made clear which I present without comment on their validity, morality or economic justification:
- Social Security is not a pension system: While many people realize this fact, it still cannot be stated often enough. Pension systems are funds structured to be backed by a pool of invested assets, against which all future liabilities are calculated, and solvency is maintained. SS has no such pool, nor are all of it’s future liabilities calculated on some government ledger as liabilities.
- Social Security is not insurance: Insurance is a risk sharing mechanism where premiums are paid in, a pool of invested assets is maintained against actuarial calculations of event risk, and payments are made upon the occurrence of a covered event. SS has a “trust fund” but this is only a promise to borrow in the public markets in the future or a promise for future congresses to increase taxes on future generations. SS also doesn’t pay out on event risk so much as it pays to everyone a benefit once they achieve a certain age, regardless of need.
- Social Security is a wealth transfer system: Simply put, it is the guarantee of the government to tax future generations to transfer wealth to senior citizens in an effort to ensure that seniors stay out of poverty in their later years.
- Social Security faces a long-term demographic challenge: The challenge of the funding gap is not simply a historical anomaly resulting from the wave of retiring baby boomers. It is the result of this wave plus declining birth rates, and maybe most importantly, increased longevity. In short, the problem is not short-term, it is structural, driven mostly by the fact that life expectancy is now 15 years longer than it was when the system was created. The longevity problem will most likely get worse (or better, if you want to live a while!).
- Private accounts alone will not solve the funding problem: In fact, private accounts will have the effect only of shifting government borrowing to the present in what is commonly called a debt swap.
This final point 5 is a little tricky, and not well understood in the ongoing SS debate. Typically, opponents of private accounts talk about the onerous “transition costs” of restructuring SS to include private accounts. This is misleading because the government accounting of SS is misleading – in fact it would be criminal for a private fund found to be doing the same thing.
The reason then that the talk of transition costs is misleading is because while the creation of private accounts would remove some current worker funding that goes towards paying current retiree benefits, an equal amount of future benefit liabilities to these workers would be deducted from the balance sheet in a one for one trade. The net effect is that while borrowing must necessarily increase in the short-term, it will be less by an equal amount in the long-term. This is a common mechanism used in our capital markets all the time, and is called a debt swap.
So with these facts out of the way, and hopefully agreed upon, perhaps we can address what must be done with regards to making SS solvent, and creating a retirement program for our new, educated, mobile and highly skilled 21st century workforce, while maintaining a safety net for those less fortunate. As I see it, and I’m open to other ideas, we are constrained to only a few options:
- Do Nothing: Always an option, the Do Nothing approach, while often attractive in a passive aggressive sense, will only serve to push the problem to future generations.
- Raise Taxes: Raising taxes would solve the funding problem, but are not politically popular, are not progressive, and would be a drag on economic growth. Further, raising SS taxes, increases the marginal cost of workers to their employer which would decrease the velocity with which our system allocates workers.
- Cut Benefits: This is difficult to do fairly, and would most likely require cuts through most economic classes to achieve the necessary affect.
- Raise Retirement Age: This would get after the source of our real underlying problem, and would remove the concern that SS in many cases is funding a leisure class and not simply providing economic security, but in unpopular.
- Cut Other Government Spending: Good luck.
I’ve presented the options above complete with each reason on why we shouldn’t follow them because I believe this is how each will be met in the marketplace of ideas. None-the-less, we need to do one, or some combination, of all of the above. For what it is worth, I think 1 and 2 are not rational solutions to our funding problem. As stated before, doing nothing really doesn’t seem to be an option. Raising taxes is, in my view, a fool’s game disconnected from reality. We’ve tried this solution in the past when the trust fund was created, and regardless of how real you believe the trust fund is, there can be no argument that the additional revenue was used, by both parties, to fund current spending on non-SS programs. Fool me once, you’re an ass, fool me twice, I’m a ass.
So realistically I think we’re looking at some combination of reducing benefits and raising the retirement age. The retirement age increase is particularly attractive since this is the one variable that has most adversely effected the solvency of the system since it’s establishment. Cutting benefits is attractive since we can achieve the needed benefit by cutting the growth of benefits, not the level of benefits.
Cutting the growth of benefits, while a reduction of overall benefits from the current system, can only be called a “cut” in terms of Washington speak. As most proponents of this approach have suggested, the growth rate of benefits should be tied to the rate of inflation, instead of the growth rate of wages as they currently are set. This change alone, while small in the short-run, is significant in the long-run and can have a large impact on reducing the funding gap. Further, by de-linking benefits growth from wage growth we can achieve another benefit that has not been widely discussed – the benefit of productivity growth. Wages typically grow faster than inflation because of productivity growth in the application of labor. One of the great stories of the last few decades has been the rate at which the productivity of the American workforce has grown. If this trend is to continue, then once we re-set benefit growth to the inflation rate, we will provide our younger workers with the chance to work out of the funding gap problem in part by advances in their productivity.
As we’ve seen from the response to President Bush’s Thursday evening comments, there will be objections to the cutting of the rate of growth of benefits for retirees. This is a real issue, and should be thoughtfully addressed, which is where personal accounts enter the picture.
As I’ve demonstrated above, personal accounts have no transition cost associated with them; instead they move borrowing to the present, while reducing future SS liabilities. With this in mind then, we can consider how personal accounts can comprise a powerful component of SS reform.
As traditionally proposed, personal accounts would be established by allocating some portion of a worker’s current SS contributions into the PA. The accounts would be invested in a conservative mix of high quality debt and equity vehicles and rebalanced annually to maintain appropriate asset allocation.
Under this structure, it is virtually certain that personal accounts would provide a better return to the retiree, than if the same amount of money had gone into the SS system. In a world with reduced benefit growth, there is a good chance that personal accounts would fill in this gap and possibly exceed it providing a more lucrative benefit than even under the current system assuming it was solvent. President Bush talks about the benefits of ownership and the ability to pass accounts between generations which only add to the appeal of these accounts.
While I’m sure we haven’t achieved a perfect formulation yet, I am convinced that something akin to what I’ve described here is inevitable. Politically, I think the president captured some of the Democrat’s ground on Thursday, with his proposal for indexing and it will be interesting to see how long it takes Poor Dim Harry and Nancy P to realize this fact. It is quite interesting that he has followed the advice of a prominent Democrat to make his most recent recommendations.
Hopefully this begins to shed a little light on why I’m more inclined to support the president’s proposal for benefit cuts and PA’s than not. I would go a step further and include an increase in the retirement age beyond those already scheduled. This addition would address the root of our problem and also allow us to be more generous in benefit growth for the middle class.
Any thoughts folks?