75 Years Later, Social Security Is Still America’s Core Domestic Program

The Campaign for America’s Future holds its annual conference, this year titled America’s Future Now!, June 7-9 at the Omni Shoreham Hotel in Washington. The politics of Social Security runs like a thread through the entire agenda.

The titles of the various sessions tell the story.

“The Great Debate: Progressive Strategy in the Obama Era.” With its deficit commission, the administration is precipitating a new face-off within the Democratic Party over Social Security “reform”: Continue reading 75 Years Later, Social Security Is Still America’s Core Domestic Program

“Understanding the Crash” online

You wouldn’t expect an international financial crisis to have its origins in a modest home in a working-class neighborhood of Cleveland. But it did. Here, in words and pictures, is how it happened.

Publishers Weekly has posted a chapter from Understanding the Crash (Soft Skull Press), the new graphic non-fiction book I’ve coauthored with Seth Tobocman and Jessica Wehrle. It explains how low-income communities became a gold mine for subprime mortgage lenders, and what happened to the people in these neighborhoods after dubious mortgages started to blow up in their faces.

Other chapters detail that financial house-of-cards that Wall Street built atop the housing bubble, how the bailout that followed the bubble’s collapse favored banks over people, and suggests what needs to be done to recreate a financial system that serves people and communities, not speculators.

Cato Premieres Its Latest Horror Show

Jagadeesh Gokhale is back with a new book laying out a fresh doomsday scenario for Social Security. But before dipping into the Cato Institute scholar’s (and Bush appointee to the Social Security Advisory Board) latest research-and-destroy mission, it’s useful to have a look at his past record as a budget analyst and champion of a dubious “present value” accounting measure.

In August 2003, Joe Lieberman, then in the early stages of launching a presidential bid, wrote a letter to Treasury Secretary John Snow in which he accused the administration of “stripping out” from its 2004 budget the findings of an internal Treasury paper that Snow’s predecessor Paul O’Neill had ordered up. Attempting to stake out a position as the toughest of the deficit hawks, Lieberman suggested that “this administration is trying to hide the true nature of our financial obligations from the American people in order to advance its agenda of cutting taxes indiscriminately.”

The paper was written by Gokhale, then at the Cleveland Fed, and Kent Smetters, Continue reading Cato Premieres Its Latest Horror Show

Retirement Calculators Critiqued

Columnist Mark Miller says on-line retirement calculators can be a minefield of misinformation: especially if you want a reasonable estimate of how your Social Security benefits will build up over time.

The People’s Pension doesn’t often delve into matters of personal finance. But syndicated columnist Mark Miller, to whose blog and website, RetirementRevised.com, we happily link, recently wrote a valuable piece for Moneywatch on retirement calculators: the plug-and-play on-line software that seemingly every financial services provider offers these days.

We’re interested partly because Social Security is one of the assets these calculators use to tell you whether you’ve got enough coming to you to retire on. And, incidentally, Continue reading Retirement Calculators Critiqued

‘Understanding the Crash’ Made Easy … Well, Easier

Understanding the Crash (Soft Skull Press) starts with a simple question that still haunts us all: What has happened to the world economy?
Along with Seth Tobocman and Jessica Wehrle, I’ve co-authored a new book that explains how a housing bubble could build up and burst, triggering massive foreclosures, 10% unemployment, and a global recession. We take a concise, Continue reading ‘Understanding the Crash’ Made Easy … Well, Easier

The High Cost of Privatization

If Social Security was carved into a system of private accounts, how much would it cost the worker who depends on those accounts for his or her retirement? Too much.

There’s a ton of news relating to the fate of social insurance, in the U.S. and worldwide: the Greek debt crisis, the Obama deficit commission, health care reform. But give a few moments’ thought to Jones v. Harris, the March 30 Supreme Court decision on mutual fund fees. You can start with Jeff Sommer’s excellent review of the topic in the New York Times.

Most money that goes into 401(k) plans, IRAs, and other retirement saving accounts actually goes into mutual funds. Almost certainly, mutual funds would be the main vehicle for investing part of your payroll tax should Social Security privatization ever come about. So it makes sense to look at the record mutual fund providers have compiled as stewards of retirement: and the Supreme Court’s recent judgment in the matter.

Continue reading The High Cost of Privatization

The “Progressive” Road to Poverty

“Progressive indexing,” an idea that failed to rescue Bush’s doomed privatization campaign five years ago, is again the Flavor of the Month for Washington’s deficit hawks.

Arguably, Steny Hoyer wouldn’t be House Majority Leader today if George W. Bush hadn’t made the fatal error of staking his second term as president on privatizing Social Security. “We miscalculated,” Bush’s consigliere, Karl Rove, admits in his recently published memoir. That miscalculation was so bad it cost the Republicans control of Congress a year later and then, in 2008, the White House.

So it was a mite strange to see Hoyer, in the pages of the Wall Street Journal, suggesting that President Obama’s National Commission on Fiscal Responsibility and Reform unbury one of the stillborn proposals that failed to stem the Bush debacle of 2005: progressive indexing.

“When it comes to entitlement spending,” Hoyer writes, Continue reading The “Progressive” Road to Poverty