Every so often, the mainstream media anoints a new public intellectual—the big thinker who explains it all to us in newspaper or Internet columns, bestselling books, or on the Sunday morning chat shows. Sometimes they’re genuinely quite smart and insightful (Paul Krugman, Malcolm Gladwell), sometimes otherwise (David Brooks, anybody?).

The hottest new public intellectual may be Evgeny Morozov, a not-yet-30 scholar who has published two well-received debunking books, The Net Delusion, about the notion that the Internet promotes democracy; and To Save Everything, Click Here: The Folly of Technological Solutionism, a broader-ranging attack on the belief that smart technologies and Big Data are the ultimate problem solvers.

Both books are needed antidotes to the grandiose claims being made for technology, and To Save Everything, in particular, is of vital importance to anyone concerned about the direction of public discourse on the looming retirement crisis in America. If you only have a few minutes, read a March New York Times column by Morozov himself, and then a recent interview with him on thedailybeast.com.

Morozov has two closely related concerns about the kind of technological utopianism that’s building up around concepts like Big Data. In both cases, the problem isn’t the tools themselves, but the way their promoters attempt to use them to channel our thinking about a range of personal and societal issues. “Take the recent obsession with self-tracking,” tools that enable us to monitor just about everything we do, from our sleep patterns to the food we eat to our retirement portfolios, and translate the data into a disciplinary regime.

By offloading the responsibility for problem solving from governments to citizens, self-tracking can get us to optimize our behavior within the constraints of an existing system. What we need is a chance to reform the system itself—perhaps by dismantling those constraints. Ambitious reforms like regulating the food industry and building the infrastructure needed to get good food to hungry people shouldn’t lose their relevance in the era of universal self-tracking.

There’s nothing inherently wrong with keeping track of one’s financial assets, for instance, in an effort to plan and save for retirement. But often an ideological purpose lies behind the empowerment rhetoric. Says Morozov,

Many trendy technologies can not only hinder needed reforms but actually also entrench social iniquities. Consider the current enthusiasm for Big Data, with its ability to yield powerful insights based on correlations alone. According to one recent tome on the subject, once we fully embrace Big Data, “society will need to shed some of its obsession for causality in exchange for simple correlations: not knowing why but only what.”

That viewpoint manifests itself in recent comments by deficit hawks like Erskine Bowles, who don’t seem to care that the causation that the Rogoff-Reinhart research on government deficits and GDP seemed to prove, has been debunked. As long as a slender thread of correlation remains, that’s all that anyone needs anymore, it seems. Consider, also, a quote that UK financial blogger Helaine Oren obtained from an official at Penn State, asking him whether a college-level financial education program was really sufficient to rescue undergraduates from the debt-crippled future they face once they’ve entered the workforce. Said the official:

Financial literacy helps students to treat education as an investment in their future. The real problem is not the rising cost of education, it is in the lack of financial planning and lack of financial literacy skills of making sound financial decisions.

So what if the problem—in this case, a broken system of financing college education—wasn’t caused by us? Only we can solve it. And we certainly will, if we just embrace the tools the financial services industry—or the pharmaceuticals industry, or the computer industry—is offering us. Stop looking for someone to blame. Even if someone else is to blame.

We hear the same thing so often nowadays that addressing it every time it crops up would be exhausting—in fact, Morozov is really only highlighting the most recent, high-tech means of achieving the same kind of thought conditioning that’s been conducted for years in other formats. Here’s the blithe conclusion of a recent column by Megan McArdle in the selfsame dailybeast.com, attacking the idea that we should consider making Social Security more generous as a way to compensate for the loss of other sources of retirement income:

I’m not sure I see a strong case here for taking even more money from young people and transferring it to people who decided not to save enough.

Who says they “decided” not to save enough? But again, that’s the point: Stop thinking about causation, and get on with it. As Morozov notes,

There is this very bizarre way in which the abstract categories we are trying to analyze dumb down our debate. Because we no longer pay attention to the things that matter. Which, to me, all boils down to business models, political economy, notions of the self, notions of collective action, notions of public debate that are embedded in these technologies. And instead we engage in highly abstract debates about “Internet culture” and “the Net,” finding coherence where, frankly, there is no coherence whatsoever.

Except for this: “The onus for reform on the individual.” And the tools are there, if we’ll only pick them up and use them.

When it comes to saving, the financial services industry has plenty of tools to offer—online portfolio trackers, tutorials, fee-based research databases, and advice in as many forms as Congress will (increasingly) allow it to lay out. One of these is the aforementioned financial literacy movement, whether in its online or classroom forms. Across the country, school systems are mandating courses in personal finance in the expectation that they can yield up a generation of savvy, self-starting savers and investors, liberated from dependence on programs like Social Security for their long-term income security. The end-result—quite incidentally, I’m sure—would be an end to class conflict and the advent of the “investor society” that Karl Rove once envisioned as cementing the Republican Party in power for decades to come.

A recent Harvard Business School study found all this to be bunk. Mandated high-school personal finance courses, it concluded, have no impact on credit management outcomes, including credit scores, credit card delinquencies, or the probability of declaring bankruptcy or experiencing foreclosure. Nor did these mandates have a detectable effect on total financial assets or real estate equity.

(The study did find that there was one additional high school course that matched up closely with better results in three of these areas—greater accumulation of assets, lower probability of bankruptcy and foreclosure, and increased real estate equity. It was a math course.)

“Financial literacy or capability or whatever you want to call it,” Oren concludes in her blogpost,

is a bunch of hooey. It promotes the false equivalence that the victims of the financial shenanigans of the past several years are as responsible for the financial crisis as the financial services sector, the ultimate creator of all those financial products of mass destruction.

Smart technology and Big Data may only be the latest means of dampening people’s capacity for critical thinking, but they are undoubtedly a terrifically powerful addition. “What also troubles me a lot,” says Morozov,

is that, increasingly, as technology companies in Silicon Valley accumulate too much data about us, and they more or less mediate our every interaction with the world, a lot of policymakers will say “why should we bother with this macro-level reform to begin with, if we can just outsource all of these reforms to Google and Facebook.” … There is this complete disregard of important social questions like privacy when companies like Google experiment with new services like Google Buzz or, you know, Google Street View. As Mark Zuckerberg once put it, their mission is to break things and then think about consequences later.

That could also be the mantra of the retirement arm of the financial services industry, if the recent PBS investigation, “The Retirement Gamble,” is to be believed. For almost 20 years, the industry has been selling itself as the central pillar of the new, self-driven American retirement system. The results have not been encouraging. But if “causation” doesn’t matter anymore, who’s to know that there’s any alternative?

A lot has already been written about President Obama’s proposal to switch to the chained CPI for annual adjustments to Social Security (and many other) benefits. I hope you haven’t reached your limit on the subject, because I want to urge to read just one more, from last month. It’s FDL blogger Masaccio’s vital and bluntly titled piece, “Chained CPI Means You Can’t Have Nice Things.”

Masaccio, who’s been writing valuable economic commentary for years that all us non-professionals can easily understand, starts with a closer examination of the “substitution” concept behind the chained CPI, and then makes some provocative suggestions about what this all means—specifically, the end of the consumer-driven economy and the managing-down of the American standard of living.

Let’s start with the first point. As has been noted endlessly, proponents of the chained CPI assert that the standard Consumer Price Index has been getting it wrong all these years because higher prices don’t necessarily mean that the cost of living has risen. Because when the cost of USDA prime beef goes up, for example, people can chicken instead. Prices change all the time, and people make these substitutions accordingly. Next week, the direction may reverse and we’ll all be dining on sirloin again.

There are two problems with this, according to masaccio. First, people don’t just switch back and forth. Sometimes those switches become permanent.

There is an unspoken connection here: that your income is constant across all these time periods. That isn’t true either. People are losing their jobs and taking lower paid jobs. If you are still getting raises, they come in tiny increments every year. If you are retired, you get nothing on your savings, and little on any equities you might hold. To maintain your standard of living, you have to eat your savings or go into debt. Most likely, you can’t have nice things, so you get to substitute less nice things. No natural fibers for you, too expensive. So what? Just substitute something you don’t like as well, or do without.

So what does “substitution” look like in this era of steadily declining real wages and a burgeoning retirement crisis? According to the theory,

if beef gets more expensive, you can substitute pork, without in any way affecting your life. In other words, the selections among beef, pork, chicken and catfood you currently make are assumed to give you a certain level of pleasure, but now you can’t have that level of pleasure. Either you eat less of something you like, or you just don’t get to eat it, and have to eat something you don’t like as much.

So maybe the Bureau of Labor Statistics hasn’t gotten around yet to declaring catfood an acceptable substitution for chicken. But the BLS will surely get there (it contains chicken, doesn’t it?). This brings up the second problem with the chained CPI—the dynamic is all moving in the same direction. People outside the 1% aren’t just being smart consumers, shuttling back and forth in a rational effort to optimize their dollars. They’re being gradually pushed out of the middle-class portion of the market by dimming economic prospects, into the lower end. They’re experiencing a drop in their standard of living. The chained CPI tells them this is the wrong way to look at it—they were getting too good a deal before, which encouraged them not to make rational choices. The appropriate living standard—for retirees, the disabled, children who’ve lost working parents—is one that trends increasingly downward.

Masaccio makes a further point that I haven’t seen mentioned elsewhere—that we never had that much choice to begin with. It’s been widely noted that chained CPI is not an appropriate measure for elder benefits, because the elderly are disproportionately large consumers of health care goods and services, for which there are fewer substitutions to be made. But younger working people, too, face more of these my-way-or-the-highway dilemmas as well. The chained CPI

ignores the effect of substitution in oligopolistic markets. What is the free market for cell phone services or cable services? They are oligopolies. Your choices have nothing to do with the amount produced. Prices are not set based on the underlying cost of service, but upon whatever these people can get away with. They raise prices to maintain their profits. Your only substitution is to buy less service, in a downward spiral. Your life gets worse.

What it all amounts to, masaccio tells us, is “an outright admission of the utter failure of the consumption society,” and an introduction by “the president and the oligarchy” to “their Brave New World of not-so-nice things. Or nothing at all.”

There’s a lot packed into those few words: The end of the post-Henry Ford model of the middle class American economy that consumes what it makes in a self-perpetuating cycle of upward mobility. The advent of an increasingly hand-to-mouth economy in which working people learn to make do with less … and less. The continued splitting-off of the elite from the working population, since the “feral rich” never have to substitute for anything. A convenient rationale for the U.S. political and economic elite not to worry about such things, because, hey, it’s all optimized, man.

The chained CPI is perhaps the first—at least the most blatant—attempt to write the acceptance of downward mobility into the rules of economic management. Its adoption by the Washington consensus—the knee-jerk assumption in nearly every mainstream media account that the CPI must be overstated, that some kind of downward correction is needed—underscores the inability of the elite to comprehend, let along act upon, the worsening situation of working people. We are entering a new economic reality, in which the people in charge don’t believe these imbalances need to be corrected—only finessed, at which they are very good.

The election of Barak Obama was supposed to be working Americans’ best chance in more than 40 years to bring about the needed adjustments. Instead, we are getting the chained CPI. This is not just a question of bad economics, but of whether the two-and-a-quarter-century-old American political system has lost all remaining ability to work for anyone but the 1%.

(Note: For the first time, a Democratic president has just launched a proposal to cut Social Security benefits. This is quite momentous and I’m not ignoring it. But please keep in mind that the history of this program is complex and operates on many levels. I’m highlighting this in the p[resent post. I’ll have more to say on Obama’s historic move soon.)

The Social Security Act was a huge bill, cobbled together in an astonishingly short period of time, and yet it was the culmination of nearly 30 years of thinking about social insurance and the role of government by an ideologically disparate army of scholars, social workers, economists, politicians, lawyers, and actuaries. The whole story of how it came about has still not been written.

Tani, in the Yale Law Journal, asks whether the Social Security Act wasn’t at least partly an exercise in nation-building. Among other things, it created the first national “welfare” bureaucracy in American history. It gave ordinary people a focal point for feelings of personal loyalty to the federal government—still a very new thing in the 1930s, when most Americans felt personal ties mainly to their local communities or states. Tani also suggests that the FDR administration used the “language of rights” to do this.

It’s not a far-fetched interpretation. Bismarck was quite explicit that the series of social insurance schemes that Germany introduced in the 1880s-90s were intended to cement working-class support for the modern state-capitalist structure that was coming into being at the time. Why is it that this was OK then, but causes discomfort for some of us today? To find out more, read my article about Tani’s paper—which I understand she’s now expanding into a book—at History News Network.

Since his reelection, the president has been trying hard to have it both ways when it comes to Social Security and Medicare. According to the Huffington Post’s Sabrina Siddiqui, Obama on March 14 assured House Democrats that he won’t “slash” the two programs – moments after a meeting with Senate Republicans at which he reaffirmed his commitment to “reforming” entitlements, including adopting the chained CPI for calculating Social Security and Medicare.

Knowing it was poison to his constituency, Obama had more or less avoided the subject on the campaign trail last year. And as the New Yorker’s Hendrick Hertzberg points out, he never even mentioned the term “entitlements” in his inaugural address, instead declaring that Medicare and Social Security “do not make us a nation of takers; they free us to take the risks that make our country great.”

“Entitlement” has become an extraordinarily powerful word in the Washington lexicon. “An entitlement society,” presidential candidate Mitt Romney said in December 2011, when his campaign was taking off, “is a fundamental corruption of the American spirit.” But is Obama buying into a Republican agenda when he declares his support for entitlement “reform”?

Not at all. The first Democratic president to call attention to the alleged pampering of Social Security and Medicare recipients at the expense of everyone else was Jimmy Carter. Elite efforts to disparage these programs as the unfair plunder of an “entitled” few also date from the Carter administration, and have always had a strong bipartisan profile.

No one knows exactly when “entitlement” became the catchall term for programs like Social Security, Medicare, and unemployment insurance.  But, according to the American Enterprise Institute’s Norman Ornstein, Ronald Reagan was the first president to refer to Social Security and Medicare as “entitlements,” during the first year of his first administration. In a 1993  article for the Wall Street Journal, Ornstein noted that Reagan no longer wanted to refer to Social Security as part of a “safety net,” as he had done during his campaign,” and that “one Reagan adviser has suggested that Mr. Reagan was tired of getting beaten up every time he mentioned Social Security, and wanted a broader and more neutral term to use.” The new terminology quickly caught on.

“Perhaps President Reagan chose to call the public services he disliked by a new name simply for convenience,” Hertzberg writes. “’Entitlements’ is a syllable shorter than ‘social insurance.’” Not everyone agrees, necessarily. Barbara Boyle Torrey, a budget analyst who played a part in changing Washington’s thinking  on safety-net programs, suggested to me that Reagan might have been prompted by the fact that “uncontrollable” is “not too precise a term.”

But while the ongoing war against Social Security didn’t start until the Reagan years, it was in the 1970s — the decade of the property tax rebellion, of fiscal revolution in Washington, and of the first major crisis in Social Security funding – that establishment anger at entitlements was born. Hertzberg notes that the word first emerged as official terminology in the 1974 Budget Act, which defined entitlements – vaguely – as “payments to persons or governments who meet the requirements established by laws.” Around the same time, as Hertzberg notes, conservative scholars Robert Nisbet and Robert Nozick were beginning to complain in print about the evils of a society dependent on entitlements, which they associated with egalitarianism and redistributionism.

The complaints against entitlements began to gather substance, however, with the appearance of a study that Torrey, then at the Office of Management and Budget, made in 1975 on the effect of demographic change on the federal budget. “Nobody actually asked for it,” Torrey said later. “I just did it because I thought somebody should.” She calculated that 40% of budget outlays were for age-specific entitlements. Later, in the final year of the Carter administration, OMB officials were intrigued by Torrey’s work and asked her to conduct another, more formal study. This one was included as a section of Carter’s federal budget for fiscal year 1980, portions of which appeared shortly thereafter in the Washington
Post and then in other publications.

The addition to the budget was no accident; Carter was still licking his wounds from having been forced to abandon a proposal to cut Social Security benefits the previous year. Soon, Social Security critics were asking why the elderly were “entitled” to what seemed like a disproportionate share of federal spending (generally ignoring the fact that the bulk of expenditures on the young are made at the state and local levels). Quickly, this made its way into a thoroughgoing fiscal and economic critique.

In June 1980, as the Carter-Reagan contest was locking in, Business Week published a special issue—almost a manifesto—calling for a “new social contract” between business, labor, and government, which would facilitate the “reindustrialization of America.” A list of “attitudes” that supposedly undermined economic growth included “the notion of entitlement, a new definition of equality that called upon government to level economic and social disparities, an adversary stance toward government and business, and changed motivations toward work.” The magazine also called for “a decade of belt-tightening” by American workers and consumers.

By the time Reagan began lumping together Social Security and Medicare as entitlements, then, the term was already well established as shorthand not only for the programs themselves but the supposedly selfish people who collected from them, and the economic crisis they were supposedly creating. This was not exclusively a conservative effort, but one that the Republican right and the Democratic center-right collaborated on. For the former it was a convenient way to slander the idea of social insurance – a concept they had never accepted as morally legitimate. For the latter, reforming entitlements became a signature issue in the ongoing effort to please the wealthy, deficit-phobic donors on whom centrist Dems increasingly leaned for financial support.

Thus did the emergence of the entitlement meme mark the beginning of a new era in American politics – an era in which Barak Obama has been one of the more successful players.

It’s not news that you can’t mention the words “tax increase” in Washington without someone attaching an epithet like “job-killing” or “politically unpopular” to them as a matter of reflex. This goes for the payroll taxes that fund Social Security as for any other tax. House Budget Committee chair Paul Ryan says in his fiscal 2014 budget resolution (which just passed the Republican-dominated House.

To maintain [Social Security] benefits for future retirees, the federal government would have to raise payroll taxes to crushing levels…. By 2030, each worker will be paying for nearly half of the benefit for a current retiree. That would represent a massive shift of wealth from younger families to Social Security recipients. No economy would grow under such a heavy tax burden.

Is this true? Let’s look at the record. The last time Social Security was significantly revised, in 1983, it actually had to be rescued from the imminent tapping out of its trust fund. This was done largely by speeding up an already scheduled hike in payroll taxes. (There were other elements involved, but that was the key item.) Today, to put the Social Security actuaries’ long-term projections back in balance for the next 75 years, would require hiking the combined tax for employers and employees from 12.4% to 14.4%.

This is relatively minor—the tax was originally set at 2% each for employer and employee and it took nearly 50 years for Congress to raise it to 6.2% for each, where it’s stood now for the better part of 30 years. Since Americans’ relative affluence increased massively during the intervening decades, it’s safe to say that the increase was relatively painless. The benefits that Social Security provides in exchange-old age, disability, and survivors’ benefits—were, of course, much appreciated. So why can’t we do it again?

The answer is purely political, and it goes back to the Carter years, when a Democratic administration decided to pursue a major capital gains tax cut. That was a major shift in U.S. fiscal and economic policy, ushering in the era we’re still living through. Not to be outdone, the succeeding (Republican) Reagan White House pursued an even larger raft of tax cuts aimed at benefiting the affluent. More followed, including another capital gains cut under Bill Clinton and of course the massive Bush tax cuts, most of which were locked in place, in true bipartisan fashion, by the Obama administration at the end of last year.

Payroll taxes were part of the trend as well: The percentage of income that’s subject to payroll tax rises each year to keep pace with average wages, but because the earnings of the ultra-rich have gone up so fast in recent decades, less and less of total income is included – some 80% today, versus 90% in the 1980s. This represents such a windfall that raising the cap on earnings subject to payroll tax to restore that 90% level would eliminate a substantial chunk of Social Security’s projected long-term fiscal imbalance.

But that’s just not going to happen, say critics – not to mention enemies – of Social Security. Americans hate taxes. They are already too highly taxed, and they won’t take it anymore. And they’re mad as hell.

Isabel Sawhill of the Brookings Institution – a sort of Rosa Luxemburg of the center-right deficit hawks – and Harry Holzer of Georgetown University recently used the pages of the Washington Post to denounce Democrats for “not proposing more specific cuts to entitlements.” By not doing so, the party that created Social Security and Medicare “have forfeited the high ground and allowed a small but critical set of programs [meaning non-entitlement, discretionary spending] to absorb all of the pain” of deficit reduction.

Why does Social Security’s contribution to deficit reduction have to take the form of “specific cuts” to the program, rather than some combination of raising the cap and a small, gradual, across-the-board increase in the payroll tax? Here’s what Holzer and Sawhill say, and what they claim the consequences would be of failing to cut benefits:

Given that Americans have always resisted paying high taxes – and we see little sign of that viewpoint changing – what will happen to other priorities as our spending on retirement programs soars? Even as revenue rises, how can we possibly begin to fund the investments – in early-childhood health and education programs, K-12 reforms, effective workforce policies, improvements to crumbling infrastructure and the advancement of science – that are so badly needed to generate broadly shared economic growth? For how long will we continue to sacrifice investments in our nation’s children and youth as well as its future productivity, to spend more and more on the aged?

But this pumped-up nightmare scenario is built on a fantasy. What Americans are Sawhill and Holzer talking about who “always” resist tax hikes? My research for The People’s Pension uncovered polls extending all the way back to the mid-19070s in which comfortable majorities of Americans consistently agree that they would be willing to contribute more in payroll taxes if this would keep their Social Security safe.

The latest such, released in January by the National Academy of Social Insurance, found 74% of Republicans and 88% of Democrats agreeing that “it is critical to preserve Social Security even if it means increasing Social Security taxes paid by working Americans.” Majorities supported the idea of gradually raising the cap over 10 years and, over 20 years, raising the Social Security payroll tax across the board for employers and employees from 12.4% to 14.4%.”

Why would American want to endure such a heavy, economy-crushing tax burden, as Paul Ryan portrays it? Because they judge the additional burden to be not that great, and the benefits – in our era of disappearing pensions and vanishing home equity – still well worth it. The NASI estimated that the increase would be so gradual that a worker making $50,000 a year would pay about 50 cents a week more each year, and the employer the same.

No matter how NASI sliced the results – Democrat, Republican, independent, Tea Party – support for higher payroll taxes remained solid. The rabidly anti-tax American public of Holzer and Sawhill’s imagination does not exit. The crushing tax burden that Paul Ryan prophesies should payroll tax rates be raised, is nothing of the kind. These fantasies are quite vividly alive in Washington, however, where the focal point of mainstream politics is to perpetuate the low-tax regime that the affluent have been putting in place since the Carter years. Perhaps this answers the question who Holzer and Sawhill, longtime Beltway denizens, are referring to when they talk about tax-averse “Americans.”

Payroll taxes are a relatively small burden on the 1%. But increasingly, in the eyes of America’s wealthy, no tax is too small to be acceptable. It all adds up. Given the fact that the U.S. population is aging, and other expenditures on the elderly – for health care, for long-term care, for housing – are likely to rise as well in future decades, it’s imperative that the burden be shifted from programs that pool the expense, like Social Security, onto individual households.

Otherwise, the elderly will become a driver of higher taxes in the future – taxes that, as suggested by the deal that ended the recent fiscal-cliff crisis, will be more likely to fall on the well-off. That wouldn’t please the well-heeled sorts who patronize lawmakers like Ryan and think-tankers like Sawhill; thus the drive to turn right-wing political positions on entitlements into prophecies of doom and sell them as non-ideological facts.

Of course, American voters could ignore all this and insist that their representatives raise the cap, gradually raise the payroll tax across the board, and get on with it. This approach has ensured that Social Security keeps its promises thus far; there’s no reason it can’t keep right on doing so.

NOTE: As is surely evident to some of you, this is my first new blogpost since last summer. Oddly, promoting the launch of The People’s Pension: The Struggle to Defend Social Security Since Reagan, has taken up a lot of the time I normally would have devoted to blogging. (The book is doing well, by the way – now in its second printing. You can follow its progress on The People’s Pension Facebook page.) Social Security is still balanced on a knife-edge in Washington this year, to say the least, and so I hope to be able to post more frequently in the coming months.

Today’s New York Times includes a fine column by David Carr, taking the mainstream sports media to task as not-to-silent partners in the selling of the Lance Armstrong Legend. Carr gives the sports desk a good spanking. But the problem he describes is actually much bigger, extending deep into the business and economic coverage that is arguably the most critically important information we get from the media nowadays

Let’s review a bit of history. Back in the late 1990s, the dot.com bubble, financial deregulation, and accounting scandals at high-flying companies like Enron and Worldcom combined to generate a house of cards that collapsed early in the following decade, taking the economy with it. Much of this was quite foreseeable, and indeed was flagged by many out-of-the-mainstream journalists and economists. But not by the corporate business press, which fell heavily for the line, propagated by Federal Reserve Chair Alan Greenspan among others, that we now lived in a “new economy” where the old ways of valuing companies no longer applied. Fortune magazine, for example, named Enron “America’s Most Innovative Company” six years in a row.

Hard to understand in retrospect, these derelictions made total sense at the time. As Carr explains in the slightly different context of Armstrong and big-time bicycle racing,

There was a heroic narrative to be nurtured, and mainstream reporters pretty much stuck to the script — either because they were invested in the legend or were worried about maintaining access to one of the most important figures in sports.

A legend, he might have added, that the media helped create. In a not dissimilar manner did the business press tout the story of the “new economy” and turn hacks like Enron CEO Ken Lay into “maverick” symbols of American success.

Rather than learn their lesson, the business press fell into the same trap less than a decade later. Prominent reporters largely bought the line that there either was no housing bubble, or that (take your pick!) detecting the existence of one was too hard and therefore shouldn’t be attempted. They failed to comprehend the dangerous levels of risk being spread by complex mortgage-backed securities, preferring to believe what their most highly-placed sources told them: that spreading risk around the investor universe would somehow lower the level of risk for everyone. In fact, it created a contagion.

Perhaps the most delicious example of this refusal to grapple with reality was a column that the bestselling and much-lauded Michael Lewis wrote for Bloomberg.com in January 2007, reporting from the annual World Economic Forum junket in Davos, Switzerland. Scoffing at the idea that the markets may be mispricing some forms of risk, or that financial derivatives might have inherent dangers, Lewis blandly concluded, “The most striking thing about the growing derivatives markets is the stability that has come with them.”

Lewis was just coming off the success of his inspirational football book, The Blind Side. Rather than being taken down a peg as a result of his embarrassing Bloomberg column, however, he parlayed the subsequent crash of the housing markets and much of Wall Street into another inspirational bestseller, The Big Short, which celebrated a group of short-sellers who had managed to profit from the disaster. The book also helped Lewis to cover his own tracks, implying strongly at every turn that predicting a crash took sheer genius of the kind only his subjects possessed. In fact, plenty of economists – Dean Baker at the Center for Economic and Policy Research, for one – had been warning for years and as loudly as possible about the overextended housing market. The business press, perhaps for the reasons Carr enumerates, simply weren’t listening.

In somewhat the same way, the Armstrong doping story festered for years, kept alive by a small group of non-journalists and cycling enthusiasts, notably the team behind NYVelocity, a racing blog. Carr offers this telling quote from Betsy Andreu, the wife of a former Armstrong teammate:

Not every single person in the mainstream media bought the [Armstrong myth], many did good work, but many just went along out of fear or self-interest. The beauty of NYVelocity is that they knew the sport, knew the reality, and they were not beholden to any advertisers and the powers in the sport. They weren’t afraid to print the truth.

Much of the subsequent coverage in the corporate sports media – the details of the doping ring, the actions taken against Armstrong, etc. – should be read with a large grain of salt. These are the same publications, and in many cases the same writers and editors, who treated the allegations of Armstrong’s rule-breaking as a non-story for years. The same, of course, is true of Michael Lewis and his fellow big-foot financial journalists.

In February 2009, when the world was still processing the shock of the Wall Street catastrophe, the Columbia Journalism Review ran a story, titled “No Prizes For Post-Mortems,” by two veteran financial reporters, Phillip L. Zweig and Stephen P. Pizzo. Noting the plethora of stories reporting the collapse as it happened and then retracing the history that led up to it, Zweig and Pizzo wondered where these intrepid reporters were during the years when the crisis was brewing.

Their post-mortems with their condemnations of the failures of others — regulators, bankers, politicians corrupted by industry favors — to our ears ring hollow since they invariably fail to explore even the possibility that the business press itself failed in its main job: to adequately warn the public of the abuses and dangers mounting on its main beats. In our opinion, credit standards over the last decade deteriorated to disastrous levels at least in part because of the decline in journalistic standards over the same period.

The title of Zweig and Pizzo’s article suggested strongly that perhaps some categories of the Pulitzer Prizes should not have been given out in 2009. The post-mortems, however thorough and well-researched, didn’t make up in any way for the press’s failure to take an interest when the largest speculative bubble in history was putting the global economy in harm’s way. More than that, the reporters and editors who missed the boat deserved a generous measure of blame for the disaster themselves.

Instead, the Pulitzer committee handed its Public Service prize to The New York Times “for its comprehensive coverage of the economic meltdown of 2008.” Worse, the following year the Pulitzer for Investigative Reporting went to a McClatchy Newspapers team, “for their examination of the nation’s financial collapse and notably on the involvement of Goldman Sachs” – never mind that by 2010 this was, in financial markets time, the equivalent of archeology. Useful excavation, certainly, but nothing like the “beauty of NYVelocity” and its pursuit of Lance Armstrong.

What needs to be underscored, however, is not the press’s negligence so much as its active involvement in the creation of disasters like the “new economy” delusion, the housing bubble, and the corruption of competitive cycling. Carr quotes Andy Shen, one of the founders of NYVelocity:

Bike racing is a niche sport, and then suddenly someone like Armstrong comes along and makes it 10 times bigger and no one wanted to be the one who went after him. Everyone in the industry depended on him or was afraid of him.

But the media didn’t just depend on or fear him. Lance Armstrong was their Frankenstein, boosted to superstardom by a sports media always looking for a new hero to tout and another “niche sport” to pump up into the next big generator of advertising dollars. Likewise, the financial media boosted Enron and the dot.com bubble, the “democratization of credit” supposedly underlying the housing boom, and the alleged genius of the Wall Street rocket scientists who facilitated the derivatives-induced gambling mania of the pre-crash era. They did it to goose some sexiness out of what’s essentially a dry and unglamorous business – banking and business. And they did it to sell the public on the continuing dynamism and creativity of the capitalist system, a notion they believed because their sources told them it was so.

The business and financial media will continue to boost heroes until they’re revealed to be otherwise. And they’ll continue touting the next big thing until the emperor is shown to have no clothes. It’s often noted that very few of the people who championed deregulation and were asleep at the switch when the housing bubble was collapsing, have suffered any consequences for either their actions or inaction. Fed Chair Ben Bernanke and then-New York Fed President Tim Geithner still effectively steer the economy, their notions of how to detect and forestall a financial crisis essentially unchanged. Former Sen. Phil Gramm, the Texas Republican who championed deregulation more than almost anyone in Washington in the 1990s and whose wife was Enron’s regulator at the Commodity Futures Trading Commission, moved on to a sinecure with Swiss bank UBS, from which he recently retired with full honors.

Likewise in the business press. Michael Lewis continues to be one of the most admired nonfiction writers in America. Prominent columnists like the Times’ Andrew Ross Sorkin – who never showed much awareness that the buyout frenzy of the mid-2000s, which he turned into such eagerly devoured copy, was built on the financial equivalent of sand – continue in their perches as if nothing had ever gone wrong.

So don’t bet on it not happening again. Take the housing market: Is it rebounding? Or can we expect more catastrophes as private equity and other financial interests continue seeking out now ways to speculate on the floundering sector? Here’s a piece from the Wall Street Journal last month, assuring us that “Housing Market Displays New Vigor as Prices Rise.” Or, you can check out this, from the scrappy newsletter CounterPunch and titled ‘The Housing Market’s ‘Phantom Inventory.’”

Judge for yourself. But remember that there’s no such thing as an objective media.

The Social Security wars are fought on many fronts. One of the newest is for the hearts and minds of younger Americans – high school and college students and even young workers. These people – “future decision-makers,” as they’re sometimes called – don’t always have well-developed assumptions about Social Security, Medicare, and related programs. That makes them either a non-factor in the national debate or else a potentially crucial bloc of votes. Some of them will no doubt go on to influential careers in public policy. And so the messages that are fed to them as students could have an enormous impact in future decades.

Two sets of institutions with very different values and priorities have entered the lists with curricula designed to shape young people’s thinking about Social Security, the deficit, and the fiscal choices facing the U.S. The National Academy of Social Insurance (NASI) and the Economic Policy Institute (EPI) have collaborated on a 62-page book titled A Young Person’s Guide to Social Security, released in July. Meanwhile, Columbia University’s prestigious Teachers College recently completed a three-year, $2.45 billion project, bankrolled by the Peter G. Peterson Foundation, to develop what it calls

a non-partisan, high-school curriculum that teaches students to think past the political rhetoric they hear about the economic challenges we face as a nation and learn to think for themselves.

After field-testing in Texas, Ohio, and New York, the final version of the TC/Peterson curriculum is now available free of charge to high schools nationwide.

The presumptions behind the two courses of study couldn’t be more different, a reading of the Young Person’s Guide and the Teachers College materials now available online reveals.

The starting point of the former is that Social Security is a crucial program for working Americans, that the underlying concept of social insurance offsets major risks in the private sector, and that whatever fiscal problems Social Security may face can be resolved without dismantling it or dishonoring its promises. It explains carefully and clearly how Social Security collects payroll tax, accumulates a trust fund and computes benefits. It examines the factors that are likely to affect Social Security’s funding in the future – fertility, life expectancy, growth of wages and wealth inequality, economic performance – and lays out the arguments on either side of the attacks on Social Security.

Dubbed “Understanding Fiscal Responsibility,” the Teachers College project is more wide-ranging than what NASI and EPI have put together. But, in line with the career of its patron, hedge fund billionaire Pete Peterson, it circles back relentlessly to what it portrays as the centrality of Social Security and Medicare to America’s alleged debt-and-deficit crisis. The materials this writer viewed contained virtually nothing on how Social Security works or its actual role of Social Security in the lives of retirees, working people and their families, or the disabled, giving students no clear idea of what’s at stake for people if the program were cut. They also fail to mention the distinctive nature of Social Security and Medicare as self-funded, earned benefits programs. Instead, Understanding Fiscal Responsibility treats them as just another “priority”among many, properly subject to the same political trade-offs as the Pentagon budget, infrastructure investments, and other federal budget items.

And so while The Young Person’s Guide encourages a balanced view of Social Security – not ignoring the challenges it may face but mindful of the human cost at stake in any changes – Understanding Fiscal Responsibility keeps the effect on people out of the equation. The NASI/EPI approach emphasizes the larger mission of Social Security to preserve income security in old age. The TC/Peterson approach erases such concerns, and instead encourages a strictly quantitative view of the program that takes for granted projected future changes in the population and the economy and places the burden of adjusting to them entirely on Social Security itself.

There’s something else unfortunate about Understanding Fiscal Responsibility. It’s a much more ambitious program than the Young Persons’ Guide, embracing the entire sweep of federal budgeting as it affects the economy now and far into the future. I’ve felt for a long time that American education could use a proper course in how the economy works – what is a bank? what are securities? how do the Federal Reserve and the U.S. Treasury operate? what are interest rates, GDP, and the balance of trade, and how do they affect us in the real world? But rather than provide this holistic view of the everyday economy, without which it’s difficult for the average person even to comprehend a daily newspaper these days, Understanding Fiscal Responsibility airbrushes out anything that doesn’t directly relate to the federal deficit and the national debt. It could easily lead students to believe they’ve mastered a great deal of modern economic relations when in fact they’ve been informed very selectively.

The Young Person’s Guide isn’t perfect either, despite its narrower focus. While it provides a great deal of valuable information and perspective in a handy, concise format with good graphics, it fails to address some of the more pernicious facets of the argument against Social Security – that it’s a Ponzi scheme, that the Treasury bonds in the trust funds are money the government owes to itself (they belong to the people who pay into the system and receive benefits from it – not to the government). It does a much better job at underscoring the damage that could be wrought by cutting Social Security  than Understanding Fiscal Responsibility, which doesn’t address this at all, but it doesn’t quantify what the consequences of specific changes would be. For instance, by what percent would benefits be cut, on average, if the normal retirement age was increased? if the benefit calculation was made stingier? If cost-of-living adjustments were reduced?

Any of these alterations would mean a lower standard of living for current retirees and workers approaching retirement, but the impact would be much worse for their successors – today’s workers in their 20s, 30s, and 40s. My guess would be that this analysis would matter to students and younger workers. It should have found a place in The Young Person’s Guide.

That said, it’s hard to quarrel with a curriculum that ends with the following statement:

Social Security is a fully functional insurance program that has provided benefits to millions of American workers. And for many people — people who are older, people who are disabled, people who have lost a parent — Social Security is the difference between living sustainably and living in poverty. Its strength in this important regard makes it a pillar of the American economy.

Finally, this is the difference between these two attempts to create a course of study of Social Security for people at the beginning of their adult lives. The Young Person’s Guide bases its approach on an affirmation of social solidarity not just as a good value but as an integral part of the American community’s social-economic fabric. Contrast that with the following suggested classroom discussion laid out on http://understandingfiscalresponsibility.org/:

Although the federal government is working to reduce spending, it also must address the issue of unemployment and continue to provide services to citizens. Some questions to consider: Should the federal government spend more to keep programs running or focus solely on reducing the deficit?

The fact that Understanding Fiscal Responsibility would ask students even to entertain the possibility of devoting the federal government’s entire resources to deficit reduction during a time of recession and long-term structural deterioration for working people, says a great deal about the distorted nature of its economics. The zero-sum analysis implicit in these questions – either programs are funded or the deficit rises, there’s no other way – encourages students to think of Social Security, or any program that reinforces social solidarity, as a roadblock to virtue instead of a virtue in and of itself.

That’s not surprising given the origins of Understanding Fiscal Responsibility and The Young Person’s Guide – for the one, funding comes from Wall Street; for the other, in part from the labor movement. Given the leverage on either side, I’m not going to say I’m optimistic about which curriculum is more likely to find its way into American classrooms.

Today, Jon Cowan is the president of Third Way, which calls itself “the nation’s leading centrist policy institution” and is certainly one of the most prominent center-right pressure groups in Washington. Its board of trustees reads like a Who’s Who of Wall Street, hedge fund and real estate barons and it enjoys privileged access to the national media. (Cowan himself is a close personal friend and guru to Matt Bai, the New York Times Magazine’s chief political correspondent and a leading cheerleader for center-right deficit hawks.)

Cowan popped up in a slightly different guise this summer, as an advisor to “The Can Kicks Back,” (http://www.thecankicksback.org/) billed as a new campaign by “Millennials … pushing for a non-partisan ‘grand bargain’ to fix our fiscal future.” Other advisors to the new group include such usual suspects as Erskine Bowles and former Sen. Alan Simpson (authors of the much-discussed Bowles-Simpson plan to balance the budget mostly through slashing Social Security, Medicare, and domestic social programs), former Sen. Evan Bayh, and former comptroller General David Walker.

Thus far, The Can Kicks Back consists mainly of a website that asks the visitor to watch a series of video clips and then “donate to our Millennial-driven campaign to solve America’s fiscal crisis.” Both Walker’s and Cowan’s presence, however, suggests there is big money behind this new pressure group. Hedge fund billionaire Pete Peterson has been Walker’s patron since he left government to launch a seemingly series of public appearances arguing for draconian measures to cut the deficit.

Cowan, although younger than Walker, has an even longer history as a Peterson acolyte. Back in the early ’90s, Cowan made has name as a faux street fightin’ man heading up Lead … or Leave, the first Gen X advocacy group to make a big splash in the mainstream media. Its history is both entertaining and, for those who might be prepared to take The Can Kicks Back too seriously, instructive.

Lead … or Leave was founded by Cowan and Rob Nelson, then two young Washington denizens who had previously been, respectively, press secretary to Rep. Mel Levine, a conservative Democrat from Los Angeles, and a consultant at Malchow & Company, a political campaign advisory firm.

Lead … or Leave earned its first press mentions during the 1992 elections with a not especially successful attempt to get congressional candidates to pledge not to run again if the fiscal 1996 budget deficit ended up being more than half the size of the 1992 deficit. Only 100 signed, of whom just 17 got elected, and Bill Clinton dismissed the pledge as a “gimmick.” But Cowan and Nelson caught the attention of two presidential candidates – Paul Tsongas, who signed the pledge, and Ross Perot, who did likewise and also plugged the fledgling group in some of his speeches. Perot handed them $42,000 with which to build an organization. They obtained nearly as large an amount from Pete Peterson and launched on a crusade to convince Xers that the deficit was “our generation’s Vietnam.”

Lead … or Leave hired Fenton Communications, a large Washington firm, to handle PR, rented office space at a choice Connecticut Avenue address, and and held its inaugural press conference at the National Press Club. Soon the group was “breathing down the necks of members of Congress, … focusing a white-hot light on the toll debt and deficits are taking on its generation,” according to a hard-panting profile in Campaigns & Elections, a trade magazine for political consultants.

One of the group’s first attention-grabbing actions was a “Dis the Deficit” protest on July 14 – Bastille Day – in which 500 supporters dumped 4,000 pennies, symbolizing the $4 trillion national debt, on the Capitol steps. Shortly thereafter, Lead … or Leave announced that it was teaming up with Hal Uplinger, producer of the Live Aid concerts for African famine relief, to hold a “Rock the Deficit” concert the following April promoting awareness of the danger posed by, among other things, out-of-control entitlements.

Cowan, a blustery sort, made a reputation for himself with cheeky stunts such as including condoms in a mailing whose message was the need to “practice safe politics” by attacking the deficit – a misstep that caused one conservative backer to quit. He dismissed any potential problems with such tactics, telling Newsweek, “Sometimes you have to be a butthead to get things done.” At a meeting with Mark Weinberger, chief of staff of a Clinton-appointed deficit commission co-headed by Sen John Kerrey, Cowan and Nelson showed up in shorts and “walked around like MTV stars, wearing purple sunglasses. [They] never returned anyone’s phone calls,” remembers Paul Hewitt, then executive director of the National Taxpayers Union Foundation.

But they continued to attract support from some powerful figures, including the Concord Coalition’s Warren Rudman and Sen. Bill Bradley. The latter they persuaded to chair Lead … or Leave’s deficit education campaign. Less than three years after opening their group’s doors, “The Jon and Rob Show” claimed to have raised $1.5 million, registered 178,000 college students to vote, and hosted youth summits attended by 500 “young leaders.”

Cowan and Nelson undoubtedly were good at getting attention. For months they notched profiles in newspapers, magazines, and on national TV, including ABC’s Nightline, CBS’s 60 Minutes, and back to ABC for Good Morning America. In February 1993, they appeared on the cover of U.S. News & World Report sporting a vaguely outlaw biker look and topped by a banner reading, “The Twentysomething Rebellion.” Neil Howe and Bill Strauss, authors of the would-be Gen X bible 13th Gen, were quoted saying that these young people were rebelling against “selfish boomers and greedy seniors” who were robbing future generations with their unreasonable entitlements.

Cowan and Nelson announced in the article that Lead … or Leave would hold a demonstration outside AARP’s Washington headquarters. “Entitlement programs for the elderly are a prime cause of rising federal spending yet aren’t likely to be targeted for serious cuts,” they said. Their demands included means testing of Social Security benefits. The rally attracted about 100 people, The Nation reported.

Every bona fide mass movement must have a manifesto, and so did Lead … or Leave. Titled, inevitably, Revolution X, it was published in 1994, with a foreword by Bradley. The book painted an apocalyptic picture of the world the boomers were creating unless the Xers could stop them. In a section entitled “Armaggadon [sic] 2112,” they warned that in 2011, when the boomers began hitting 65 and “start gobbling up pensions and health care benefits, a shock wave will blast people from their homes, rapidly plummet millions into poverty, and threaten the economic security and financial stability of our entire nation.”

While similar advocacy groups for boomers were exhorting them to crack down on their greedy, Depression-era elders, Lead … or Leave was intent on warning the boomers what Gen X would do to them if they tried the same generational swindle. The authors laid out 13 policy recommendations, including such unexceptional advice as to Control Crime, Create Good Jobs, Give Equal Rights to Gays, Help End Homelessness, and Make Education Affordable.

Cowan and Nelson’s two most fiscally significant recommendations, however, were to Reinvent Social Security and Trim America’s Budget. Their principal recommendations for the former were “affluence testing” that would reduce benefits for anyone earning $40,000 or more” – a remarkably low threshold – and carving out half of both the employer and the employee’s payroll tax contribution to fund mandatory individual retirement accounts. Ultimately, they wanted workers to be allowed to opt out of Social Security entirely.

Recognizing the political obstacles to getting there, Cowan and Nelson encouraged their readers to suggest to their parents that they renounce their memberships in AARP. “If today’s politics is any indication,” the authors warned, “the boomers will have more than enough political power to win what they want – whatever the cost to those who come behind them.”

Then suddenly, in 1995, Lead … or Leave ceased operations. As it turned out, much of their “organizing” within the Gen X community had been a matter of smoke and mirrors. What they called “the largest grassroots college/twentysomething organization in the country,” with over 1 million members and chapters at 115 colleges and in every state, actually had no paying members and manufactured that membership figure by counting every student at colleges “where it had at least one local, unelected representative,” according to a report in The American Prospect.

Paul Rogat Loeb, whose then-current Gen X study, Generation at the Crossroads, was based on a large number of interviews with students and young workers across the country, called Lead … or Leave’s tactics “astoundingly shameless.” He had never run across a single member of the organization in the course of his research, Loeb told Swing Magazine. Cowan and Nelson responded that Lead … or Leave’s membership peaked at 100,000, and that some reporters “deliberately misunderstood” the group’s structure. But the 1 million-members claim appeared in their book.

In truth, the failure of Lead … or Leave was a case of too much, too soon. Cowan and Nelson launched an ambitious series of projects, including a deficit-consciousness curriculum for high school students and a youth voter registration campaign, but had too few staffers to handle the workload. When the two leaders went on a national tour to promote their book, the problems became acute. Worse, the voter registration drive reportedly alienated some of their older, more conservative donors, who ceased supporting the group. The Rock the Deficit concert was never held. Ross Perot pulled his funding, according to one source, when Lead … or Leave couldn’t produce a financial report he demanded.

Along the way, the group never got around to providing a detailed account of its own policy recommendations, including the ones for Social Security. Cowan told Newsweek they would be back in the 1996 presidential campaign, when they might “burn Social Security cards in New Hampshire. It’s such an incredibly powerful image.” Instead, Nelson went on to attend Stanford Law School while Cowan moved up to a job at the Department of Housing and Urban Development, another stepping stone on his way to greater prominence – and respectability – with Third Way.

That wasn’t the end of conservative efforts to gin up a youth rebellion against Social Security and Medicare. Third Millennium, another, better organized Xer advocacy group with deeper leadership – if not membership – and virtually the same policy positions arose at about the same time and attracted considerable attention before it faded late in the decade.

Will The Can Kicks Back follow these pioneering efforts at astroturf youth revolt into oblivion? Third Way suggests Jon Cowan’s organizational skills – or at least his ability to delegate – have improved. But potential donors might want to ponder the fate of Lead … or Leave before opening their checkbooks.

Thanks to Ken Buffin of Buffin Partners, Inc., and the Buffin Foundation, for calling attention to the Social Security provisions of the Rebuild America Act in his latest monthly Commentary. Two of the three main provisions are familiar: raising the cap on earnings subject to payroll tax, and switching from using the current CPI formula to the CPI-E so that benefit payments better keep pace with the cost of living for the elderly.

The third part of Harkin’s plan is more unusual. It would boost benefit payments by changing the PIA formula that’s used to calculate benefits. Buffin explains this in more detail, but briefly, it would widen the range of income to which the current formula applies a 90% replacement rate, and create a new, high-income range that would receive a 5% replacement rate. This would boost benefits significantly for a large slice of low-income workers, and raise benefits modestly for people  with higher incomes, many more of whom are likely to need their Social Security in coming decades.

The irony of the Social Security debate in Planet Washington today, as Buffin and others have pointed out repeatedly, is that while all the political class seem to be able to talk about is how to cut Social Security, the reality is that today’s working Americans will need Social Security more than their parents due to the collapse of other sources of retirement income. The proposal by Harkin, who chairs the Senate Health, Education, Labor and Pensions Committee, is certain to receive no attention in the capital this year. But that doesn’t mean it can’t have a presence in this election.

Friends of Social Security should be confronting their elected officials and candidates, demanding 1) that they pledge to hold Social Security harmless in any deficit or budget talks after the election, and 2) demanding to know what they propose to do to expand and improve Social Security.

Rather than the phony “conversation” between the Republican right and the Democratic center-right on the size of government that the national media has been touting – in reality, a conversation on how deeply to slash the public sector – what’s needed is something that Buffin called for early last year: steps toward formulating a “National Retirement Income Policy” that addresses the crisis looming for today’s working generations. The Rebuild America Act lays down a marker by creating an occasion to once again discuss expanding Social Security.