A privatized version of Social Security would have channeled money into the institutions -- and, quite likely, some of the bogus paper -- that are now unraveling. It's still not known how much of private retirement savings plans -- 401(k)s, IRAs, pension funds -- are burdened with now-worthless securities.

Social security privatization would have, and financial deregulation may already have, endangered people's being able to afford to retire.

That will resonate powerfully with voters in the 50-65 age group, the people who will probably swing the election.

Also, this line really disturbed me: "This is a result of excess and greed and corruption." Okay, I'll give him the corruption, but I have noticed before his dislike of business. I think he thinks greed is major part of the problem--but it isn't! Our whole capitalist system is based on the assumption that people are greedy--or rather that they will work in their self-interest and maximize their utility. That's why we need governments to step in a regulate in order to stop dangerous things that the firms in the financial sector might do that is in their individual self-interest but is not in the interest of the country, or even Wall Street as a whole.

Stated simply: Obama get't it and McCain doesn't.

"Either he wanted to tank the nation's pensions funds or he was one of the people asleep at the switch. But those are really the only two options here."

Apparently you know as little about Wall Street as you do healthcare? To be a writer do you need to not care how foolish you come off or does the writing make you not care? Which came first for you?

Apparently you are not aware of this but "The Nation's Pension Funds" have been entrusted to Wall Street for Decades.

Where do you think every Union Pension Fund is?

What is CalPERS invested in? Large corporate pensions are all handeled by Wall Street.

In fact I would safely say just about every pension fund in America is invested in Wall Street. If it works for every other plan in the country almost, including conservative corprate plans and liberal Union plans why can't it work for SS?

If Wall Street isn't safe enough for SS why is it safe enough for Union Pension Plans? Should we force all of them to divest and purchase treasury notes?

Have you considered a Food Blog? that appears to be the one subject you actually know something about. Then again you can't spend and propogandize food can you.

I didn't have any Social Security when I was living in a box in Vietnam for five years you goddamn punk bloggers.

Wait a minute ... maybe I did ... I don't know ... I'm tired ... where's that cunt Cindy?

What intrigues me are the personalities, not necessarily the policies, involved here. Phil Gramm in Gramm-Bliley-Leach -- the bill which sent a generation of financial industry lobbyists' children to college -- unwound many of these safeguards. And John Thain, Gramm's main rival for McCain's Treasury Sec, was at the NYSE for a good chunk of the last eight years. Yes, Gramm-Bliley passed and was signed into law under Clinton. But we all know that the Bush admin is not some patsy: when they don't like precedent, they'll chuck it to a gutter faster than a kid discards a candy wrapper. Perhaps if it had been the Gramm-Bliley-Saddam Hussen financial dereg bill, the Bush folks would've paid attention.

That will resonate powerfully with voters in the 50-65 age group, the people who will probably swing the election.

If the Obama campaign has enough sense to run some attack ads on the subject. I'm not holding my breath.

CalPERS and other pension funds tend to be a mix of conservative stock holdings, bonds, and the like. They're like very stolid mutual funds. This is because they are interested in long-term health and the ability to meet pension benefit obligations. It helps that they're not-for-profit organizations. They work, and are largely secure, precisely because they have a completely different set of priorities than Wall Street firms.

See, here's the thing, Nate: Social Security isn't a pension or retirement plan. It's old age insurance. It was never intended to fund retirement.

If it works for every other plan in the country almost, including conservative corprate plans and liberal Union plans why can't it work for SS?

Have you not seen a TV in the last 96 hours or so? Wall Street is proving itself to NOT WORK AT ALL for private pension plans.

And yet you and John McCain would be perfectly willing to flush the one safety net for working Americans right down that same toilet.

They've broken the social contract between capitalism and the average citizen and the worker.

What exactly is that supposed to mean? What social contract is he talking about? Does McCain believe that businesses have some essential obligation to their workers that is not required by law? This would be an extremely stupid thing for him to believe. Not just because businesses, especially Wall Street type businesses, see no such obligation but because it would cause one to rely on this mythical social contract in lieu of actual regulations.

Sure, we all know who has been sleeping on the ‘steering wheel’ while Wall Street was all hubris. But at times you feel Obama campaign is ‘sleeping’ too. Why in the world these things have to be brought up by a blogger (Ezra Klein) instead of Obama campaign hitting the airwaves with exact quotes of McCain: ‘Let us turn Social Security to Wall Street’ as said in 1999 juxtaposed with his current utterances that things have been going wrong for decades on Wall Street? Obama is missing opportunities here. Couple of other points in this regard:
- McCain talks about bipartisan commission about Financial Security as reported on TV. Where is Obama? Doesn’t he have solutions here?
- Many folks (John Judis via Joe Klein) suggested that Obama takes press conference to articulate his solution about these financial issues and then answer press. Hello? You don’t do it just because some columnists tell you which might reflect as beholden to those guys? But Obama Campaign uses Joe Klein in his ad. Then why such reluctance to this idea?

The larger problem is Obama has missed the opportunity to forcefully and tightly argue the case of ‘what is wrong with American Economy’ and ‘what are his solutions’. He had a great speech about energy and his 3 point program is quite clear, explicit and in the end very easy for average voter to tune into. Likewise it is not happening for Economy. This is crucial for Obama because voters currently think that both candidates are at loss when it comes to Economy. Pretty soon GOP will start attacking Obama that he does not ‘have solutions’ to problems of Economy and he simply keeps on complaining. Even if McCain has been contradictory; anytime he proposes some solution / action, he will take the lead on this story.

There is no point for Obama to make Economy as the central issue of this remaining campaign and simply try to ride out traditionally favorable impressions of Democrats regarding Economic solutions. GOP is already on way to blame Congressional Democrats for the failure of Banks. So this is not as favorable scenario for Obama as he thinks or Dems think. Unless he comes with forceful, quick (to demonstrate agility of his policy arsenal) and technically sound policy; he might loose on this issue.

Brent, McCain loves talking about Duty and Honor. In fact, I think the reason he changes his mind on so many issues is that he just impulsively picks the side of a given issue that gives him the best chance to drone on and on about being Dutiful and Honorable.

Back when Bush wanted to cut taxes on the rich, McCain opposed it because doing so let him blabber about Duty and Honor on the Senate floor. Today, he gets to give malefactors of great wealth a lecture on their Duty to manage the economy (read: other people's lives and well-being) with Honor.

He's a preening narcissist, and this is his particular kink.

They've broken the social contract between capitalism and the average citizen and the worker.

There is no social contract between capitalism and the average citizen and worker, nor is there a social contract between capitalism and anything or anyone else.

The very essence of capitalism is that it's every man for himself, bub.

Notice how every Republican presidential candidate since Reagan runs against his own party: I'll build a bridge to a kinder, gentler, compassionately conservative America because I'm a maverick reformer.

Three years ago, John McCain signed on to George W. Bush's efforts to privatize Social Security. He surveyed Wall Street and decided that it was a stable enough institution to entrust with the nation's pension funds. Three years ago.

There was no plan to "privatize" Social Security. If it had gone through, and workers had been allowed to funnel a meager amount of their social security savings into an account they owned, they could have put that money into a variety of financial instruments. A good one, that probably would have performed better than Social Security, would be a money market account. Could have put it into government bonds--the main thin is that little bit of SS going into the private account (if you opted-in, as you could have continued the ponzi scheme indefinitely, theoretically) would be a specific amount of actual money set aside for you. I would imagine you might have had the ability to invest in index funds, which outperform other investments over time and minimize risk. Or, keep sending that sliver of money over to the government.

Social Security wouldn't have been plowed into frickin' Lehman Brothers.

For someone who whines so much about John McLiar, there sure is a lot of playing fast and loose about what folks actually proposed, and what the likely outcomes would have been, had those proposals come to pass.

BTW, you know what those ads against Social Security "privatization" reminded me of? Some ad about Obama and how he wanted to teach sexy sex to kindergartners. Equal levels of accuracy and hyperbole.

apm- that crap works because all too many Americans are stupid, easily bamboozled fools like Kevin S. Willis.

You know the charts about how the economy under Democratic Administrations almost always outperforms the economy under Republican Administrations, for all levels of income? Part of the effect is that Republican Administrations typically have really good final years, leaving people with a more pleasant after-taste.

It doesn't look like this one will.

Sure, we all know who has been sleeping on the ‘steering wheel’ while Wall Street was all hubris. But at times you feel Obama campaign is ‘sleeping’ too. Why in the world these things have to be brought up by a blogger (Ezra Klein) instead of Obama campaign hitting the airwaves with exact quotes of McCain: ‘Let us turn Social Security to Wall Street’ as said in 1999 juxtaposed with his current utterances that things have been going wrong for decades on Wall Street? Obama is missing opportunities here. Couple of other points in this regard:
- McCain talks about bipartisan commission about Financial Security as reported on TV. Where is Obama? Doesn’t he have solutions here?
- Many folks (John Judis via Joe Klein) suggested that Obama takes press conference to articulate his solution about these financial issues and then answer press. Hello? You don’t do it just because some columnists tell you which might reflect as beholden to those guys? But Obama Campaign uses Joe Klein in his ad. Then why such reluctance to this idea?

The larger problem is Obama has missed the opportunity to forcefully and tightly argue the case of ‘what is wrong with American Economy’ and ‘what are his solutions’. He had a great speech about energy and his 3 point program is quite clear, explicit and in the end very easy for average voter to tune into. Likewise it is not happening for Economy. This is crucial for Obama because voters currently think that both candidates are at loss when it comes to Economy. Pretty soon GOP will start attacking Obama that he does not ‘have solutions’ to problems of Economy and he simply keeps on complaining. Even if McCain has been contradictory; anytime he proposes some solution / action, he will take the lead on this story.

There is no point for Obama to make Economy as the central issue of this remaining campaign and simply try to ride out traditionally favorable impressions of Democrats regarding Economic solutions. GOP is already on way to blame Congressional Democrats for the failure of Banks. So this is not as favorable scenario for Obama as he thinks or Dems think. Unless he comes with forceful, quick (to demonstrate agility of his policy arsenal) and technically sound policy; he might loose on this issue.

apm- that crap works because all too many Americans are stupid, easily bamboozled fools like Kevin S. Willis.

Is anything I said incorrect?

Of course not. But you've got name-calling! That's awesome, Steve. Good job, man, good job.

Seems like I might have missed Obama’s Colorado Speech where ha articulated his diagnosis of the current financial crisis and his solutions for the same. After going through the transcript of the speech, I have take back some of earlier harsh opinion that Obama is not doing sufficient to communicate his economic / financial policy.

Notice how every Republican presidential candidate since Reagan runs against his own party: I'll build a bridge to a kinder, gentler, compassionately conservative America because I'm a maverick reformer.

I've noticed that, too. I didn't like it in Bush, don't like it in McCain. It's a load of crap. It's letting the left and the MSM set the narrative. It's buying into what I consider a false premise--that the Republican party, from a platform point of view, needs to be run against.

Lots of lazy politicians in the Republican party that one might run against, IMHO. Unfortunately, most of them are middle-of-the-roaders or RINOS that are also good from of McCain.

1. We are all capitalists if we own any capital at all. A truck or tools or even a car or house qualify as capital.
2.My plan to privatize SS:
a. Everyone gets the same pension.
b. We dump the SS tax and fund SS out of general revenue.
c. People who want more that the standard pension make private arrangements.
d. We raise the retirement age but maybe make it easier for blue collar people over the age of 50 to disability or we have an hourly wage subsidy that goes up with age.

Ezra, reconsider.

If up to one-third of Social Security had been privatized in 2005, as President Bush proposed (and McCain agreed), up to $700 billion worth of stocks and bonds would be in Social Security accounts today.

Instead, how much real wealth is in the Social Security Trust Fund? Zero dollars. Nothing.

On Feb. 2, 2005, when President Bush made his proposal to save Social Security, the Dow Jones average was 10,596. Today, the Dow average closed at 11,059. Not much different. Considering the recent turbulence, that's not bad.

It's too bad the partial privatization idea gummed up Bush's proposal, but it's a sad fact that privatized accounts are probably the only way workers can put money in Social Security without fear the Congress will siphon the money and spend it on something else.

And by the way, I doubt the privatization would get out of hand. Republicans in particular soon would worry that the federal government had too strong a hand in business.

Democrats, too, have come along for partial privatization of Social Security, only by stealth. Last October, on the same day Hillary Clinton denied Social Security was in "crisis" (that was the party line in those days), she also proposed a new 401(k) retirement plan.

In effect, Hillary was saying she was willing to let Social Security benefits wither 20 to 30 percent over the next few decades, and, at the same time, retirees could buffer that loss with a new 401(k). That's exactly the same thing as partial privatization of Social Security.

Just don't knock partial privatization. It has some advantages, the most important of which is that it does accumulate some wealth, rather than no wealth.

Pesto, I think you nailed McCain with that statement. Very insightful.

Instead, how much real wealth is in the Social Security Trust Fund? Zero dollars.
Another BS statement about SS. The oldest and most ridiculous one. SS is backed by US Govt bonds, the most stable investment in the world, which has value as long as this country exists. That whole post is so full of SS myths. The govt doesn't siphon the money off. That gives the impression that someday someone will show up for a SS check and it will bounce. BS.

And by the way, I doubt the privatization would get out of hand. Republicans in particular soon would worry that the federal government had too strong a hand in business.
HAHAHAHAHA. Not as long as wall street was making a fortune out of the deal in transaction fees, etc.

Bottom line, investing your Govenrment into something as fluid and unpredictable as the stock market is idiotic and undermines the entire concept of a safety net.

No. The argument was not to 'turn our pensions over to wall street', it was to 'turn our pensions over to ourselves' and we will choose the investments and take the risks.

Nate says, If Wall Street isn't safe enough for SS why is it safe enough for Union Pension Plans?

I think the main idea for social security is that it will be there even if the markets fail. As it is, I am sure many retirements will have to be delayed for an unkown amount of time because of weak returns (adjustments as Bush would say) out of the markets. Those who are already retired may be able to stay that way because of SS. Incomes for those "of a certain age" are one of the only groups to see gains in income over the Bush economic cycle. I wonder how much this has to do with the stability of SS?

Kevin S. Willis wrote about the benefits of privitizing a portion of SS, Could have put it into government bonds--

Isn't that where the SS trust is located?

Glad to see the dumb-oc-rats make decisions based off of non-random samples of size N = 1 that are blatantly data mined.
Retirement investing is a 40 year horizon early on. Anyone that is 24 and plowing retirement savings(insurance) into T-bonds is stupid!

A more meaningful data point is that if you bought the S&P 39 years ago you would have gotten a 6.5% CAGR as of today's depressed levels. And if you were properly diversified and bought global equities that return would be much higher.

Their problem was they couldn't grab social security soon enough to funnel it into their economic bailout. Now they'll claim the government has spent too much money bailing out the financials and doesn't have any left for social security. It's all good to Republicans!

"I think the main idea for social security is that it will be there even if the markets fail. "

goDems, you must be much younger then me. full Medicare benefits lready promise a rotten return, on top of that SS Admin ha already told me I won't get the majority of my promised benefits. Market has never failed, it always recovers eventually vs a government promise they already told me they can't keep...pretty easy choice

nate said, you must be younger than me

Anything's possible...

nate went on to say, Medicare benefits already promise a rotten return

Ezra has given plenty of attention to health care, I leave this to one of those threads.

nate also wrote, SS Admin has already told me I won't get the majority of my promised benefits

Staying on point, the privatization plan would necessarily reduce benefits since less money would flow into the SS trust from current workers (their money would be directed to private accounts 401k-style), while retirees continue to take money out. Is this what you are referring to? I am lost on how “your benefits” were decreased, however, since the last change to SS I am aware of was in the Reagan Admin in 83 when benefits were cut. This, however, followed the benefit increase from 77.

nate it [the market] always recovers eventually

Of course, in the long run we are all dead... Eventual recovery doesn't always align with one’s retirement plans, however.

Their problem was they couldn't grab social security soon enough to funnel it into their economic bailout. Now they'll claim the government has spent too much money bailing out the financials and doesn't have any left for social security. It's all good to Republicans!

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