James Galbraith on Social Security ‘reform’

11.8.2012 1 Comment

Now that Barack Obama has secured the White House for another term, we can relax knowing that Social Security, Medicare and Medicaid are safe from the evil hands of the Pete Petersons of the world.

Actually, these programs are not safe in any way. As James Galbraith wrote in Salon:

Big Money has been gunning for Social Security, Medicare and Medicaid for decades — since the beginning of Social Security in 1935. The motives are partly financial: As one scholar once put it to me, the payroll tax is the “Mississippi of cash flows.” Anything that diverts part of it into private funds and insurance premiums is a meal ticket for the elite of the predator state.

And the campaign is also partly political. The fact is, Social Security, Medicare and Medicaid are the main way ordinary Americans connect to their federal government, except in wars and disasters. They have made a vast change in family life, unburdening the young of their parents and ensuring that every working person contributes whether they have parents, dependents, survivors or disabled of their own to look after. These programs do this work seamlessly, for next to nothing; their managers earn civil service salaries and the checks arrive on time. For the private competition, this is intolerable; the model is a threat to free markets and must be destroyed.

The main target of the austerity mongerers? Social solidarity or community.

And that is what the Objectivists in Congress cannot stand. Our sense of community is an obstacle to their power. And what they are determined to destroy, we must defend. There is much more to be said, about disaster relief, food assistance, housing and other threatened programs. But to begin, Congress should leave Social Security, Medicare and Medicaid alone.

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Quote of the day

11.8.2012 1 Comment

President Barack Obama and OMB director Peter ...

President Barack Obama and OMB director Peter Orszag.

Yves Smith of Naked Capitalism wrote this one:

The Obama victory was less than 24 hours old when the Rubinite faction of the Democratic party was out full bore selling “reforming” Social Security as the adult solution to the coming budget impasse, giving it higher priority than any other measure on the table while simultaneously admitting that this is not even a pressing (let alone real) problem.

And the worse is that this snakeoil salesmanship, which comes from former OMB director, now Citigrgoup vice chairman of corporate and investment banking Peter Orszag, is almost certainly an Obama trial balloon. It’s no secret that Obama has long viewed cutting, whoops, “reforming” Social Security and Medicare, as one of his fondest goals. He made that clear shortly before he was inaugurated, in a dinner with conservatives hosted by George Will. He even volunteered in the debates that he and Romney were on the same page as far as these programs were concerned. So it’s reasonable to view Orszag as fronting for the Administration.

Orszag’s Bloomberg piece is simply putrid. It starts out praising Obama for discipline during his campaign and insisting he need to show discipline on the budget front. But this is already a rhetorical bait and switch.

The first mention of discipline referred to the President’s team choosing to put in long hours to meet their objectives. By contrast, the discipline Orszag wants to see happen on the budget front is sort you inflict on children, animals, and submissives in S&M (actually worse than that, since submissives at least get off on being hurt). But Obama is into that: “I want fiscal restraint and order.”

Now it’s outside the scope of this article to address long form, but we will stop to remind readers that the budget hysteria is completely, utterly misguided. The last thing this economy needs is austerity.

James Galbraith characterized this kind of political work as economic predation. And it is just that. Fractions of big capital seek to capture sitting governments in order to use the power of the federal state to extract rents from the people as a whole. This rent-seeking politics long ago generated a complex system that persists — that retains a distinctive identity — through time. Sheldon Wolin identified this political system as an inverted totalitarianism, a democracy without citizens, a political system that serves the general and specific ends of the profit taking corporation.

Barack Obama is an agent of this system. Some of his supporters might be shocked to learn that he wants to cut Social Security and Medicare, that he will not seek peace or implement a peacetime army, that he will cut deals with the Republicans that harms the interests of the majority of Americans. This is what lesser evil voting in America brings into being — evil.

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