Friday :: Mar 11, 2005

When You've Lost Bob Samuelson...

by rayman

...You know you've got some serious problems pushing SS privatization. Samuelson, the Washington Post/Newsweek pundit extraordinaire, recently wrote one of the most inane op-eds I've read (against some daunting competition) when he implored Congress to Cut My Benefits! Wotta humanitarian. But even Samuelson isn't buying the idea that private accounts (under the tender lovin' care of Wall Street) would constitute an improvement over the present system:

The idea of personal accounts is that Wall Street should triumph over the welfare state. Just the opposite might occur: The welfare state would triumph over Wall Street. The money flowing into personal accounts would not be invested according to the "free market." Individuals wouldn't have the freedom to invest in Microsoft, General Electric or eBay. Instead, it would be invested according to rules made by Congress, influenced by politics. There would be unrelenting pressure from interest groups, "experts" and public opinion.

The danger is that investment decisions would become unduly politicized and that the economy would consequently suffer. The rules governing which stocks could or couldn't be purchased for personal accounts might become irrational or counterproductive. The reason is that what personal accounts aim to accomplish is inherently difficult, perhaps impossible. The economic and social roles of Wall Street and the welfare state are fundamentally opposed. The attempt to blend them through personal accounts would create massive contradictions.


rayman :: 6:37 AM :: Comments (19) :: Digg It!