Don't let Wall Street get its hands on Social Security

Will President Obama propose cuts to Social Security in his State of the Union address on Tuesday? That's the burning question among those who've noticed that the attacks on the middle class gathered steam since the November elections.

The peerless Dean Baker is bracing for Obama's speech. The economist hopes Senate President Harry Reid (a good Teamster friend) will thwart any attempt to gut the immensely popular, efficient and solvent Social Security system. Baker wrote a terrific piece in the Huffington Post, titled "Can Harry Be a Hero?" that's worth reading in its entirety. Baker explains why Social Security is under attack (Hint: It isn't because it's breaking the budget and it isn't because it's in financial trouble.)

There is no doubt that the forces arrayed against Social Security are enormously powerful. The wealthy hate the idea of government money going to anyone but them, and since the vast majority of Social Security benefits are going to low and middle-income families, the program is an outrage to their sensibilities.

The financial industry also knows a cash cow when they see one. It would take more than $10 trillion in private accounts to generate the same amount of money as Social Security pays out each year in benefits. If the financial industry collected just 1.0 percent of this sum in fees each year, it would mean another $100 billion a year into the coffers of the Merrill Lynch set.

If you're worried about Social Security, and you should be, go to the website for "Strengthen Social Security."  There you'll find what you can do to fight the latest attempts by Wall Street to destroy the middle class.

Today's Teamster News 09/22/10

Obama's Economics Chief Is Set To Leave New York Times ...Lawrence H. Summers, the chief architect of President Obama’s economic policy, would leave at the end of the year.

China's Currency and the Trade Deficit CEPR ...If the value of the yuan rises relative to the dollar, then ... imports would be more expensive in the United States, making people here more likely to buy domestically produced goods...

Watching Wal-Mart at Midnight Wall Street Journal ...on behavior at a Walmart store around midnight at the end of a month: "about 11 p.m., customers start to come in and ... fill their grocery basket with basic items, baby formula, milk, bread ... until midnight, when electronic — government electronic benefits cards get activated and then the checkout starts...

Stores Scramble To Accommodate Budget Shoppers ...New York Times ...Dollar stores have shown the biggest gain in shopper visits over the last year...

Strike Continues as Prince George's Bus Company Refuses to Bargain Fairly Teamsters Local 639 ...Members of Teamsters Local 639 working for Veolia/TheBus voted down the company's contract proposal yesterday by an overwhelming majority....

Don't kill growth and jobs in the name of deficit reduction

You can't solve a problem unless you know what's causing it, and America's economy won't get fixed unless the government figures out why it sucks so bad.

The problem with the economy is not the deficit, or uncertainty, or high taxes on the wealthy. It's the 28 percent of U.S. households that have at least one person looking for a full-time job.

People aren't buying stuff because they don't have jobs and they don't have any money.

As the peerless Dean Baker said on a conference call this morning, "The story is demand."

Baker joined 299 other economists in signing a statement warning our political leaders,

"Today there is a grave danger that the still-fragile economic recovery will be undercut by austerity economics."

The economists tell us to remember our history:

In the Great Depression, Franklin Roosevelt’s New Deal generated growth and reduced the unemployment rate from 25 percent in 1932 to less than 10 percent in 1937. However, the deficit hawks of that era persuaded President Roosevelt to reverse course prematurely and move toward budget balance. The result was a severe recession that caused the economy to contract sharply and sent the unemployment rate soaring. Only the much larger wartime spending of the early 1940s produced a full recovery.

The economists want our political leaders in Washington to do three things:

1. send aid to the states whose budget crises threaten recovery by forcing them to lay off school teachers, public safety workers, and other essential workers.
2. invest in public service jobs
3. invest in infrastructure projects for transportation, water, and energy conservation that will make our economy more productive for years to come.

Don't hold your breath, though.

Social Security: "Like a Milk Cow with 310 Million Tits"

The source of that comment, sadly, is not just some wingnut off the street. It's former Wyoming Senator Alan Simpson, the co-chairman of President Obama's deficit commission. He has suggested the deficit commission will recommend cutting back Social Security to reduce the deficit.

CBS News reported that Simpson wrote the offensive comment in an e-mail to Ashley Carson, the executive director of the Older Women's League. Simpson wrote Carson that he spent many years trying to stabilize Social Security. However, he wrote,

"Yes, I've made some plenty smart cracks about people on Social Security who milk it to the last degree. You know 'em too. It's the same with any system in America. We've reached a point now where it's like a milk cow with 310 million tits!"

Dean Baker points out that Simpson is not only crude but clueless. Baker says

Simpson seemed surprised by what should have been old hat to anyone familiar with the policy debate on Social Security.

and

Simpson's public remarks also seem to show very little knowledge of the financial situation of the elderly or near elderly.

Baker notes Simpson doesn't realize that the baby-boomers nearing retirement have had most of their savings wiped out by the collpase of the housing bubble and the stock market.

And finally, Baker points out that Simpson doesn't seem to have a clue as to the type of work that most older people are doing.

While it is possible for senators to continue in their jobs late in life, nearly half of older workers have jobs that are either physically demanding or require they work in difficult conditions.

Here's what you need to know about Social Security: The shortfall is relatively small and far into the future.

Oregon Rep. Peter DeFazio and Vermont Sen. Bernie Sanders wrote a letter on Wednesday asking President Obama to fire Simpson from the commission.

“While there are honest differences of opinion as to how best to tackle this growing problem, we should all be in agreement that everyon working in this area – especially someone in as important a position as the co-chair of your National Commission on Fiscal Responsibility and Reform – has a responsibility to be as serious, deliberate, and sober as the challenges we face."

Yesterday, The New York Times reports Simpson isn't going anywhere.

Damn.

Washington Post Invents Debate Over "Free Trade"

The peerless Dean Baker points out that the Korean trade deal doesn't free trade. Many trade barriers remain, and some -- like patent and copyright protections -- are increased. He writes

...the trade agenda of the United States had been about reducing barriers to trade in manufactured goods with the purpose of putting non-college educated workers in direct competition with much lower paid workers in other countries.

Baker has a better description of the Korea trade deal: "one-sided protectionism."

Amen, brother.

Social Security Zombie Lies

Most Americans actually believe they won't receive any Social Security benefits at all. Mother Jones blogger Kevin Drum has a nifty chart illustrating the results from a recent Gallup poll that show six in 10 people don't think they'll get a dime from Social Security. Drum concludes

That's loony tunes territory, and it's now what most Americans believe.

Dean Baker believes that a concerted public relations campaign by investment banker Pete Peterson is undermining Americans' confidence in Social Security.

Peterson, a Wall Street investment banker, has pledged $1 billion to a foundation that has cutting Social Security and Medicare as its major goals. He has spoken widely around the country telling people that Social Security is going broke and that it has no trust fund. He has enlisted prominent political figures, including former President Bill Clinton in this effort.

Baker points out that other groups are eroding support for Social Security, including President Obama's deficit commission.

Duncan Black, who blogs under the Atrios handle, refutes additional Social Security Zombie Lies.

No, life expectancy at age 65 has not changed all that much, and those changes were anticipated.

No, the beneficiary/taxpayer ratio is not an important issue.

No, you can't do better investing the money in private sector funds (and people wouldn't do it anyway. 25-year-olds do not save 15% of their gross for retirement).

Brace Yourself for Another Assault on Social Security and Medicare

The peerless Dean Baker sounds a warning: the wingers will soon be making another run at privatizing Social Security and Medicare.

Today he writes:

Next weekend will feature another milestone in the drive to cut Social Security and Medicare. The organization America Speaks will be hosting a series of 20 meetings in cities across the country. They will ask the people at these meetings, a cross section of the nation, to come up with proposals for dealing with the country’s projected long-term budget deficit.

The way the problem is outlined for these meetings virtually guarantees that most of the participants will opt for big cuts to Social Security and Medicare. The results of this song and dance exercise will then be presented to President Obama’s fiscal responsibility commission on June 30th, which will use it as further ammunition for plans by its co-chairs to gut these programs.

Baker dissects the propaganda used by America Speaks -- the bad economics, the omissions, the bias. Read the whole thing here.