On Capitalism, Europe, and the World Bank

An interview with Noam Chomsky 

Why are they trying to destroy social security, for example?  There’s no serious economic problem, it’s all fraud. It’s in as good fiscal health as it’s ever been, but it is a system that benefits the general population. It is of no use at all to the wealthy. But a very large part of the population, maybe 60 percent or something like that, actually survive on it. So it’s a system that contributes nothing to profit. It has other bad features, like it’s based on the principle that you should care about somebody else. And that’s hopelessly immoral by the moral principles of power and privilege, so you’ve got to knock that idea out of people’s heads and get rid of the social security system. A lot of what’s called - ridiculously - "conservatism" is just pathological fanaticism based on maximization of power and wealth in accord with principles that do now have a legal basis. 

Z Magazine Jan. 2007


Played for a Sucker

By Paul Krugman, Professor of Economics at Princeton University

Inside the Beltway, doomsaying about Social Security - declaring that the program as we know it can’t survive the onslaught of retiring baby boomers - is regarded as a sort of badge of seriousness, a way of showing how statesmanlike and tough-minded you are.

Consider, for example, this exchange about Social Security between Chris Matthews of MSNBC and Tim Russert of NBC, on a recent edition of Mr. Matthews’s program “Hardball.”

Mr. Russert: “Everyone knows Social Security, as it’s constructed, is not going to be in the same place it’s going to be for the next generation, Democrats, Republicans, liberals, conservatives.”

Mr. Matthews: “It’s a bad Ponzi scheme, at this point.”

Mr. Russert: “Yes.”

But the “everyone” who knows that Social Security is doomed doesn’t include anyone who actually understands the numbers. In fact, the whole Beltway obsession with the fiscal burden of an aging population is misguided.

As Peter Orszag, the director of the Congressional Budget Office, put it in a recent article co-authored with senior analyst Philip Ellis: “The long-term fiscal condition of the United States has been largely misdiagnosed. Despite all the attention paid to demographic challenges, such as the coming retirement of the baby-boom generation, our country’s financial health will in fact be determined primarily by the growth rate of per capita health care costs.”

How has conventional wisdom gotten this so wrong? Well, in large part it’s the result of decades of scare-mongering about Social Security’s future from conservative ideologues, whose ultimate goal is to undermine the program.

Thus, in 2005, the Bush administration tried to push through a combination of privatization and benefit cuts that would, over time, have reduced Social Security to nothing but a giant 401(k). The administration claimed that this was necessary to save the program, which officials insisted was “heading toward an iceberg.”

But the administration’s real motives were, in fact, ideological. The anti-tax activist Stephen Moore gave the game away when he described Social Security as “the soft underbelly of the welfare state,” and hailed the Bush plan as a way to put a “spear” through that soft underbelly.

Fortunately, the scare tactics failed. Democrats in Congress stood their ground; progressive analysts debunked, one after another, the phony arguments of the privatizers; and the public made it clear that it wants to preserve a basic safety net for retired Americans.

That should have been that. But what Jonathan Chait of The New Republic calls “entitlement hysteria” never seems to die. In October, The Washington Post published an editorial castigating Hillary Clinton for, um, not being panicky about Social Security - and as we’ve seen, nonsense like the claim that Social Security is a Ponzi scheme seems to be back in vogue...

But Social Security isn’t a big problem that demands a solution; it’s a small problem, way down the list of major issues facing America, that has nonetheless become an obsession of Beltway insiders. And on Social Security, as on many other issues, what Washington means by bipartisanship is mainly that everyone should come together to give conservatives what they want.

New York Times, November 16, 2007