Monday, May 25, 2009

Festina Lente

Make haste slowly. -- Caesar Augustus
In this week's Sift:
  • The Unequal Duel. Dick Cheney was speaking at the same time on the same subject, but Obama's was the only speech worth paying attention to. He's moving very slowly to define the new relationship between liberty and security -- and that's driving everybody nuts.
  • Why It's Hard to Think Clearly about Social Security. We use several conflicting metaphors to describe Social Security, because of them is quite right. A time trip back to 1937 helps clarify matters.
  • Short Notes. Endangered species have no solidarity. Mancow changes his mind. Porn star challenges john for the senate. A few good online interviews. And Colbert on Guantanamo and Yoo.

The Unequal Duel
Thursday, very close to high noon, Dick Cheney [text, video] and President Obama [text, video] both gave speeches about national security. The media couldn't resist the temptation to frame this as a debate or even a duel. They shouldn't have. Obama's speech was a policy address to the nation by the President of the United States, foreshadowing proposals whose details may not emerge for some time. Cheney's was an encore performance of the golden oldies of right-wing propaganda. (He's still playing word games that link the Iraq invasion to 9-11.) So I'll focus on Obama and resist the temptation to give Cheney's speech the line-by-line refutation it deserves.

This isn't the best sound bite in Obama's speech, but I think it's the place to start:

After 9/11, we knew that we had entered a new era -- that enemies who did not abide by any law of war would present new challenges to our application of the law; that our government would need new tools to protect the American people, and that these tools would have to allow us to prevent attacks instead of simply prosecuting those who try to carry them out. Unfortunately, faced with an uncertain threat, our government made a series of hasty decisions. ... We're cleaning up something that is, quite simply, a mess

Since Inauguration Day, Obama has moved quickly on things like the economy. But when it comes to the security/liberty trade-off, he doesn't want to be "hasty".

On all sides, that's driving people nuts. Everyone wants to project ahead and react with alarm to what they see in their crystal balls. Dick Cheney sees "people more concerned about reading the rights to an al-Qaeda terrorist than they are with protecting the United States". Glenn Greenwald sees Obama "extending the 'preventive detention' power beyond a handful of Guantanamo detainees to anyone, anywhere in the world, alleged to be a 'combatant'." Former Bush OLC director Jack Goldsmith sees a terrorism policy not radically different from Bush's. Digby sees that "the government can capture and imprison anyone they determine to be 'the enemy' forever. The only thing that will change is where the prisoners are held and few little procedural tweaks to make it less capricious."

Depending on the exact wording of Obama's proposals and how those proposals will be implemented, any of those futures is still possible. It's also still possible that Obama will do something fairly reasonable. I'm inclined to trust him, so let me try to put the most reasonable construction on what he said Thursday.

You don't have to buy into the 9-11-changed-everything rhetoric to admit that Al Qaeda is a different kind of security challenge. It's stateless, borderless, loosely organized, and though it has few directly-commanded dedicated-for-life soldiers, it has millions of sympathizers and potential recruits. It can't be conquered like Nazi Germany. Unlike a Mafia family, its violence doesn't simply protect its profit-making activities; quite the opposite, it raises money for the purpose of doing violence.

Captured Al Qaeda agents, then, are sort of like criminals, sort of like prisoners of war, sort of like foreign spies, and sort of like political prisoners. Laws can be applied to them, but the laws weren't designed with them in mind. What to do?

The Bush approach was to give up on the law. Instead, he created zones outside the law, where the president could order whatever he thought necessary. Guantanamo was a physical zone outside the law. "Enemy combatant" was a classification outside the law. (Once the president had declared you an enemy combatant, you had no rights of any kind; no one outside the executive branch had the right even to check that you were still alive.) Warrantless wiretapping was an intelligence-gathering system outside the law. The original Bush military tribunal system was a procedural show that could do nothing but rubber-stamp outside-the-law decisions already made. Signing statements and the unitary-executive theory allowed the president to put aside whatever laws he found inconvenient.

That's the "mess". The courts have rejected a lot of the Bush system, and will probably reject all of it eventually. And so we have hundreds of people in a legal situation that should never have been allowed to happen: They have been taken outside the domain of law and held there for years. Some of them are probably dangerous and some of them probably believe they are at war with us -- so just saying we're sorry and letting them go seems really stupid. Now we need to figure out some other way to re-admit them into the domain of law.

Obama's speech does not define exactly what "the rule of law" means to him. But at a minimum, it seems to mean that your judges are independent from your accusers, and that both are part of some organized system recognized by Congress. So far, so good, but that's pretty vague, and is still open to wild interpretations in many directions.

On the other hand, we're still only four months into the Obama administration. He doesn't want to be hasty. Which I guess is OK, if he eventually gets it right.

I'm reminded of a Gahan Wilson cartoon that unfortunately I can't find online. A westerner and a native guide are crossing the desert on two enormous tortoises. The guide says: "Our people have many sayings on the vanity of haste, effendi."

Jane Mayer says that the al-Marri case is the one to watch.
As usual, John Stewart had the most complete coverage of the "duel".

A Justice Department attorney blogging in his private-citizen capacity thinks Obama is open to prosecuting Bush officials who broke the law. He picks this line out of Obama's speech: "The Department of Justice and our courts can work through and punish any violations of our laws."

Why It's Hard to Think Clearly About Social Security
Every year the trustees put out a report on the current state of the Social Security Trust Fund. There's always some projected year when the SSTF starts paying out more than it takes in (now 2016), and some later year in which the SSTF's balance is zero (2037). Every year, this report is followed by headlines about how Social Security is "going broke". As a result, lots of young people believe that they will never see a dime out of Social Security. I thought that myself when I was 30.

How seriously should we take these fears? Is 2016 or 2037 some kind of crisis point? Do we need to drastically cut benefits, raise the retirement age, or privatize the system in order to save it?

Salon's Michael Lind does a pretty good job of debunking the worst of the fear-mongering, including pointing out the most common rhetorical trick: Combine Social Security (which is in reasonably good shape) and Medicare (which isn't) into one big "entitlement crisis" -- then ignore Medicare and claim that this crisis forces major changes in Social Security.

In this article I'd like to take one more step back and ask: Why is it so hard to wrap our minds around Social Security, and consequently so easy to fear-monger about it? Looking back, we've always discussed Social Security in terms of something we understand better: insurance or pensions or charity or a big collective IRA or even a Ponzi scheme. Al Gore used to talk about putting the SSTF in a "lock box" so that the government couldn't raid it to pay for other programs.

And that's the problem: None of these metaphors is exactly right, so if you follow any of them too far, you end up talking nonsense.

Start at the beginning. Social Security comes out of the Great Depression, when even people who had worked hard and been thrifty all their lives might be destitute in old age because a bank or a pension fund went broke. My father once rented a room from a widow who had lost her savings in a bank failure. She had never intended to run a boarding house, but it was her only remaining option. There were lots of people like that, and many didn't have a house to fall back on.

We sometimes talk about old people being too proud to accept charity, but that was less than half the story. The very idea of it -- that no matter what you do, you still might be a charity case when you get old -- sent a ripple of fear through all age groups. The public wanted to know that working while they were able would guarantee some kind of security in old age. The Depression had proved that personal savings and private pension funds couldn't make that guarantee (as many people are rediscovering after the Crash of 2008). Only the government was big enough.

So the charity metaphor was unacceptable from the beginning. And that shows why one proposed solution -- means-testing -- won't work. If only losers collect, we've missed the point.

The pension-fund metaphor also won't work, because from the beginning the problem was too immediate. A pension fund is essentially a group savings plan. A large number of people pay in for many years, a trustee invests the money, and the survivors get old-age payments for as long as they live. It takes time to get rolling. But in 1937, the country didn't have time. So in 1940 the first monthly Social Security check went out to Ida May Fuller of Ludlow, Vermont. Ida makes a good example, because she had paid in $24.75 during the previous three years, and was already ahead by her second check. She ultimately lived to be 100 and got $22,888.92. A pension fund couldn't do that. And when younger people retired much later, they didn't get a "pension" either -- because Ida had spent their money already.

That's why some critics call Social Security a Ponzi scheme -- an investment fund that gives high returns by paying current investors the money that comes in from new investors. A Ponzi scheme is a type of fraud -- Bernie Madoff is our generation's Charles Ponzi -- which inevitably collapses. But that doesn't capture Social Security either, because Ponzi schemes collapse by exponential growth. The number of investors necessary to keep the scam going eventually becomes larger than the population of the world, so something has to give. Social Security is more disciplined than that; it grows with the population, not faster. So there's no mathematical reason why it can't go on forever.

Insurance is a model that allows some people (like Ida) to take out much more than they put in -- like if your house burns down the day after your fire insurance policy takes effect. The insurance metaphor is why you see the acronym FICA on your paychecks: the tax was set up by the Federal Insurance Contributions Act. But Social Security isn't really insurance either, because Ida very predicably turned 65 on her 65th birthday; it wasn't an accident.

The macro thing. And then we get to the most mind-straining aspect of Social Security, the macro-economics. This is where Social Security runs into something else that we only sort of understand: money. On a personal level, money seems totally real, and saving it for retirement makes perfect sense: You pile it up while you're young, then you draw down the pile when you're old. Simple.

But now imagine that everybody in the world is the same age and that we all save our money for retirement. On the appointed day, we all retire. We all take money out of our pile, go down to the marketplace and buy ... nothing. Because nobody's making anything to buy; we're all retired.

On a macro level, the money we saved was an illusion. If we had saved clothing or non-perishable food, if we had invested our pre-retirement effort in building shelters that would last the rest of our lives -- then we'd have something. But from saving money we have nothing.

Macro-economic issues came up right away. The "Roosevelt Recession" of 1937 -- a second dip within the Depression -- was blamed in part on Social Security, which had started collecting taxes that year but was paying only death benefits. Retirement checks weren't supposed to start until 1942, after the SSTF had piled up some money. It sounds sensible, but macro-economic weirdness strikes whenever the government tries to pile up money: It's an anti-stimulus. Demand drops and the economy shrinks.

So in 1939 Congress speeded up the plan, which is why Ida started getting checks in 1940. The whole point was to avoid having a big balance in the SSTF. Think about that for a second. We're panicking about the SSTF shrinking; in 1939 they worried about it growing.

The Boomer problem. Congress has fiddled with Social Security's taxes and benefits many times over the years. The most recent major revision (which happened only months before the trust fund would have gone to zero) came in 1983. The payroll tax was increased and the retirement age gradually raised. (It is 66 and a couple months for me; 67 for everyone born after 1960). The point of doing that was to build up a balance that could be drawn down to pay benefits for the Baby Boomers, whose numbers would have broken the system otherwise.

So why haven't we been in a Roosevelt Recession ever since? Simple: the rest of the government used up the Social Security surplus by running big deficits. (Raiding Al Gore's lock box, in other words.) So there is no big pile of money waiting for the Boomers to draw it down. Instead, the SSTF owns a bunch of government bonds.

And this is where it gets confusing. On a personal level, that plan would make perfect sense: You save money for retirement and invest it in T-bills. What could be more sound than that? But on a macro level, it seems like a shell game: The "surplus" that is supposed to fund the Boomers' retirement consists of one part of the government holding IOUs from another part.

And here's what nobody explains: Any financial thing we might have done to prepare for the Boomers' retirement -- like a big pile of money in the SSTF -- would have been equally dubious. Because (like the everybody-retires fantasy) Boomer retirement is a problem in the real economy, not the money economy.

Forget money. Independent of the paper in anybody's wallet or the electronic blips in the computers of the Federal Reserve, 20 or 30 years from now there are going to be an unprecedented number of old Americans. Most of them are going to consume more than they produce, because ... well, that's how aging works. A lot of us 80-somethings are going to need surgery, for example, and nobody trusts an 80-something surgeon. We're also not going to be flying airliners, breaking down the doors of serial killers, pitching for the Yankees, or waiting tables at Hooters.

Younger people are going to have to do all that stuff, and a lot more. As a group, working-age people have always produced more than they consume. Over the next few decades, that phenomenon is going to be a little more extreme. Nothing we can do with money will change that fact.

No matter how much is in the SSTF, the rest of the government is going to have to start running a surplus in not too many years -- reversing the tide that's been running since 1983. That means higher taxes, less spending, and fewer wars. It's not impossible -- Clinton was running a surplus when he left office. And the Social Security outflow will be an economic stimulus on its own, so special stimulus programs should not be necessary.

But there will be pressure to examine our priorities -- all of them, not just how committed we are to the idea that hard-working people shouldn't be poor just because they get old. Lind brings that fact home with this thought experiment:
Suppose that in an alternate Rod Serling universe our other-dimensional twins paid for Pentagon spending on the basis of a dedicated national consumption tax, while they paid for Social Security and Medicare out of general taxation. In that case, opponents of Pentagon spending might have a field day denouncing the gap between the estimated federal consumption tax revenues in, oh, let's say, 2050 and the military threats they estimate that the U.S. will face in half a century. But in this "Twilight Zone" America, neither Social Security nor Medicare, lacking dedicated taxes, would have "unfunded liabilities" any more than the Pentagon does in our world.
So the real question is: Going forward, what are our priorities as a country? It's a general problem, not specifically a Social Security problem.

Short Notes
I think this started as a joke, but I'm not sure it still is: Porn star Stormy Daniels has formed an exploratory committee as a first step towards running against Republican Senator David Vitter (of D.C. Madam fame). She's got a web site and everything. Josh Marshall's response to the Stormy Daniels Exploratory Committee: "Is that a euphemism?"

I guess endangered species don't share a sense of solidarity. Now that the bald eagles are coming back in New England, they're feasting on the chicks of the great cormorant.

Stephen Colbert knows what to do with the detainees after Guantanamo is closed. And he responds to the controversy over John Yoo's newspaper column.

In previous Sifts I've told you about two books: The Dark Side by Jane Mayer and Torture Team by Philippe Sands. Amy Goodman interviewed both of them Wednesday about recent developments in the torture issue.

DailyKos' top economic blogger Bonddad doesn't think that we'll see inflation from all the money being created.

In this video, the American News Project interviews Scott Horton and Bruce Ackerman on the subject of what should happen to the federal judgeship of torture-memo writer Jay Bybee.

How long did it take conservative talk-radio guy Erich "Mancow" Muller to change his mind about whether waterboarding is torture? Seven seconds. "It's way worse than I thought it would be," he said.

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