Saturday, December 11, 2004

David Brooks is a complete idiot

He writes:
I may be a complete idiot, but I actually believe that Democrats and Republicans can reach a grand bargain that includes personal Social Security accounts while addressing Democratic objections.
Not if conservatives don't even take those objections seriously. In my view, the primary objection to Social Security "reform" is that it makes the system less solvent. It does not make sense that 14 years before the system begins to run a deficit we would direct money away from it. Shouldn't we try to improve the solvency of the system, not worsen it? But David Brooks ignores this, writing:
Before we get lost in the policy details, let's be clear about what this Social Security reform debate is really about. It's about the market. People who instinctively trust the markets support the Bush reform ideas, and people who are suspicious oppose them.

The people setting the tone for the opposition to the Bush Social Security effort depict the financial markets as huge, organized scams where the rich prey upon the weak. Their phrases are already familiar: a risky scheme, Enron accounting, a gift to the securities industry, greedy speculators preying upon Grandma's pension.

As is par for the course for David Brooks, he totally mischaracterizes the actual debate and moves it into his black and white realm of thought. Beyond that fact that he ignores the central issue of solvency he somehow believes that the debate is over whether or not to use free-markets. But Paul Krugman, Brad Delong, and I are not opposed to free capital markets in the United States. The point is not that those opposed to Social Security reform think the market is "rigged." It's not. But one can be for free capital markets and also realize that most financial markets have a larger degree of risk than government bonds. They do: this is why they typically have higher returns. Does it make sense to move previously government-guaranteed retirement savings to a riskier but potentially more rewarding investment? Perhaps, but right now I don't think that is the case. But David Brooks completely ignores the subtleties of the situation. No wonder that he asks us to ignore the details of policy before explaining what the debate is "really about." Please, David Brooks, leave the economics to Krugman and go back to your silly "sociological" generalizations.


Anonymous Anonymous said...

Totally agree with you. Another point, aside from a possibility that the market could easily straightline or decline for 20 or 30 years, many people don't know the first thing about investing and could easily... easily... lose their collective shirts leaving them with a lower retirement than they might have had. The stuffed shirts advocating privatization have no idea what abilities (or lack of them) the lower income people have. They'd love to prop up the stock market with 5% of everyone's money... and they'd take it from them every chance they could.

8:53 PM  

Post a Comment

<< Home