Friday, March 11, 2005
Oxley - "Nothing to fear: but more lies and bullshit"
We had a dream last night. It took place in Washington today as Michael Oxley walking to the podium as the inaugural speaker of the Ripon Society's new "Bully Pulpit" series:
Ladies and Gentlemen, I had some prepared remarks to make today, but I am going to put them aside. I really meant to read this speech. As late as last week, I was proud of myself for coming up with the title, "Nothing to Fear: Owning Retirement Security". I thought it would be clever nod both to FDR and President Bush's "Ownership Society".And then our hotel's wake up call suddenly brought us back from reality
But last Monday I was back in the Ohio heartland, and something changed me. My district is a mix of small rural communities and has-been industrial towns. These are hard working people that play by the rules and consider Social Security even more sacred than the Marion Popcorn Festival and the Allen County Fair. They are angry and scared that the big shots in Washington are going to sell off their retirement.
And I've let them down. I was blinded by the hundreds of thousand of dollars I rake in each year from the financial community. I lost my bearings, but now I see the light.
If it weren't for my constituents shaking me out of my cash-induced psychosis, I would have done and said whatever it took to pry those funds from the Social Security trustees.
And I had been prepared to lie to you today.
First, I was going to soften you up with one of those lies about what FDR said. Hell, I figured that if Brit Hume and John Fund can do such a brilliant job of slicing and dicing Roosevelt’s words that I figured that I could to.
I was prepared to bamboozle you with the new phrase that President Bush, Karl Rove and Frank Luntz wants Republican leaders to use now - 'add-on' accounts' instead of private accounts or even personal accounts. You see, the boys at the White House had a 'come to Jesus' meeting with some of us last week, and you know how Luntz wants us to say everything just right, especially if we can steal some of the oppositions own words.
And, so, I had planned to tell you that what we need was a rational discussion on adding a personal account option to Social Security. And that would have been a lie, because the President has no intention of adding on anything. His plan is a carve out, plan and simple. I saw how the press corps had been torturing Scotty McClellan and he deserves it. Anyone Republican that tries to use that 'add-on' stuff ends up looking stupider than a javelin thrower at the Ashland Balloon Festival.
Speaking of Luntz, I was also prepared to tell you another whopper that was more or less cooked up by old Frankie boy. I was going bring out that old chestnut about how polls showed young people have a greater belief in UFOs than in a Social Security check being there for them. The truth is that there was really only one poll, if you want to call it that, and it was cooked up by Frank back in 1995 back before he ran into a few integrity problems. I wasn’t going to mention that Luntz’s so-called findings have been thoroughly debunked, cause, well, it would have ruined the story.
I had more lies I was prepared to tell today. I was going to tell you that Social Security is in crisis and would soon be growing an enormous deficit. Calling it a 'deficit' does make it sound scary, but honestly it’s not all that scary. Hell, one of those 75-year guesstimates from those Social Security trustees is that we won't fall short for another 40-50 years, and even those guesses have wildly underestimated the growth of the Social Security trust funds.
I have to admit that if I told you these lies about the add-on accounts and the deficit today, I would have been immediately humiliated. That's because right now, across town, GAO head David Walker is telling the Ways and Means Committee that "the Social Security program does not face and immediate crisis" and that private accounts "would exacerbate the insolvency problem. . . You will end up with negative cash flow earlier." Who would the public have believed, a public servant like Walker, or a horse with its head in the Wall Street trough like me?
But believe me, I really was prepared to lie to high heaven. These tall tales I’ve outline already are bad enough, but I’ve yet to mention the worst lie I was going to tell. I was going to lie about the nature of the Social Security program, itself.
You see, ladies and gentlemen, my friends at Credit Suisse and Morgan Chase wanted me to keep telling the American people that it was an investment program and not an insurance program, and the Social Security just wasn't giving you the rate of return you deserve.
But, I decided that I don't think voters are that stupid. Jeez, unless someone is a member of the coupon-clipping class like some of you, they are going to see the FICA deduction on their check every payday. The name, the Federal Insurance Contributions Act, really doesn't leave much question, does it?
The Wall Street fellas think that if we can convince Americans that their FICA payments belong to them, then they can start getting them to gamble on getting higher rates of return. Hah! Apparently the guys over at Goldman Sachs have never tried to ask the companies that insure their Lexus's and vacation homes to return their past premiums so they could invest them.
But even if we did divvy up the funds into individual accounts, the truth is that their would be a lot of losers. In my prepared remarks, I was going to paint this fantasy picture of the emergence of worker-capitalists taking control of their own financial destiny. It would have been a pretty picture, but one that faker than Starving Artist sale at the Kenton Holiday Inn.
Even the Carey Times, a small newspaper in my district, did a man-on-the-street interview on Social Security reform recently. One person remarked, "I don't think the common people are disciplined enough or know enough about stocks to play the stock market." Another said, "I'm afraid people will lose their money the stock market."
The story Wall Street wants me to tell - but I won't anymore - boils down to this: we can "save" Social Security by shifting the funds to retirement accounts. These guys like it when guys like me suggest that American's' stock investments will receive annual returns of 7%, the average return on stocks over the past seventy-five years.
Now, I'm no MBA, but I know that for stocks to provide returns of 7% under such conditions, the average price-to-earnings ratio -- already at 30 to 1, more than twice the historic average -- would have to rise eventually to incredible levels of over 400 to 1.
Of course, it is possible that the economy will grow more quickly than the Trustees predict, making 7% stock returns more plausible. But if that were to occur, there would be little or no shortfall in Social Security revenues to begin with.
Ladies and gentleman of the Ripon Society, I know that this is not what you expected to hear. I know that my honesty may cost me my seat on the Society's board. And I know that you may never call me back to have lunch here again. But I'll sleep easier thinking that I am truer to the values of Lincoln and Roosevelt than to the Bush's . . .