Deep Underground with Raul Groom

Tuesday, March 08, 2005

Social Security

This was a comment from Heathkernel that I missed when it was posted - it's so good I decided to move it to the front page. You go heathkernel. I especially like "middlingly competent."

Quote (from WashPost):
While he [Alan Greenspan] previously has suggested various ways of trying to restrain the growth of future benefits to bolster Social Security's future solvency, Wednesday he appeared to deride such efforts as merely "patching a system that is fundamentally inappropriate for the nation's future."

"Something's got to give," he said. "We have to find a better model."

[End Quote]

I think someone needs to have this guy check his job description. As a central banker, he is supposed to be setting interest rates, adjusting the money supply to optimal levels, and so on, not making political pronouncements. Calling Social Security "fundamentally inappropriate for the nation's future", besides being vague nonsense puffed up by rhetoric, is clearly a political judgment. He is not telling us what our financially viable options are for fixing social security. Instead he is telling us what option we should take among those financially viable options.

I wish someone could tell me why a middlingly competent central banker, with obvious ideological axes to grind, is fawned over by our media as the last word in politically impartial and far-sighted wisdom. If this goes on, we'll need to have the Jacksonian revolution all over again. Down with The Bank of the United States!


  • Thanks for the kind notice. I post most of my comments (including this one, originally) at CleverNothing (, a board run by a friend of mine.

    By the way, I'm heatkernel, as in the quantity measured by calorimetry, not heathkernel. I like "heathkernel", though. It sounds like a term that would have been coined by Emily Bronte, had she been a mathematician instead of a novelist.

    By Blogger heatkernel, at March 9, 2005 at 3:12 AM  

  • I'm not wild about the man or his opinion, but I think it *IS* appropriate for him to put his opinion forward. He's regarded by the only mechanisms we have in this society as one of the best economic advisors on the planet, which kind of makes his opinion relevant. We don't pay him to just shut up, sit in the corner, and crunch numbers - we pay for his considered opinion. (That does not mean that we have to like it)

    Besides, if Greenspan came forward and said something negative about, oh, say Bush's tax cuts (which he did: would we still be saying his opinion was irrelvant? (Tax cuts, while financial, are clearly political. Ditto social security) Or would he be held up as the lone truthful voice in a maelstrom of republican wishful thinking?

    I also don't think that we should be so hasty to assume we know what he means. The media is famous for taking quotes out of context. Is it not possible that a person believes that the fiscal model for Social Security is pathetic, but that the core purpose and service provided by it is a good idea? This situation came up recently in my home political district, where the politicians were using absolutely braindamaged accounting and fiscal policy to fund schools. Standing up and pointing out the absurdity of the *way* the schools are funded should not be interpreted to be a stand against schools. What gets me about Greenspan's quote is that it doesn't address the purpose of Social security, only its financial structure.

    By Anonymous Anonymous, at March 9, 2005 at 7:19 PM  

  • My point was less about his voicing an opinion, which anyone has a right to do, than the way that the media react to his opinion as a result of his position. He started out in this position (Fed Chairman) as a known quantity, i.e., a conservative who would nevertheless keep his own political biases out of the financial advice he gave to the Congress and Executive. As time has gone on, he's been sneaking more and more away from this unspoken agreement, to the point that his political opinions seem to be guiding nearly everything he says. Simultaneously, the mainstream media seems to have taken no notice (this quote was not examined for context because it was nearly ignored--not even appearing in the NYTimes article about the testimony), and quite to the contrary, they seem to have elevated him to the status of a divine oracle. He seems to foster this by couching a lot of his pronouncements in oracular language. However, the general drift of the vast majority of his comments is completely consistently to support the Bush agenda.

    Now you say he really spoke out against the Bush tax cuts on one occasion (I couldn't confirm this because your link didn't work), so doesn't that provide a sort of balance? Well, it depends. The criterion is not whether he was making a political statement that I agree or disagree with, but whether he is making a political statement or an assessments of the financial constraints. If he said "the Bush tax cuts will lead to increases in debt that will eventually result in the US defaulting or adopting 3rd-world-style austerity measures", that would be an assessment of financial constraints and OK in my book. If he said "we should not implement the Bush tax cuts because they will eventually cause austerity measures to be implemented that will hurt the poor in an unacceptable way", that would be political, and would not be acceptable, to me, anyway. Elected officials and their partisan minions can make all the political statements they want in their official capacity, but when an appointed central banker starts doing the same, it becomes problematic in a democracy.

    By Blogger heatkernel, at March 9, 2005 at 11:24 PM  

  • OK, sorry, I was pasting your link correctly. Well, from that short article, which doesn't have any direct quotes, it seems to me that Greenspan was talking about financial constraints on our policy, not what policy should be adopted within those constrains. Still, this didn't stop one senator in favor of the tax cuts from calling for Greenspan's resignation. So the Right doesn't have any problem putting pressure on Greenspan when it feels its ox is gored by his advice. Perhaps that partially explains his recent "drift" away from his original position on the tax cuts.

    By Blogger heatkernel, at March 9, 2005 at 11:29 PM  

  • There can be only ONE valid long-term answer to Chairman Alan Greenspan Conundrum: The Activating Message for X-it & Security.
    Chairman Alan Greenspan is the official political hack of The Partners of the X-it in Washington.

    By Blogger Sir GreenSPan Con-UN-Drum, at March 20, 2005 at 10:21 AM  

  • By Anonymous Anonymous, at February 25, 2007 at 6:43 PM  

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