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Friday, February 11, 2005
Media Matters, Fox News, and FDR.
Media Matters, Fox News, and FDR.
The left-wing propaganda machine Media Matters have been making a fuss over a supposed distortion of a quote by President Franklin Roosevelt in regards to Social Security privatization by Fox News anchor Brit Hume and talk show host Bill Bennett.
While Media Matters is correct in that FDR didn't advocate Social Security being completely replaced by voluntary individual contributions, as they caught Hume stating on his show "Special Report", the fact still remains that Roosevelt did advocate individual accounts that was to be added on with compulsory (in other words, the forced payroll tax) retirement funds.
As Media Matters noted at the top of their story, President Bush's plan is to partially privatize Social Security, not completely privatize it. In fact, the federal government wouldn't be able to completely privatize the system and still give retirement benefits to citizens 55 and older; they'd have to keep a part of the payroll tax (more on that below). Therefore, FDR's quote of individual accounts - albeit he never advocated private investments, as Bennett tried to assert - does go hand-in-hand with Bush's Social Security reform plan.
Also, Media Matters erred in this statement:
The second element, "compulsory contributory annuities," is the backbone of Social Security's current system of guaranteed retirement benefits, which are funded with payroll taxes that employees pay throughout their working years. This isn't the current system. As they state in their piece, the annuities "will establish a self-supporting system for those now young and for future generations." But today's system is set up so that current workers are funding the retirement benefits for current retirees, not to fund current workers when they retire. If that was the case, there wouldn't be a problem with the system, as workers could look forward to the money they put into into the system when they retired. The reason why Social Security will run a deficit in the future - and thus, why reform is being talked about in the first place - is due to the fact that there are more and more workers retiring and thus using more SS funds.
In fact, it could be argued that FDR would not support this "pay-as-you-go" system, as it is in it's current state, just as easily as it is to make an argument that FDR wouldn't have supported privatization. FDR on several occasions meant for future citizens to pay their own way into the system, not to use their money to fund current retirees. As Media Matters stated, FDR's plan wanted retirees when Social Security started to be paid through "welfare pensions funded by the states with federal contributions", not under the same payroll taxes that workers were investing in. The fact is, the system that FDR advocated is NOT the same system that is being implemented today.
Isn't it great when you can use someone's own arguments against them? I thought so. :-D
UPDATE: If you get a chance, check out the conversation that's going on in the comments section of the Media Matters piece. A poster named Walter Hart is simply levelling almost every assumption Media Matters has had and is making a pretty strong argument that Media Matters has distorted FDR more than Brit Hume had done.
UPDATE: My first INSTALANCHE!!
*LOL* Thanks Glen. And first time readers, welcome.
Posted at 05:15 am by Expertise
 | | | jukeboxgrad
February 12, 2005 10:25 AM PST
Pat's exactly right, and more concise than me. But here's my answer.
"I was accused of turning this into a debate of whether private accounts are a good idea"
Not exactly. You were accused of turning this "into a debate of whether private accounts are a good idea" in a lame attempt to avoid dealing directly with the fact that Hume is a liar (something you're still avoiding, needless to say). In other words, it's not what you did, it's why you did it. And your cowardly motive is clear from your cowardly language: "regardless of whether or not FDR supported private accounts." That language creates the impression you were interested in sneaking away from a responsiblity to take a clear position on that fundamental distinction, which is at the core of your original article.
"last post you went on a rant about Bush's plan while discussing pre-paid vs. pay-as-you-go. Hey; to each his own, but I never made an argument for or against either one."
Earlier you said "FDR was against the current pay-as-you-go system." In other words, you raised that subject first, and I responded to your comments on that subject.
By the way, aside from the lack of a voluntary component, the only major difference between what we now have and what FDR envisioned is that we have pay-as-you-go. So to the extent you claim that there's a "connection between FDR and Bush," I can only deduce that you're claiming that they're both in favor of pay-as-you-go. Which is why I pointed out (in what you call a "rant") that what Bush is advocating couldn't be further away from pay-as-you-go.
So your claim that you "never made an argument" with regard to pay-as-you-go seems false.
If a purported aversion to pay-as-you-go is not the connection you have in mind when you claim a "connection between FDR and Bush," all that's left is "voluntary." But no one disputes a very superficial similarity there. Bush advocates a voluntary program as a substitute for SS. FDR advocated a voluntary program as a supplement to SS. This is a long way from providing support for Hume's lie (which you continue to help propagate) that FDR supported "private investment accounts."
"just because you call an orange an apple doesn't make it an apple."
Exactly. Thanks for making my point. Because calling "an orange an apple" is exactly what you, Hume et al are doing.
"FDR never supported private investment, thus it's different than Bush's. Okay."
No, it's not OK, because Hume said "FDR himself planned to include private investment accounts in the Social Security program when he proposed it." That's obviously a lie, and you obviously know that, since you concede "FDR never supported private investment." Nevertheless, your article at the top of this thread still calls Hume's comment "a supposed distortion." But there's nothing "supposed" about it.
Sorry you're having so much trouble understanding that telling the truth is important.
"But what you're missing is the ownership and responsibility detail that comes with having your own account. That's the connection between FDR and Bush that I was emphasizing."
Maybe that's what you're emphasizing (although it's not at all clear what the vague phrases "ownership and responsibility" and "your own account" are supposed to mean), but it's not what Hume said. Hume didn't say "FDR advocated the owenership and responsibility ... that comes with having your own account." Hume said what he said. And it's not a "supposed distortion." It's a lie.
Incidentally, Hume didn't say "FDR advocated the owenership and responsibility ... that comes with having your own account" because most readers/viewers would have responded by saying "what's the point; I do already have my own account." SSA avoids using the word "account," but it does offer personal statements that most people probably think of as a record of their SS "account."
"The fact remains that FDR's belief in individual accounts go hand-in-hand with what Bush is proposing."
If you want to use a vague, ambiguous term like "individual accounts" you have to deal with the fact that most people think they already have an "individual account," as far as the ordinary meaning of those words. When Hume used the falsified term "private investment accounts," it's clear he was shilling for Bush's specific goal of shifting money away from the government and into the hands of Wall Street.
"The fact that you're trying to highlight the difference between government investment (and it is an investment in the sense that the money matures and brings a higher yield than what was placed in it) and private investment doesn't erase that fact."
I see you still can't grasp the fundamental distinction between saving and investing. You're exactly where Bush wants you to be, which is to think there's no difference between a government annuity and a private-sector equity. The former is a form of savings (because it provides a fixed return). The latter is an investment (because it provides a variable return). FDR advocated the former (in both his compulsory and voluntary components). Bush advocates doing the latter at the expense of the former. Nice job spreading government propaganda and fundamental financial illiteracy.
To fail to distinguish between saving and investing is to believe in a free lunch. There's a reason equities can achieve a greater return: they're riskier. Bush is doing everything he can to deny this. In a spirit of snake-oil salesmanship that few of us would tolerate in a used-car salesman, Bush is doing his best to indeed promise a free lunch. That is, he conveys the idea that higher returns from Wall Street (compared with T-bills) are a sure thing: "a personal account, obviously, under strict guidelines of investment, will yield a better rate of return over -- than the money -- the person's money is earning in the Social Security trust." There is no equivocation in that assurance, and I didn't take it out of context. Any stockbroker who similarly omitted the essential disclaimer ("past performance is no guarantee of future
results") would face serious legal and professional sanctions.
You're a case study of how effective Bush is at spreading ignorance and confusion.
(Above Bush quote is here: http://www.nytimes.com/2005/01/26/politics/26TEXT-BUSH.html?amp;pagewanted=7&ei=5070&en=4de8b46cfcb3024b&ex=1108184400&pagewanted=print&position=) | |
| | | pat m.
February 12, 2005 09:48 AM PST
"*LOL* It's funny Juke; I was accused of turning this into a debate of whether private accounts are a good idea, yet in that last post you went on a rant about Bush's plan while discussing pre-paid vs. pay-as-you-go. Hey; to each his own, but I never made an argument for or against either one."
LOL, indeed Expert. You repeatedly try to insert some issue about whether FDR would have supported the current pay-as-you-go system into a discussion about whether Bush's private account plan bears any similarity to FDR's voluntary contributory annuity plan, then when Juke explains why that issue is irrelevant to the discussion, you imply that HE is trying to change the subject. Pretty lame attempt at misdirection, Expert.
"As far as government securities vs. private investment is concerned, just because you call an orange an apple doesn't make it an apple. The argument you're making is still the same...FDR never supported private investment, thus it's different than Bush's. Okay. But what you're missing is the ownership and responsibility detail that comes with having your own account. That's the connection between FDR and Bush that I was emphasizing."
And what you're missing is that the "ownership and responsibility detail that comes with having your own account" was not a feature of FDR's proposed voluntary contributory annuities. As is explained at the link Juke provided (http://www.ssa.gov/history/voluntaryannuities.html), FDR's proposal explicitly provided that "The funds involved in this program would be deposited in the old-age trust fund and the payments would be made from this fund." Where's the "ownership and responsibility detail" in that? Had FDR's voluntary annuity program gone into effect, the participants in that program would have had no greater ownership or responsibility over the funds they contributed than any participant in the mandatory program would have had over the payroll taxes they were required to contribute. Thus, the "connection" between the FDR and Bush plans that you claim to have shown does not exist.
"Therefore, I'm not distorting anything."
Sure you are. But I'll give you the benefit of the doubt and assume your distortions are unintentional and the result of not knowing what your talking about. :)
"The fact remains that FDR's belief in individual accounts go hand-in-hand with what Bush is proposing. The fact that you're trying to highlight the difference between government investment (and it is an investment in the sense that the money matures and brings a higher yield than what was placed in it) and private investment doesn't erase that fact."
FDR believed in voluntary contributory annuities, which are not even remotely the same thing as individual accounts of the type proposed by Bush. The fact that you keep trying to say the two things are similar doesn't make them similar. | |
| | | Expert
February 12, 2005 02:41 AM PST
*LOL* It's funny Juke; I was accused of turning this into a debate of whether private accounts are a good idea, yet in that last post you went on a rant about Bush's plan while discussing pre-paid vs. pay-as-you-go. Hey; to each his own, but I never made an argument for or against either one.
As far as government securities vs. private investment is concerned, just because you call an orange an apple doesn't make it an apple. The argument you're making is still the same...FDR never supported private investment, thus it's different than Bush's. Okay. But what you're missing is the ownership and responsibility detail that comes with having your own account. That's the connection between FDR and Bush that I was emphasizing.
Therefore, I'm not distorting anything. The fact remains that FDR's belief in individual accounts go hand-in-hand with what Bush is proposing. The fact that you're trying to highlight the difference between government investment (and it is an investment in the sense that the money matures and brings a higher yield than what was placed in it) and private investment doesn't erase that fact. | |
| | | jukeboxgrad
February 11, 2005 11:19 PM PST
"Now, it seems as if we have a 'half-empty, half-full' situation in which you two are arguing that it bears no resemblance because FDR never advocated private investment for SS, and I'm arguing that it does because FDR would never support the current pay-as-you-go system, supported voluntary investment, and believed in workers investing in their own retirement rather than paying for current retirement benefits."
You're completely mixing up apples and oranges. One issue is the question of fully pre-paid vs. pay-as-you-go. Another issue is the question of the use of annuities offered by the government vs. the use of equities offered by Wall Street. Bush would like people to be totally confused about these distinct issues. In your case, he has clearly succeeded.
As far as fully pre-paid vs. pay-as-you-go, it's true that FDR intended the latter, and what we have is closer to the former. There's an interesting discussion to be had about how that came about, and the strengths and weaknesses of the two approaches.
If you (like FDR) prefer fully pre-paid to pay-as-you-go, it's hysterically funny that you like Bush's plan. Compared with the current system, as far as this issue is concerned Bush's plan is like going from the frying pan into the fire. That's because he proposes borrowing a trillion or two. In other words, his system is more like fully post-paid, not fully pre-paid.
Bush proposing a plan that requires this kind of borrowing (on top of a national debt that's already close to 8 trillion) is simply a way of stealing some money from my back pocket so he can place it in my front pocket. No. It's more like stealing some money from my kid's back pocket so he can place it in my front pocket. Actually, it's more like stealing some money from my kid's back pocket so he can place it in the front pocket ot a certain class of people who are currently heavily invested in equities. Those folks can't wait to sell some of their holdings to a huge new class of customers Bush is intent on creating. Nice work if you can get it.
Anyway, fully pre-paid vs. pay-as-you-go wasn't the subject of Hume's remark, which is what I thought this thread was about. Hume said "FDR himself planned to include private investment accounts in the Social Security program when he proposed it." But annuities offered by the government are fundamentally different from equities offered by Wall St. FDR envisioned the former. Bush promotes the latter. FDR's vision of annuities offered by the government is nothing like the private-sector equity investing implied by Hume's phrase "private investment accounts," and embodied in Bush's plan. You, Glenn and Hume et al would like to pretend these fundamental distinctions mean nothing.
You claim FDR "supported voluntary investment." No. He supported voluntary saving. The difference between saving and investing is crucial. There's a place for both, but the latter does not replace the former. Bush, unfortunately, is encouraging us to believe there's no difference between saving and investing (which is the equivalent of promising a free lunch), and he's encouraging us to do the latter at the expense of the former.
This distinction between saving and investing is exactly the equivalent of the distinction between the use of annuities offered by the government (offering a fixed return) vs. the use of equities offered by Wall Street (offering a variable return).
If you think comparing these two is like comparing a half-empty glass to a half-full glass, that means you see no difference between a variable return and fixed return. I sure would love to sell you some securities. Stocks, bonds, what's the diff, they're all the same to you. There's a reason why stocks can provide a higher return. They're riskier. You don't get something for nothing. There's a reason why it's called Social Security, not Social Bingo Night.
Like Hume, you're still fundamentally misunderstanding and distorting what FDR stood for.
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| | | Expert
February 11, 2005 07:46 PM PST
Pat, apology accepted.
Once again, I'm not switching the debate. The debate (between Juke and I in the comments section) was about how similar the ideas that FDR and Bush had. No where in the comments section did I try to change the subject into an argument for or against private accounts.
Now, it seems as if we have a "half-empty, half-full" situation in which you two are arguing that it bears no resemblance because FDR never advocated private investment for SS, and I'm arguing that it does because FDR would never support the current pay-as-you-go system, supported voluntary investment, and believed in workers investing in their own retirement rather than paying for current retirement benefits.
When I said "Regardless of whether or not FDR supported private accounts", that was not an attempt to change the subject. I was separating the differences FDR's plan and Bush's plan have from the simularities.
So to summarize for both of you, it comes down to this:
1. FDR and Bush believed workers should invest in their own retirement instead of funding current retirement benefits. FDR was against the current pay-as-you-go system, and when Social Security was started retirees were paid through the state governments with the help of federal funding, not through payroll taxes, as stated by MMFA.
2. FDR and Bush believed workers should be able to control their own retirement benefits by implementing voluntary accounts that could increase the amount of money they get once they retire.
Does that help clear things up? | |
| | | jukeboxgrad
February 11, 2005 06:36 PM PST
"it goes hand-in-hand in the fact that Roosevelt wanted a system where people invested in their own retirement, and wanted them to be able to add on to it voluntarily"
You're basically saying they go hand-in-hand because they both have something to do with "retirement," and they both incorporate an element that's "voluntary." Very impressive. Meanwhile, you ignore the very substantive differences I described.
And Pat's right: when you say "regardless of whether or not FDR advocated private accounts," it's obvious you're mounting a lame attempt to change the subject because you've realize the facts aren't on your side.
"I stated precisely how Bush's plan bore more resemblance based on principle than today's system does."
I must have missed something somewhere. Aside from the use of the words "retirement" and "voluntary," what's the basis for your statement about "more resemblance?"
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| | | pat m.
February 11, 2005 06:04 PM PST
Thanks for responding.
First off, I'd like to apologize for the harsh tone of my first post - you've been kind enough to respond civilly and I'm usually less snarky (I think my aggravation is more with Prof. Reynolds who provides no outlet to challenge much of the crap he posts.)
Nevertheless, I still think you're both totally wrong here and trying to switch the debate. :) First, please explain how jukeboxgrad (and I) are wrong about the fact that Bush's private accounts bear no resemblence to the voluntary contributory annuities FDR was talking about. Further, how does Bush's plan supposedly bear more resemblence "in principle" to FDR's --- while you claim that you stated somewhere "precisely how" this is the case, I sure don't see it. Finally, I thought the whole point of your post was to show that there is at least some support for the notion that FDR advocated private accounts. Given this fact, I think some people might fairly view a sentence beginning with "Regardless whether or not FDR advocated private accounts," as an effort to change the subject.
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| | | Expert
February 11, 2005 04:39 PM PST
Wrong, Pat. I stated precisely how Bush's plan bore more resemblance based on principle than today's system does. Also, I never tried to switch the debate to whether private accounts were a good idea or not. We are talking about historical accuracy and consistency. If MMFA wants Hume to correct it's comments, then they should correct theirs. | |
| | | pat m.
February 11, 2005 04:29 PM PST
It's a shame that your first INSTALANCHE!!!!! has to be for a post that jukeboxgrad has completely destroyed. Don't you think it would be more intellectually honest if you admitted that FDR's proposed "voluntary contributory annuities" bore no resemblance to Bush's proposed private accounts, and thus, the main thrust of your post is wrong, instead of trying to switch the debate over to whether private accounts are a good idea? Just a suggestion. | |
| | | Expert
February 11, 2005 02:31 PM PST
Juke, it goes hand-in-hand in the fact that Roosevelt wanted a system where people invested in their own retirement, and wanted them to be able to add on to it voluntarily, as I stated at the bottom of the piece. That money is their own money It would enhance their personal SS package when they retired.
Regardless whether or not FDR advocated private accounts, the fact remains that individual citizens should have the right to control their own SS accounts, in which the Democratic Party has long opposed. It's also contradictory to criticize media outlets for using FDR to push privatization while using him under the same breath to defend the current system, which is one that he more than likely would not support (and I only say more than likely because he is dead.) | |
| | | jukeboxgrad
February 11, 2005 02:02 PM PST
"albeit he never advocated private investments, as Bennett tried to assert"
It's nice that you acknowledge this. You should give a clue to your pal Glenn Reynolds, who has written several posts that obscure and distort this crucial fact.
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