Saturday, January 15, 2005

Social Security as social engineering

Andrew Sullivan points to a fact so obvious it is surprising that no one has mentioned it before. It is expressed succinctly by Jonathan Rauch writing in National Journal.

...what Bush and the Republicans are focused conservative social engineering on the grandest possible scale.

The 2004 exit polls suggested, to many conservatives, that "moral values" won the election for Bush. It may seem odd, then, that his boldest post-election priority is not abortion or gay marriage or schools, but Social Security. The key to the paradox is that Social Security reform is not, at bottom, an economic issue with moral overtones. It is a moral issue with economic overtones.

A frequent complaint aimed at those of us on the left is that we want a "nanny state," a place where (try to hear a sneering sound as you read it...) thu guuuverment will take care of everybody from the time they are bawrn until they die.

The alternative, of course, is an Ayn Rand utopia in which people are richly rewarded for their cleverness, hard work, business acumen and - most of all - their good choices. Of course not everyone will be at the top. There isn't enough room. But those who fail to make it can either get by on the level that they achieve below the top, or depend upon the charity and voluntary contributions of others to maintain them. Totally helpless sorts will be cared for by family members or churches, those who violate the rights of others will pay heavy fines, or rot in jail or be executed outright...on and on it goes, skating nearer and nearer to eugenics.

Rant ended, almost.

We have conventional savings accounts. We have traditional IRA's. We have Roth IRA's. We have 401-K's and their cousins in the "not for profit" sector. But none of these is adequate. Now we need "private Social Security accounts".

The simple fact is, and this is spelled out clearly in the article cited above, is that those of us who have been contributing to Social Security for the last few decades, both employers and employees alike, have parted with more than enough taxes to do the job that we call "Social Security" for many years to come, including those of us labled "the baby boom", thank you very much. We - the baby boom, that "problem" of the future - have already contributed more than enough to see us through retirement. There is and has been a surplus. Read that again. There is and has been a surplus collected, more than enough to cover the needs of the Social Security Administration and all its beneficiaries.

The real issue is not Social Security benefits. The real problem is that the surplus has been spent, replaced by US Government Bonds, which are the way that government writes I.O.U.'s. That didn't just start last week. It has been going on for a long time. And it continues even as we speak. And it will continue until those we send to Washington to steward our affairs get real about whose money they are spending and where it is coming from.

Comes now the notion that in addition to all the other ways available for working Americans to save, we need "private social security accounts." The only benefit I can see is that it will be the first step in a progressive sequence of moves that in time will earmark every dollar taxed as "social security" for specific individuals, making it impossible for Congress to get it's hands on Social Security funds, because there would be no "surplus". All of it would be designated for specific individual accounts. (And their heirs?)

The more I think about it, the more I come to the conclusion that it is the job of Congress to cut spending, not figure out ways to blame the Executive branch for what their predecessors have done in the past. At the end of the day, it is the job of the Executive branch to spend the money, but it is the job of the Legislative branch to tell him how to do it. I see what is happening nationally, politically, as an extension of what I experienced for thirty years in the business world. I was in management. I was not an administrator or an owner. My job was to make the money. Somebody else had the job of spending it and setting corporate policies. (Oh, I got to pick vendors, hire people, write schedules, determine wages and all that. But the real money - profits - the real way we sweeten the pie, was spent by the big shots.) In the same way that the Executive Branch "executes" policy that is set by the Legislative Branch, my job as manager was to implement policies set by the company.

Years ago, during one of those times that we all experience when we get close to burn-out and pissed off at the company, I set out to make myself a better informed manager by way of seeking a better job. I didn't succeed in changing jobs, but I did get better informed. Part of what I did was subscribe to The Harvard Business Review for a year or two. I learned that among their treasured and often cited monographs (That's what they call them. Monographs. It sounds more authoritative, more important.) was entitled Good Managers Don't Make Policy Decisions. Without going into too much detail, it underscores the difference between managers and administrators, making the point that it is the job of managers to execute policies made by someone else, and do it professionally, willingly and without undermining the spirit of the policy by simply going through the motions.

So a google search and you will get a spate of references. I was surprised to find the article so widely known. Too bad more people don't get the idea, because it is so simple. The title says it all. George Schultz referred to this article in a speech two years ago. (I didn't know about this. It was one of the Google results. White House website, no less.)

Now let me step back a minute and let me tell you about an article that a faculty member at the university Chicago wrote when I was dean there. He sent it in and it was printed in the Harvard Business Review. Hard to swallow as a Chicago person. [LAUGHTER]

The article was entitled, "Good Managers Don't Make Policy Decisions." That was a catchy title. And he wasn't arguing that there aren't big decisions that people have to make. But he was saying that quite often you're here, you're at A and you look the situation over and you know you'd like to get to B.

And if you announce that, it seems so far out of place that it doesn't do you any good. But still you know that you want to get to B. So, he says, a good manager doesn't do that.

What does he or she do? Well, what do you spend your life doing? What do you spend your day doing? Most of the time during the day, you're coping with some problem or some opportunity that comes across your desk and it's a fire you've got to put out or it's a problem that's arisen or you see a little opportunity here.

And the so-so manager just puts out the fire. The good manager -- this was the point of the article -- the good manager knows he trying to get from A to B. And, so, for every little thing you're doing, you can slant it a little bit.

And all of a sudden, you're at B. How did we get here? We got here by coping -- is what he called it. So my message here is it seems to me the President has basically laid down a strategic idea, accountability. Test it according to this idea a little bit. And as you're coping, keep slanting things in the direction of making the system more accountable. And in doing that I think you will be furthering the President's objectives and be true to the kind of thing that he's trying to bring about in his Presidency.

He was talking to the cabinet, getting them to understand that it was their job to execute policies of the president. But the big picture of government is that it is the President's job to execute the policies of the Legislature.

I submit that the President, in proposing individual Social Security accounts, in deliberately lying about the reasons, is only doing what he has to do to force Congress to do what should have been done long ago: stop misappropriating our tax money in ways we did not intend. Or, as we say in the South, stop pissing on our leg and trying to tell us it's raining.


I don't know if what I just wrote is right or left. And I don't really care.
One of the beauties of blogging is that I don't have to be beholding to anybody, although like Armstrong Williams (or unlike, now that he has apologized -- but he never said he returned the money) I will be pleased to write practically anything for the right price.
I have a lot of experience as a manager executing policies I don't entirely like.