I was given an open-ended invitation by praktike to comment on Charles Krauthammer's unwise excursion into economic and fiscal policy via the Social Security debates. Given the effective take-downs of Krauthammer by Noam Scheiber and Matt Yglesias, I was going to pass. Their pieces present, however, that nagging "what should be done" problem that seems to bedevil the Democrats. As prak has sadly remarked, advice to the Democratic party has turned into a "sorry little cottage industry," and best to avoid getting sucked into the muddle. But it was a softball all teed-up, so how could I resist?

I both agree and disagree with Scheiber and Yglesias -- certainly agree that Krauthammer should stick to his knitting and not try to talk about something which is for him a foreign language. Disagree, on some of the grounds for their take-down.

More broadly, however, I think both are overlooking the opportunity that taking apart Krauthammer presents. It's child's play to dismiss his feeble "logic" in arguing the specifics of Social Security reform. But note that Krauthammer wasn't really making a technical argument, he was making a political argument, about the poor picture Bush chose to paint in the SOTU. And Krauthammer's "logic" opens up a much broader political argument that I think opponents of Bush-nomics would be wise to start to make.

First, on the specifics of the Social Security arguments, as I've indicated previously, I'm of the old-fashioned "cash-flow" persuasion when it comes to analyzing Social Security. It's a pay-as-you-go system of social insurance that provides benefits to a much larger portion of the population than would be necessary in a pure "safety-net" system. The broader coverage give the American people a sense that they are all participants in the same social contract. It's neither a retirement program nor a ponzi scheme. I repeat my mantra of the three things to keep in mind when looking at all the plans and arguments from all sides of the cacophony that passes for "debate": there is no crisis, there is no trust fund, there is no free lunch.

The Trust Fund is essentially a useful heuristic device. Yes, the federal government has an obligation to provide the trust fund with cash when the trust fund is called upon to pay out benefits, and failure to meet that cash call would be a default on government obligations. But since Congress can change the benefits and thereby change the calls on the trust fund, everybody's "property interest" in the trust fund can be eliminated with one set of votes and a stroke of the pen.

Over the past decades, as the Trust Fund built up a "surplus," and in future decades, when the "surplus" will be paid down, you can see what's really going on by looking at the federal government's overall receipts and outflows, as well as how the government finances its overall net negative cash flow -- including payroll taxes and Social Security benefits in the mix. The Trust Fund contains government obligations (please let's not get into central bank obligations vs government securities) that, in the absence of the net positive cash flow from Social Security (the excess of revenues from the payroll tax over the benefits being paid out), would have required the government to fund itself in some other fashion. It could have raised taxes, or it could have gone to the public markets to flog its paper. The net positive cash flow from the pay-as-you-go system financed current government expenditures without having to resort to either option.

All that happens as the revenues from the payroll tax cease to cover all the benefits -- as we start having a net negative cash flow -- is that the government has to go finance itself some other way. That's true, whether the government expenditure to be financed is the salary of a Marine, or payment to run the judiciary, or money for highways, or a welfare payment, or a grant to the states, or a disability payment under Social Security. As the net positive cash flow declines, and eventually reverses to a net negative cash flow, the amount of financing the government has to raise from other sources (taxes or selling paper in the markets) increases. We can find financing for those other amounts, or we can reduce our expenditures. If we decide to finance those amounts, one possibility among an almost mindboggling range of possible options is to increase payroll taxes. If we decide to reduce our expenditures, one possibility among an almost mindboggling range of options is to lower Social Security benefits. We can choose to do either, neither, or both. They have no necessary relation to each other.

For the Democrats, there are lots of ways of talking about financing and timing issues in what has been a fight against an amorphous set of suggestions that would (1) reduce taxes received by the government (diverting a portion of payroll taxes into retirement savings plans), (2) reduce benefits paid by the government, and (3) dramatically increase federal borrowings. Why have the Democrats remained focused on the Trust Fund? In part, because they had invested so much political capital in the whole notion in the first place in the late 90s and during Gore's presidential campaign.

The "lockbox" was a political gimmick that made a great deal of sense at the time. It was designed to deal with the politics of surplus budgets -- to protect hard won fiscal sanity from both the tax slashers and the spendthrifts. Clinton's political instinct has been proved to have been sound, since his successor has managed to be both. The problem the Democrats have is that they got caught in the "defense of the Trust Fund" rhetoric from the late 90s. And hence the meaningless debate about whether the Trust Fund will be in crisis in year 2042 or some later date or never.

That being said, Krauthammer doesn't do a very good job of explaining why you should ignore the Trust Fund, and, if so, what really should be the grounds for your analysis. By arguing that the Trust Fund isn't the problem -- that instead it's 2018 when the net positive cash flow reverses -- then he's adopting a cash-flow analysis that puts the Social Security issue into the broader framework of overall fiscal policy. And then he's got to stick with it for all purposes. You can't just sort of pick and choose when it suits you as Krauthammer has done.

He's so out of his depth that he doesn't even handle the sleight-of-hand well the way a pro like George Will might. The second half of Scheiber's piece is particularly good on the whiplash you get trying to follow Chuck's "logic." But if we were to pursue Chuck's initial logic, then we'd find that he's actually created a much bigger problem for himself. It takes us to the heart and soul of Bush-nomics: the gigantic, unsustainable fiscal deficits.

When you look at Social Security as part of the broader fiscal system, President Bush is indeed right -- there is, in fact, a crisis on the horizon, and a horizon that's far closer than 2042, or even 2018. Yet the Democrats haven't made hay with this logical response to the Social Security proposals, apart from occasionally remarking that the real crisis is in health care not Social Security. Why? Putting Social Security into the broader debate about fiscal policy puts Social Security on the same playing field as discretionary spending. And given the radical nature of the first Bush Administration when it comes to fiscal policy -- and a GOP-controlled Capitol Hill -- the Democrats quite understandably haven't been willing to risk that.

The interesting thing is, on the GOP side, President Bush seems to have come closest to acknowledging my three-part mantra: he's backing away from "crisis," he maintains that the Trust Fund is notional, and he's started to recognize that taxes might have to be increased and benefits reduced. That, of course, hasn't stopped him from peddling the ideological goal of privatization, even though it's increasingly been proved by the Democrats to be a total nonsequiteur to the "problem" as posed by Bush.

Since the crisis gimmick is blowing up in the GOP's collective faces, and they're starting to have to make tacit admissions about the costs of the changes in terms of taxes, benefits and transitional borrowings, they're now looking for diversionary tactics. This means, for the Democrats, that the New Deal is safe if all the Bush Administration can do is divert the "debate" to such worthy arguments as that AARP is just a bunch of godless, pinko, homo-loving, traitorous Islamo-fascists. Maybe there's an audience for that approach that isn't already in the President's camp on this one, but it's not a very big one.

The GOP will, of course, continue the obfuscation, prevarication and out-and-out lies about no tax increases -- even as their plans begin to show some tax increases -- and no benefits cuts -- even as the benefits are cut. But those tactics can, in fact, be countered by the Democrats, as the Republicans showed in the old health care debacle of the 90s. Bush certainly has all the powers of the presidency at his disposal, and the shameful ignorance of reporters spitting back GOP talking points certainly gives him a free ride. Nonetheless, it may simply be sufficient to raise serious questions -- enough of a "he-said she-said" that puts the GOP claims in a questionable light -- to make a lot of GOP Senators & Congressmen uncomfortable in their home districts.

I take much more seriously Matt Yglesias' intuition that the Big Lie that's coming is that libruhls are just defending their narrow little partisan interests and don't have any alternative -- that the Democrats are the party of the past with no vision for a brighter tomorrow for the generations to come, yadayada.

Remember when all this started, the Gingrich strategy was -- hey, even if we don't win in the sense of passing legislation, we win by beating up on the Democrats as the party of the past without a program, without a vision, etc. The thing that's shifted that strategy was Bush's decision to showcase Social Security and make it where he intends to "spend" his "mandate" capital. But watch it turn from a test of Bush's presidency to a beat-up-on-the-Democrats the moment that it really looks like the whole thing is DOA.

This is the hard one for Democrats to handle, because it's a lot easier to keep united in opposition to a dreadful proposal. Unity's a lot harder to maintain once discussions open about what would make sense. And we know that, when the final "negotiations" are conducted and the devilish details are defined, there won't be any Democrats (and very few moderate Republicans) in the room.

I think the GOP is indeed correct that we're not getting a clear vision of the future from the Democrats that's relevant to the changing structure of our economy and population. That's not solely the fault of the Democrats. The "new vision" being offered by the hard-right ideologues is no more in touch with today's and tomorrow's economy and society than FDR's version of the New Deal. Given the enthusiasm with which the Bushites are trying to dismantle the New Deal as it has evolved over the decades, a good deal of core defense by the Democrats is in order. But it is certainly time to start looking at the specifics of how the New Deal social contract may need broad adjustments, rather than constant tinkering at the margins.

That's why I've thought for some time that the Democrats should shift to offense with a combined package -- oriented around the new global economy and the coming fiscal crisis. Among the features, we need to redefine Social Security more transparently than it is now (it should probably become a narrowly focused social insurance combined with a modest mandatory defined-benefit retirement savings arrangement); to avoid making the same mistake we did with the S&Ls -- creating a big crisis by decades of temporizing -- we need a more orderly phase-out of the rapidly-eroding defined-benefits pension system (especially the collapsing PBGC which can't be addressed in isolation from the broader problem of defined-benefit schemes); and we need to sever the employer-connection to the heath care financing system.

A "package" approach would also allow Democrats to reposition themselves on the entire fiscal policy debate. For purposes of discussion here, let's not tackle the tax side of the equation, just the spending side. Isn't it time the Democrats outlined an overall shape of what our fiscal position, on the spending side, should look like? Isn't it time we revisited what constitutes discretionary and non-discretionary spending?

We know Medicare/Medicaid can't go on for ever as is. We know that some adjustments to Social Security are going to be appropriate for higher-income wage earners in the coming decades. We know we can't keep spending on a "new" military at the planned rate and still keep indefinitely all those boots on the ground in foreign climes. We know we can't keep subsidizing agriculture or providing corporate welfare (yes, I now that's usually through tax "relief", but let's recognize it should be put on the same basis as other spending programs). We know we can't keep up with the absurdly growing and pathetically ineffective spending patterns of DHS.

We need priorities, we are going to have to make trade-offs -- those should be based on principles that are consistent with the sort of economy and society we're going to have in the coming years, not just defensive maneuvers to beat back the worst of what the GOP keeps coming up with.

Back to focusing only on the "entitlements" part of the federal fiscal structure (not just social security put also retirement more broadly, health care etc.). Fundamentally, we need a clear rethink of (1) what's going to be the safety net -- for the vissicitudes of life when people get really trapped with no place to go; (2) what's going to be socially insured and not subject to market fluctuations so the government isn't going to get left holding the bag (by socially insured I mean it can be in either a government system a la Social Security or a private system, but people will be forced to save/insure for this stuff and the main terms and the population-wide pooling will be dicated by the government); and (3) what stuff will be left more to personal responsibilities and the marketplace but that it makes sense for the government to play an intermediation/regulatory role in order to overcome major information asymmetries.

There's lots of good technical stuff in specific proposals floating around from a whole variety of thinktanks and policy wonks. But all those nice details, the parsing of which make the hearts of wonks beat faster, must be translated into an easy-to-grasp intuitive picture of what the new New Deal would look like. I'm suggesting an opposite direction -- sketch the broad outlines of a new New Deal, and then play with the policies to fit the outlines.

This rethink should be congenial for international business, which needs a safe, secure, large middle class at home but that desparately wants to shed the pension and health care costs that are distorting competitive position internationally. Isn't there anyone in the union movement who can talk with the guys who run GM, Ford et al? As I've said before, we need someone to write the "What's the Matter with Kansas?" for corporate America, because their alliance with the GOP is otherwise mystifying. Getting changes in tort law and bankruptcy rules, with some further dilution of union rights, just isn't a big enough return for what the Bushites are doing to our position in the global economy.

The insane irony is that the radical Republicans think they're going to get a brighter future by finally winning an anachronistic sixty-year-old battle, and the Democrats are defending the present. Neither party is offering a realistic picture of why we need to change and where we actually need to go.

Just a suggestion: there's a reason why lame ducks are good things for the opposition. The opportunity is now, not three years from now. And there ends my contribution to the cottage industry.

You have got to be kidding me.

This is the anti-AARP campaign that the Times wrote about this morning:

Does this make any sense to anyone? I mean, it's like a parody of a right-wing smear campaign!

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{update Feb-21-05 9:20PM} by nadezhda

And does this make any sense as a hot-selling "I heart Bush" poster at the recent CPAC bash?

My first glance, before I read the article, was that it was the newest version of "Yankee Go Home!"

Maybe there's a whole new aesthetic out there I'm missing -- kind of a socialist realist thing? -- that floats peoples' boats, gets a creaky old endocrine system loosened up and the adreneline and testosterone flowing again? Though so far the only common aesthetic thread I've discerned are "this has gotta be a send-up" and "this is sooooo tacky."

Stick to intraneoconservative food-fighting and liberal strawman-demolishing.

Noam and Matt do the dirty work.

Our august host may differ here.

Nice:

Venezuelan President Hugo Chavez has said he believes the US government is planning to assassinate him.

"If they kill me, the name of the person responsible is [President] George Bush," Mr Chavez said.

Mr Chavez - who offered no evidence to back his claim - said any attempt on his life would backfire and threatened to cut off oil supplies to America.

He was apparently reacting to growing criticism by top US officials of his left-wing government.

Can we figure out a way to talk this guy down?

R.I.P. (story)

Bob of Unfogged, whose handle is strangely neithed unf nor ogged, blogs about okonomiyaki.

If you aren't eating okonomiyaki every day, you should be. Sadly, here in Pittsburgh we don't have such delicacies.

One funny thing about Japan that most Americans may not realize is that Japanese restaurants are mostly divided up by the type of cuisine in which they specialize. So the very idea of a "Japanese restaurant" is kind of foreign to Japanese, because they have separate sushi joints, udon joints, tempura joints, etc. I'm sure our more nihonophilic MC_Masterchef can expand on the finer points here.

When I was in Tokyo I was even taken to a "garlic restaurant," which I had viewed in advance with some trepidation. It turns out that my hosts were simply talking about an Italian place, however, which was a big relief.

Well, I sure don't, obviously. But if anyone does and can translate this article for me, I would be extremely grateful. Babelfish gives me the gist, but I'm looking for something a little more precise (and less stilted that what translation bots give me), since I'm looking to use it in a paper. Your help will be duly cited and greatly appreciated.

Danke!

Stephen Hadley, briefing the press on President Bush's itinerary for his round of European fence-mending:

On Monday afternoon, the President will deliver a speech at the Concert Noble. The speech will focus on his vision of a united transatlantic community, working together to promote freedom and democracy, particularly in the broader Middle East. The speech will build upon the President's inaugural address and State of the Union remarks. It will be an opportunity for him to communicate directly with the people of Europe, and will show America's desire to work in partnership with Europe, based on common values, to advance the cause of freedom.

To be followed by a working dinner with Chirac.

This could be interesting. Get ready with your text parsers, your dog-earred copies of the inaugural and the SOTU, and tune your browsers to your favorite Continental rags.

This item, from a psychology prof at Univ of Toledo, showed up in Altercation's mailbag as part of an ongoing discussion of "how can creationists exclude scientific evidence" ? The full reference for the article is Niebauer, C., Christman, S., Reid, S., & Garvey, K. (2004). "Interhemispheric interaction and beliefs on our origin: Degree of handedness predicts beliefs in creationism versus evolution." Laterality, vol. 9, pp. 433-447 [sub reqd].

[O]ur work shows that strong right-handedness, relative to mixed- or inconsistent-handedness, is associated with an increased tendency to endorse literal creationist myths. In other words, our research indicates that the more strongly right-handed a person is, the more likely they are to endorse literal creationist accounts of the origin of species.

It turns out that a growing body of neurological evidence shows that, while the left hemisphere of our brain maintains our current beliefs about the world, the right hemisphere is responsible for playing "Devil's Advocate": detecting anomalies with those left hemisphere beliefs and forcing an updating of beliefs when appropriate. In order for this belief updating to occur, the right hemisphere has to interact with the left, and strong right-handedness is associated with decreased interaction between the two sides of the brain (hence, the lesser degree of belief updating in strong righties).

While there is certainly more going on in determining people's beliefs about the origin of species than simply one's degree of handedness, I thought your readers might like to learn about a neurological, brain-based factor that is clearly related to whether one believes in evolution versus creationism.

- Stephen Christman, Ph.D.
Professor of Psychology
University of Toledo

Do we now have a neurological explanation for how some people can maintain, seemingly forever, levels of cognitive dissonance that have other peoples' heads exploding? Thinking in evolutionary psychology terms, and considering some of the advantages Malcolm Gladwell outlines of being able to apply lightening-fast heuristics, one can see certain adaptive benefits to maintaining cognitive bias.

So maybe it's a left-right thing after all?

Actually, I imagine not. Conservatives and traditionalists aren't the only tenacious upholders of fundamental "truths" that fly in the face of reality.

But it does get one ruminating. Both GHW Bush and Clinton -- strong lefties. Hmmm....

I seem to be on the same wavelength frequently with Stephen M Levine of the Old Town Review Chronicles. In this case, my attack on BushLite -- the use of the neocon mindset and language to frame liberal foreign policy.

Levine explains how attachment to the content-free but high-sounding moral sentiments of the neocons -- whether engaged by right or left -- impedes clear analysis, judgment and policymaking with respect to US policy toward Syria in the aftermath of the Hariri assassination. Though he doesn't frame his remarks in BushLite's terms of "democracy" and "freedom," he argues that such an approach -- of privileging moral sentiment over principles and analysis -- will often get in the way of "doing the right thing." [BTW -- I'd argue that the same sort of blindness is produced by the moral sentiments of those who see the Israelis as "the enemy" of liberty.]

Since Levine's remarks can't be understood out of context, and in any event the Syrian situation is certainly topic du jour, here's the background. Emphasis is mine.

Discussing Israel and Syria, Levine stated that "whatever is called the left" should support the Lebanese people, together with the diplomatic isolation of Syria by the US and France, until Syria is pushed out of Lebanon.

This "anti-Syrian" view (which is also consistent with the Bush Administration's stated policy to ratchet up diplomatic pressure for Syria's immediate withdrawal) was greeted by some surprise by Morgan Feis, a co-blogger. Levine explains:

The reason: because I questioned whether an alliance between the US and Israel to secure Israeli dominance of the region is a good idea. Basically, I questioned whether the strategy enunciated in the infamous ‘Clean Break’ policy paper is the right one. Morgan responded to this by asking whether I would rather see Syrian dominance of the region instead of Israeli dominance.

Levine continues:

I think this response captures something important about the way policy in the Middle East is discussed by neo-cons and certain liberal hawks. For these thinkers, political calculation is one that concerns, above all, the content and quality of one’s political opponents. One does not look at what is the right thing for us to do, one just looks at who is a friend or an enemy. (For certain delusional liberal hawks, the friend enemy distinction maps onto a distinction between morally good regimes and morally bad one’s. This allows them to moralize that which in essence is political).

By this logic, of course one supports Israel and not Syria. But this logic of analysis is totally bankrupt because it has no substance: the question is not whether to support Israel over Syria but a question of how to support Israel. Perhaps supporting Israel means helping Israel recognize that a policy of regional dominance is foolhardy. Perhaps it means trying to achieve a regional piece [sic] even if this means breaking bread with some less then savory characters. Of course, the adjudication of friend and enemy is an important part of the equation that goes into political judgment. However, when it becomes the almost single source of judgment, it clouds clear thinking.

This, of course, is fine for the political forces that take advantage of intellectuals whose critical faculties are paralyzed by the polarizing effect that this logic introduces into political discourse. Indeed, this is the secret of success for extreme nationalist or populist movements. Hopefully, our liberal intellectuals will in the future be better able to resist this demented political logic.

Good guys-bad guys; democrats and tyrants; freedom on the march: this is the language of non-thinking and non-policy. Of relegating the "how" -- the important stuff that makes or breaks policy -- to the realm of "my way or the highway." Of self-justification wrapped in language that deflects, dismisses and denigrates open and serious discussion. Of mass mobilization.

Levine's arguments reinforce my quarrel with Beinart and TNR's constant calls to put "liberal values" of democracy and freedom at the centerpiece of foreign policy.

The road they propose is simply illiberal -- based not only on elites calling the shots, but insulating their real strategies in ersatz moral trappings. And if the trappings aren't ersatz -- if they really will dictate policy -- then they'll lead to very bad policymaking. As Levine points out, they interfere with any clarity of assessment of reality and analysis of options.

I would add to that list -- the more successful you are in mass mobilization through defining enemies and stirring high moral passion, the less latitude you will enjoy in decision-making. You become prisoner of the political dynamics you have unleashed.