Alex Blaze

Cultural differences

Filed By Alex Blaze | July 11, 2008 3:00 PM | comments

Filed in: Politics, Politics
Tags: John McCain, rich people, Social Security, wealthy

I'm sure by now you've all heard or read what McCain said about social security:

I'd like to start out by giving you a little straight talk. Under the present set-up, because we've mortgaged our children's futures, you will not have Social Security benefits that present-day retirees have unless we fix it. And Americans have got to understand that.

Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that's a disgrace. It's an absolute disgrace, and it's got to be fixed.

Basically, social security as a concept is a disgrace to him. It seems that the people who depend on it think differently (who don't have $58K/year retirement plans from their first job while working a lucrative second job).

His economic adviser Phil Gramm, who was destined to become the US treasurer before this gaffe, thinks anyone who isn't doing well financially right now is just a whiner:

"You've heard of mental depression; this is a mental recession," he said, noting that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices. "We may have a recession; we haven't had one yet."

"We have sort of become a nation of whiners," he said. "You just hear this constant whining, complaining about a loss of competitiveness, America in decline" despite a major export boom that is the primary reason that growth continues in the economy, he said.

"We've never been more dominant; we've never had more natural advantages than we have today," he said. "We have benefited greatly" from the globalization of the economy in the last 30 years.

Mr. Gramm said the constant drubbing of the media on the economy's problems is one reason people have lost confidence. Various surveys show that consumer confidence has fallen precipitously this year to the lowest levels in two to three decades, with most analysts attributing that to record high gasoline prices over $4 a gallon and big drops in the value of homes, which are consumers' biggest assets.

"Misery sells newspapers," Mr. Gramm said. "Thank God the economy is not as bad as you read in the newspaper every day."

From the surveys cited above, apparently most Americans don't feel the same way. Perhaps because we're a bunch of lazy whiners who didn't divorce our disabled wives to marry super-wealthy heiresses.

A major problem we've seen among liberals these past few decades centers around this - we're unable to clearly identify where this sort of rhetoric comes from and what it means outside of its face value. We see these few gaffes as just that, gaffes. Sure, Republicans want to privatize Social Security and put most of the wealth in the top 1% of America, all the while raiding the treasury with handouts to big corporations and no-bid contracts and "tax relief" for the rich as if it were their own private piggy bank, but that's just part of their philosophy! And when they fuck things up, like Katrina or Iraq, it's just a few bad apples!

If we accept that, we're giving them far more credit than they deserve. This isn't something that happened by accident, the state of government right now. It was expressly made to be cheaper, less efficient, and to direct funding to the wealthy for not doing their job. Everything else about privatization, tax relief, independence, their definition of freedom, all that, is just a ruse to get more money.

But the fact that he so brazenly and openly said that the problem with Social Security is the way it's funded, the defining characteristic of how it works, shows how deeply this is internalized as a problem. I'm thinking that he doesn't really get the full impact of what he's saying since he probably just hangs around other rich people who go to cocktail parties or the races or whatever it is they do these days and complain about the same things in the same way. They hate the fact that they have to pay into Social Security because that money will go to poorer people who don't deserve it. Their retirement is covered, so what's the deal?

Same for Phil Gramm. I'm sure that extremely wealthy folk watch the same news we do and wonder why so many people complain about the economy. Jeez, he just bought his fourth yacht or Van Gogh or whatever it is the fabulously wealthy are buying these days, so why are these whiners fussing? Things are doing better now than when back when they had to pay sky-high 28% capital gains income taxes, am I right?

Can I get a "Hear, hear"?

Really, what we're dealing with here is a cultural difference. McCain's culture is the incredibly wealthy. Their have their desires and needs and language and philosophies and legislative priorities, and they've repackaged them as a philosophy that supposedly benefits everyone.

Now let's wait for the pundits to point out how these statements show that McCain isn't running to be everyone's president, how they show that he's pandering to identity politics, and how he's going to have to piss off part of his base to reach the center and real Americans.

Oh, wait, those people are part of his same wealthy culture. And asking people to objectively understand the limitations of their culture without leaving it is like asking a fish what water's like - it's all around them so they don't even know it exists.

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I would give you half a "hear," since I think you are correct about Gramm, but are coming down too hard on McCain. There is plenty to come down on him for, mind you, but he does make some points.

The current system IS a disgrace, because of the way we are funding it. While I certainly wouldn't agree with McCain in regards to some of the methods that should be done to fix it (such as private accounts), he is correct. Unless we fix it, the system will go broke. That is due to simple fact that more is about to start going out than will be coming in. Some measures (such as not letting the wealthy draw benefits) would fix it. Another way would be to reform the disability system. The frauds and cheats are causing a horrible strain on the system, while people who actually need help wait three or four years to get it.

Nothing has been done for several years to fix this problem, which will make it even more difficult to fix it now. But something does need to be done. I would hope the next president, instead of pushing partisan solutions, would create a bi-partisan committee such as been employed in the past to come up with real solutions. McCain has actually stated he would be willing to work with such a committee, and should be commended for that. Obama has (I think) indicated he would agree to the same thing. Hopefully something substantive can be done soon.

Don Sherfick Don Sherfick | July 11, 2008 6:11 PM

My understanding is that if the Social Security system is a "disgrace" because current workers are paying current retirees, it was a "disgrace" from its inception. McCain seems to think there was a time when retirees money was placed into some kind of trust fund, which itself was the only source their retirement benefits. That time apears to never have existed. The problem with Social Security is that it was started at a time when there were lots of current workers paying in to pay what was promised retirees. Now that ratio has diminished significantly without any adjustment as to benefits or eligibility age.

McCain is showing his lack of competence on economic matters, once again.

Social Security, as of the last I heard ( when privatization was being discussed) is actually solvent as presently constituted through 2034. It could be made even more solvent if the upper earnings limit were removed - why should people who make over $70k/year get to quit paying into the trust fund after they get to the $70k?

It is the Federal budget that is in a severe deficit - largely because the wealthy in this nation are not required to pay their fair share. Trickle-down was a myth and never worked, either under Reagan or either Bush. Instead of using the money to make more jobs, the money was, instead, used for mergers and acquisitions. Bush has turned the Federal tax code into a bad joke, with tax credits for companies to move production offshore, to outsource tasks and jobs offshore, to merge with and acquire other companies (whether the merged companies wanted to merge or not). And, even with the stupidity endemic in the Bush tax laws, if we hadn't gone to war in Iraq, there would be no deficit.

Clinton wasn't perfect, but the heart of the Clinton boom was the fact that the Federal deficit was eliminated.

The tax code is the way that we enable, as a nation, a middle class to happen. In the present scheme, the working classes, and the working poor pay more than their fair share, and the wealthy, less. The tax code should be keyed to the minimum wage: the tax tables should start at minimum wage x 40 hours/week, unemployment benefits should not be taxable under $50K/person in household annually. It wouldn't hurt people who make over $200K annually to pay 40% Federal income tax on that money.

McCain is Bush, only older, more senile, and less drunk.

Robert Ganshorn Robert Ganshorn | July 12, 2008 4:02 AM

I believe the greatest "disgrace" of Social Security is congress who borrowed from the extremely solvent trust fund annually to fund pork barrel "bridges to nowhere." It began as a tiny tax that people smiled about paying because they thought of their mom, dad or aunt having financial security at the end of their days. (when the tax was enacted life expectancy for a man was 66 years)

Don, the democratic congress originally tried to collect the SSI tax for two years before paying out benefits to seniors, but it was quashed by republicans who insisted that the democrats would waste the additional money if they got their hands on it.

As previously mentioned, we once had many more workers for each person receiving benefits and the trust fund was very much in the black at that time. Subsequently congress saw this fat cow full of money and began to siphon it off. "borrowing from the trust fund" it was called. We are left with the earnest promise and "full faith and credit" of the United States that they will pay the money back. This will begin as the SSI begins to cash congressional promises in 2012. This mess began with Reagan in 1983 and was originally shepherded by Alan Greenspan. To this point SSI money was placed in government bonds, but is now based in a government promise. A promise that began with sixteen workers per retired person has shown it's age with three and a half workers per retired person.

Retirement age has already been increased for me to 66 and a half years. Many people in America will have to work until they die to fill a gap created by spendthrift congresses and agreed to by presidents of both parties. I believe that this is the greatest disgrace: "They never thought life expectancy would increase as quickly as it has."

There is almost complete disinformation regarding "privatizing" Social Security account that the press continues to trumpet in the face of actual facts about what the plan really is. Even under G.W. there was to be no privatizing of SS. The plan is for personally managed accounts that remain inside the SS system. An individual would be given some percentage of his account that he could allocate among a menu of investment vehicles, approved by the Treasury Dept. and the SS Administration. It's like a 401(k) plan. The money remains inside the SS system, it cannot be used for speculative investments. There is no "the wealthy will take their money and leave the system".

Obama is losing me in part because of his positions on Social Security. He has already said he is against raising the retirement age and reducing or indexing benefits. He also is resistant to raising the contribution income threshold. He want to do nothing above the current $102,000 cap until $250,000 is reached, and then require contributions at a reduced amount. His plan, according to the SS financial experts, would make up maybe half of the projected shortfall. By taking critical pieces off the table, he has essentially doomed his plan to failure. McCain, on the other hand, isn't ruling out anything. He is admitting that some of all of it -- raising the retirement age, reducing or indexing benefits, contribution increases across the board, uncapping the maximum affected income -- may be necessary if the system is to remain solvent.

The Dems are also losing me on this one by a number of party officials saying, after Obama began to discuss SS, that they wish he hadn't, as it can only hurt him. They believe that as a crisis is not imminent, it should be left alone. That's not how good government works. You deal with issues before they become crises so that you can handle them in a deliberate, orderly fashion.

It's always a lot easier to say it's a "mental recession" when you can afford to pay double the price of your food and 3x the price of your gas and the heating bills don't bother you. As for me, I'm not just imagining these things.