Maher & Agribusiness

So, I'm flipping through the channels tonight and I come across Bill Maher. I pause because Robin Williams is on, but Bill launches into another one of his paranoid rants about agribusiness. This time, it's directed at Tommy Thompson, who's sitting right there. He probably deserved some of it (we all know that the four food groups were selected by the farmers, and the more recent pyramid is a grab bag of agribusiness interest and public health wonk fantasy), but I was quickly reminded of why I can't understand how Bill Maher thinks that he could lecture anyone on economics or politics.

This is more or less how it went: Maher thinks that terrorists couldn't make America's food supply any more toxic than it is now. He explained it with this incredibly muddled process: farmers grow corn because they give campaign contributions (that's right: because). Then they have all this corn, so they have to produce high fructose corn syrup to get rid of it. That makes us fat, and we are going to pay for it one of these days. Meanwhile, the pharmacy companies are selling us the cure for the toxins we are ingesting. I think he was calling it the agri-industrial complex last season, echoing Eisenhower's famous warning.

Can anyone understand the man's "logic"? The grow corn because they can contribute money? This begs the question: where did they get the money? From growing corn? If so, for what reason did they grow the corn before it "allowed" them to contribute campaign money? Also, they don't make high fructose corn syrup because they have corn: they grow corn because they can sell HFCS. They can sell it because the next best sweetener is sugar, but the government supports sugar prices at higher than market levels. As a result, HFCS is a cheaper alternative. They also grow corn because the government supports ethanol programs. The problem is not just the government or just companies like Archer Daniels Midland: it's the combination of business and government. To paraphrase PJ O'Rourke, when you first start to legislate buying and selling, the first thing to be bought & sold is the legislature.

Meanwhile, Robin Williams chimes in with this classic little bit of Hollywood environmentalism: he couldn't understand the whole deal about "acceptable" amounts of strychnine that they were putting in the water. Robin: it's arsenic, not strychnine. Nobody is putting it there, it is a natural contaminant. It costs money to take it out, and it's not clear that the benefit of getting the last little bit out is worth the cost. Robin's argument was that this was like discussing an acceptable amount of feces in the bath tub. Newsflash, Robin: I'd be willing to bet that the amount of feces in your tub is nonzero. Has it ever hospitalized you? Would you be willing to pay someone to scrub it with bleach every day?

Also, Bill, check your stats: Americans are living longer every year, and we have more, not less, variety available to us. I saw canned guava in Walmart the other day. You may not like it, it may not be as good as the fresh guava in the fruits and veggies section, it may not be as good as the organic guava you enjoyed as a child, etc., but it is more variety than was formerly available to me. Go look in the dairy case: there must be 5 varieties of soy milk in there. Our local Walmart even has Nutella, the American absence about which I have heard european bloggers rant. Every grocery store now has organic eggs, organic vegetables, organic meals, etc. It used to be tough to find Yukon Gold potatoes: now I can get them in 10 lb. bags at Walmart. Or I can go to the food coop up the street where they sell all kinds of vegan-friendly and organic foods. Thanks to modern supply chain management, transportation, and international trade, I can get almost any kind of fresh vegetable at any time of the year, making the term "out of season" almost obsolete. I can buy wild salmon almost right out of the water. I can get fantastic gourmet cheeses, many of which are vegetarian-friendly. The local Albertsons started stocking not one but two brands of arborio rice. Both Albertson's and Walmart have sections dedicated to purely Mexican brands, which is interesting because it caters to customers that are probably in the lower quintiles. And I'm not the only one noticing the variety explosion.

American obesity does not stem from the diet, but rather the lack of exercise. It may also be a lack of the discipline to say no to another helping of Ben & Jerry's (another company that should be branded as evil by Maher, but gets a pass because of their hippy ethics - nevermind the fact that they sold out to Unilever, a company that also makes Slimfast). But it's silly to think that there is a conspiracy between companies trying to sell snacks and companies trying to sell insulin. The problem lies right between our ears, and conspiracy theorists like Maher simply feed the belief that it is someone else's fault and that if we simply had the right mix of laws and a magic pill, we could all become Lance Armstrong.

Please, oh please, oh Master of Smarm: go back to making B movies.

What SS should look like

It's easy to crtiticize. It's much harder to outline what you would like to see in a policy. What would I like to see in a Social Security program?

In an anarcho-capitalist world, the question doesn't make sense. The obvious problem with leaving retirement pensions to each person on their own is that poor people wouldn't have anything. Or would they? In a minarchist world, same problem.

In a minarchist world with safety nets, you would have flat or progressive taxes that provided means-tested support. Or perhaps a national sales tax that naturally favored savings over spending. The sales tax would be regressive, so maybe you exempt food and medicine, but that begins to take us down the road away from simplicity and into social engineering.

In the existing world, it seems misleading to have two separate taxes, federal income and FICA, on the same wages, especially since the "excess" part of the FICA ends up getting mixed in with the income taxes to be spent on whatever the president and congress want. So I would begin with combining the two and eliminating the bogus "employer match". From there, I would implement the same tax I have written about before: generous personal exemptions of $12000 per adult and $6000 per child, 25% flat marginal rates on everything above that, no credits for mortgages, massive simplification of the rest of the code, no corporate taxes, no or at least very low capital gains taxes, etc.

I would also not have separate welfare programs for older and younger people. Instead, I would have one program that provides a means-tested basic income for everyone under 18 or over some older age (say, 65, but gradually moving upwards) or non means-tested for those with certain mental or physical limitations (like MD or schizophrenia). For people without those limitations (healthy, between 18 and 65), there would have to be some sort of quid pro quo, like work, short-term or lifetime caps, or requirements to seek and accept employment.

That doesn't sound much different than what we have now? To the contrary, the existing system is run out of dozens of offices (food stamps from the Dept. of Ag., public housing from "HUD", retirement income from the SSA, Medicare from one office, Medicaid from another, etc.). SS is very regressive, whereas I would make it progressive (poorer people would not pay in as much as wealthier people, and wealthier people would never receive any benefits). I abandon the deceitful notion that it is forced savings for yourself in favor of a system in which it is clear that current workers are paying for retired workers. I also abandon the taxation of SS "benefits". I would also begin to gradually sunset the whole hodgepodge in favor of a modern successor to the mutual aid societies.

Notice that I haven't recommended "privatizing" (except as the final phase), nor have I mentioned "ownership" or "personal accounts". The system of "forced savings" in the current scheme is a joke, and I am not comfortable with forcing people to do things that are for their own good. For one thing, it is arguable whether it is in fact for one's own good to force him to spend 14% of his current income on future consumption when he might in fact need it more at present for something that might provide much more future income. An 18 year old working minimum wage is probably better off spending it on college than putting it in the stock market. At 25, you might be better off spending it on a down payment for a house. At 30, you might be better off putting away money for your kids.

That said, I am in favor of choking off the supply to the federal government, and if we can divert 4% out of the 14% you send in the form of FICA, well, at least it's a start. Now if Bush and the Republicans can stop the madness (here, here, and here, showing that it is madness of their own making), maybe we can see an economy that has a little higher average growth than we've seen over the past 50 years.

Who can manage money?

The boys' over at thereisnocrisis (TINC) latest talking point is that the Republicans have shown by their tax cuts that they can't handle money. They cite The Economist as saying that it's because of tax cuts. They conclude that this shows that Republicans can't be trusted to handle privatization.

1) I'd like to know what article is cited in The Economist. TINC isn't exactly objective about reporting what other people have to say.

2) What tax cuts? They passed a tax deferral. Once they actually cut - or even control - spending, I will be willing to agree to call the marginal rate cuts, "cuts". I agree that the Republicans have shown that they can't handle money ... any better than the Democrats.

3) However, given their interpretation of the Economist, and given the stipulation on Republican fiscal responsibility, the proper point that can be made is that by privatizing SS, they are explicitly giving control of our money away to us.

It's an interesting sleight of rhetoric to imply that by changing SS, they are being "[trusted] with the trillions that flow through Social Security." In the current system, those trillions are entrusted to whoever controls Congress and the White House; in the proposed change, you are being trusted with some of your own money (radical, eh?).

Incidentally, a while back they claimed that they were going to charter an investigation of the Cato Institute to find out whether there were evil corporate interests behind it. News Flash: Cato lists its sponsors, many of whom are successful, wealthy executives. Heck, it was founded by one. Can anyone say ad hominem? Meanwhile, I am curious as to who would pump enough money into an "ad hoc" website that they can afford to produce and air commercials?

Bare majorities

Today, I heard the head of the People for the American Way telling us that he opposes the Republicans bald-faced attempt to force their agenda on the American people by bare majority. He cited two Circuit Courts (neither of which was the 9th), failed to note Roe v. Wade except to imply he was in favor of it, and did not mention the New Deal or the Switch in Time that Saved Nine. He was arguing in favor of keeping the filibuster rules intact in opposition to the Senate Republicans, but only when they are applied by Democrats.

Personally, I not only agree with keeping the filibuster rules (I think Sen. Hatch has been extremely two-faced on this issue), but I think super majorities should be required for more of the government's business.

Adult discussions of Social Security

Is it possible to have an adult discussion of SS?

I have long been amazed by the attention people pay toward their disagreements with their "opponents" and their lack of attention toward those areas where they disagree. Witness Michael Medved and libertarians, Bill O'Reilly and anyone, etc. The worst sin I think a thinking person can make is to engage in rabid partisanship. I look at Democrat vs. Republican rivalries as a Spy vs. Spy, where there is no true difference except the color of their outfits. Remember The Savage Curtain, the Star Trek episode where Kirk, Spock, Lincoln, and Surak are forced into a combat with evil forces? If the two sides had been Democrats and Republicans, there would have been no discernable differences between the sides. It's like high school rivalries, where children perceive themselves as good and the others as evil based on nothing more than the neighborhood in which they were born.

So, here we have a group of kids who would refute everything said about Social Security by the president or anyone in favor of change simply because the president said something about change. [In fact, in their recent updates, they point out that the president hasn't formally said anything, but yet they still criticize everything he says because he said it. Or didn't say it. Or whatever.] In contrast, here is an adult discussion.

Just a few things I find amusing from the fracas:

1) The claim that there is no crisis.

1a) Really? Coulda fooled me, after listening to Clinton use the phrase "looming crisis", and Al Gore shape his campaign around the fictitious "lock box". Notice: This program is not 70 years old. Roosevelt changed it from its stated purpose (forced savings and pension) to a pay-as-you-go system early on, Johnson and the Democrats running the Vietnam war raided the lock box, Reagan and other presidents signed on to increases in the taxes that fund it, Clinton and other presidents signed on to tax (tax the proceeds that come from taxes?), and so on.

1b) Is there a new rule in American politics that says that unless there is a crisis (definition anyone?), we cannot talk about reform? Note to people just being born, for your consideration in, say, 2080, when you are first eligible to start receiving your benefits (if any): sorry, I suppose you would have preferred that we do something now rather than waiting until there was an actual crisis. How's that going?

2) "This is a progressive [tax and benefit] program." Poppycock, on at least 3 counts. This is what happens when partisanship trumps truth-seeking: you start to abandon whatever core principles you might have had and begin to deny the obvious simply for rhetorical points. First, lower income people don't tend to live as long as higher income people. Second, lower income enter the work force and pay into the system longer than higher income people. Third, the amount of income taxed is capped, clearly a regressive measure. For example, let's look at a real world case of a man who opts out of Vietnam service on a medical excuse, takes up skiing for a few years, then gets $1 million from his father to play the market (no payroll taxes on gifts or capital gains), then enters medical school. He retires early, and spends years living off of his trust funds, probably longer than many of his peers. I guarantee you that he will apply for SS at 62.5 years of age. What do you suppose his rate of and total return are going to be? Compared to your local mechanic, for example?

3) "What happens if the economy tanks?"

3a) Indeed, what happens if it tanks and the system stays as it is? How are we going to pay for the Baby Boomers when there will only be 2 workers for every retiree? Even Paul Krugman has been struggling with understanding the growth problem.

3b) The alternative form of this is, "What happens if your investments sour?" Let me pose an alternative question: What is the purpose of SS reform if you actually think reformers are out to screw the average American? Most people who believe this (aka, lock-step partisans) believe that the rich get richer and the poor get poorer. How? The rich own stocks (capitalists own the means of production, in Marx-speak). So, they actually think that the rich are going to screw the poor by "forcing" them to engage in the same type of asset acquisition that enriches the rich. Sort that out and get back to me.

3c) Why is everyone in favor of 401(k)s, IRAs, the Civil Service pension, the CALPERS, etc., if private investments are so risky? The long term return on stocks is ... ? Given the likely age at which people will begin contributing to these risky accounts (25) and retire (65), their time horizon is 40 years. Can anyone find me a 40 year period in which stocks lost money, even if you invested at a peak? And could someone please look up the relationship between risk and reward in the markets?

Finally, although it was more adult than most discussions I have seen, I saw this in a speech given by the President of the AARP I saw on CSpan today (paraphrasing):

Tinkering with SS is bad in any form. Furthermore, there needs to be more encouragement to save. We need to force people into 401 (k) programs and make it difficult for them to opt out.

Let's get this straight: incentives matter. Why do you suppose people who could afford to do so fail to save for retirement? I submit to you that they no longer regard SSI (Supplemental Security Income) as supplemental, but rather as the whole ball of wax. In fact, that was always the push from the left: invent stories about seniors living on cat food, then increase benefits so that someone could live solely off of SS. Anyone surprised that people think they don't need to save for retirement?

5) From Left2Right, one of the risks (#8) that SS mitigates is that you will die, leaving your spouse with nothing. BZzzt! Actually, SS is much worse on that score because SS cannot be left to survivors as you see fit. Yep, the SCOTUS actually told us that your Ponzi invesment benefits are not your property (back to Roosevelt's little Potomac 2-step), so you cannot transfer them to, say, your siblings or grandkids.

Personally, I think there are good reasons to tinker with it, privatize it, or completely abandon it in favor of something better, but the tone of the debate is so puerile as to make me sick.