Saturday, December 10, 2005

Republocrat Joe Lieberman


I respect Joe Lieberman. As a Jewish American I was proud of Al Gore’s selecting him as the Democratic Vice Presidential candidate in 2000. I thought he conducted himself with dignity and grace but still delivered a good partisan punch when required. In 2004 I respected Lieberman for his authenticity and refusal to pander to Democratic Party activists over the Iraq War. I disagreed with him intensely over his views but there is something to be said for a man demonstrating that kind of strength.

Like all 100 Senators he looks in the mirror and sees someone he believes should be President. He has that singular vanity and ego that epitomize so many in public life. It would have been easy for him to be seduced by that ambition and try pandering his way to the nomination. For example, Senator John Kerry voted for the war yet tried to be the anti-war candidate at the same time. If the war had gone differently I suspect he would have been closer to Lieberman than Howard Dean. Too many Democrats have an authenticity problem in their opposition to President Bush. For five years the Democrats were spinelessly rolled on tax cuts, bankruptcy legislation and the Terry Shiavo situation because of their cowardice to say what they really believe unless the polls tell them it’s OK. Somehow, Senator Lieberman has retained his authenticity while occupying the political center and that merits more than a little respect.

Today Lieberman finds himself in the Democratic Party’s crosshairs and many of my fellow liberals consider him a traitor as the New York Times reported today. Yet I wonder if MoveOn.org’s Tom Matzzie would have demonstrated the same courage Joe Lieberman did in the 1960’s and put himself on the line for civil rights. As a young man, Joe Lieberman went to the deep south to protect the rights of blacks to vote. If you think that was an easy and safe activity for a Jewish person to do, think again. Lieberman was risking his life for a just cause. Would Tom Matzzie have done the same? I have to ask myself if I would have done the same. Ask yourselves that question.

However, more than personal respect is required to earn support. Leadership is also about judgment and accountability. Sadly, this good man’s record in recent years is sub-par. First, it was largely through Senator Lieberman’s initiative that the bureaucratic catastrophe known as the Department of Homeland Security was created. Lieberman is the ranking Democrat on the Senate’s Government Affairs Committee. Aided and abetted by Senator Susan Collins of Maine, they rushed an ill- advised reorganization of the Federal government that has further undermined our ability to fight terrorism and respond to disaster. Senator Kennedy correctly referred to it at the time as “re-arranging the deck chairs on the Titanic.” The Bush Administration was actually right to initially oppose the plan but flip-flopped in embracing it because it appeared to accomplish something on the surface. Indeed, President Bush hypocritically exploited the creation of Homeland Security as a wedge to defeat Democrats in the 2002 mid-term elections. As we have seen in the aftermath of Hurricane Katrina, our response infrastructure has become even less coordinated. The one component of national disaster recovery that used to work well – FEMA – was neutered by the creation of this Department. As Thomas Kean and Lee Hamilton recently reported in their independent commission’s final report, both the President and Congress have largely failed to make us safer four years after 9/11. As the ranking Democratic member of the Senate Government Affairs Committee, doesn’t that fall under Senator Lieberman’s bailiwick?

I also find Lieberman’s assertions troubling that we shouldn’t question the President’s credibility regarding the Iraq War. We have more than enough evidence to at least be suspicious that the Bush Administration misled the country in a war of choice. Lieberman’s position that questioning Bush only will undermine his credibility at our “peril” because he has three years left in his term is flat wrong. The fact that Bush has so much time left in his Presidency demands that he be held accountable. As we have already seen, an unchallenged Bush without proper oversight has put this country in tremendous peril. Already we’re seeing some positive results from a more aggressive Democratic posture: Bush has responded to Congressman Murtha and is listening to the Pentagon more about exiting Iraq; Secretary of State Rice retreated somewhat on our policy of detainees while in Europe; and the President has finally acknowledged mistakes in the early stages of the war - a necessary first step to reach a an exit strategy consensus. Does anybody believe that could have happened without the Democrats finally behaving like an opposition party? If anything the Democrats have been too supplicant.

Domestically Lieberman was too willing to sell out on Social Security and ready to undermine the Democrats efforts to stand up to Bush earlier this year. He also aided and abetted the downgrading of accounting standards responsible for the Enron type scandals that have caused so much harm to the middle class. Finally, there is the bankruptcy legislation that passed earlier this year at the behest of the banking and credit card industry and at great harm to struggling families. Lieberman opted for two-faced behavior as he released a press release denouncing the new law yet supported the Republican parliamentary tactics on cloture in order to serve his contributors from the banking and credit card industry. I’ll write more about the new bankruptcy law and the Democrats complicity in its passage in a future post. For the time being let me just say that any Democrat who supported it by their votes on the floor or through parliamentary shenanigans as Lieberman did, deserves to be challenged in a primary. Lieberman is a good man. But he also appears to have lost touch with the modest working class roots that he came from.

Joe Lieberman has become what I label a “Republocrat”. A Republocrat is someone who politically seeks to benefit from the Democratic label but undermines progressive values. If I were a Connecticut resident he would not have my vote.

5 comments:

ghost said...

Rob:

Your attack on Lieberman really upsets me and reveals your strong political bias in my opinion. Like McCain, he is a politician who is comfortable enough to say what he believes most of the time instead of just bowing to the party line. He is one of those who puts country before party, and should be respected for that. Also like McCain, he is still far more aligned with his party than the opposing party, but the press highlights the high profile positions where these men disagree with their parties. Should Republicans deride McCain as a "Demolican" (which unfortunately does not sound as good as a Republicrat) when he splits from the party on important issues? What about Susan Collins or Olympia Snowe? Have we come to the day where the only good Democrat is one who marches to party orders?

As you note, Lieberman has been remarkably consistent about his views on Iraq. He criticized Bush I for not finishing the job in 1991, and he strongly supported regime change along with most Democrats under Clinton. Lieberman certainly thinks many things could have been done better in Iraq, but he does not think all is lost and that no progress is being made. He also thinks it is unfair to say the President has no plan, because he clearly does even if you do not like it.

On the other points you raise against Lieberman, I will demur on the bankruptcy bill because I really have not studied it closely. Far be it from me to have on opinion on something I know little about :)

However, your criticism on Homeland Security is a bit off base, I think. You are right that Lieberman supported this, but here the whole Democratic Party was strongly on board and Lieberman was just with his party. In my view, a lot of the Homeland Security push was about politics. Dems are very uncomfortable with the focus being on war overseas, because they have traditionally lost on defense since Vietnam. Pushing for the Homeland Security department allowed them to shift the focus to doling out big batches of money to various constitutients and trying to create more union workers who would hopefully be Democratic voters. Remember the big battle to federalize the airport screeners and then to try to unionize the entire Homeland Security workforce?

You are right that Bush buckled under the political pressure on that one, but with the Democrats harping on how "unsafe" we were it was not tenable to do nothing. I think Bush finally felt he had to be seen doing something that hopefully would get fixed as we moved along. However, you cannot hang this one on Lieberman, as people like Kerry, Pelosi, etc were fiercely for this.

I am even more unhappy with your comment on Lieberman being willing to "sell out" social security for saying he would consider a compromise with Bush. On this issue, it is the Democrats who have cynically sold out any claim to progressive values. Social Security is not progressive. It takes money from many young workers who have little and redistributes it to the wealthiest age segment of the population, all in the name of the poor little old lady choosing between food and drugs that the AARP trots out when needed. The system can only be fixed when multi-millionaire recipients stop getting back more than they put into the system and stop getting subsidized health care benefits. Unfortunately, many of our parents have been convinced by all the political pandering that they somehow deserve these extra benefits regardless of their need and how little they actually paid into the system. The payroll tax that supports this is a big part of the "working poor" problem.

Bush finally proposed a mildly progressive plan that would have cut the benefits of future wealthier recipients to merely tracking inflation rather than wage growth, and most Democrats demogogued it into the grave by pretending social security has no problem. This is an issue I do know a lot about, and I was shocked by how misleading many Democrats were about the statistics and true state of the system, as well as the effects of private accounts. Krugman of the Times was misleader in chief, in my view. The Bush solution was not the only possible answer to this problem, and Lieberman merely indicated a willingness to recognize the problem and come to the table. Instead, most other Democrats would rather kill any reform for near term political gain (now you have got me so upset that I am impugning their motives!). The current system will hurt the young poor the most, and it is a travesty.

I would love to debate social security reform with you in detail, because it is something I have really studied and there was a ton of misinformation and half truths floating in the press. I think on a subject like that, Lieberman is a hero for wanting to put the country once again before making cheap political points for his party. Many politicians have taken the low road on this issue, including Clinton when he destroyed Tsongos in a Florida primary by saying he wanted to lower social security benefits. It is not a "sell out" to recognize the problems and want to fix them!

Rob said...

Ghost -

I will have to address Social Security in a future post. I'm formulating some of my own ideas re pension reform for younger works but it isn't quite ready yet.

What Bush did on Social Security as he has so often is mislead that we have a crisis when we don't. Furthermore, Social Security is not about wealth creation but rather an insurance policy. Bush's policy would have been destructive and the Democrats were right to stand up to it - they showed spine which was refershing for a change. As I see it the Bush proposal was nothing but a boon doggle for Wall Street. Stay tuned for a future post on this one: I also want to address bankruptcy, global warming, the Sudan. On some of these issues it seems one can have an entire blog dedicated to them! I am but one person with a full time job.

As for my political bias I don't hide it and never have. Why should I? I am a liberal who is critical of both parties. This isn't the "Intrepid Conservative Journal" or even the "Intrepid Centrist Journal." I believe that a firm voice from the patriotic Left has been gelded in this country and I am standing up for that voice - but I welcome interaction with all views and don't censor anyone. I've looked at other blogs on both sides and have noticed a trend of no dissenting voices on either side. Not here. You've posted numerous comments I disagreed with. A woman called Karen 35 took issue with me for attacking Democrats. A gentleman from England named Frank Pulley posted comments saying it was treachery for any to challenge Bush. And you. If you're all attacking me I must be something right - bias and all.

As for McCain, I actually think McCain is quite conservative and to the Right on many, many issues. I don't seem him as a centrist. But I respect him as an honorable man. This is a man who could been released from his captors in Vietnam but chose not too at out of respect for his comrades. I can't help but respect a man like that no matter what his views are. Where he goes against the grain in the Republican Party is on tone rather than substance much of the time. If he were to become President I expect I would oppose his policies as corporatist. But at least the White House would have an honorable man and hopefully a competent one. We have neither at the moment.

As for Homeland Security - I don't disagree with you about the other Democrats culpability. I highlight Lieberman because he was the catalyst and everyone else jumped on board. I think the politicians in both parties wanted to appear like they were doing something when in fact they only made the situation worse. The only politician to tell it like it is on that one was Senator Kennedy.

Once the train left the station some Democrats wanted to at least protect the rights of unionized workers. Senator Max Cleland of Georgia was among them. The Republicans proceeded to hit him with a barrage of commercials challenging his patriotism and comparing him to Osama Bin Laden. And this was a man who lost limbs in Vietnam!

Bottom line: we already have one Republican Party. We don't need two. I stand by my description of Lieberman as a Republocrat. There are others and I will write about them.

Regards,
Rob

ghost said...

Rob:

I truly appreciate your not censuring my long posts and I think your blog is great. I am having fun posting and promise I will slow down soon. Hopefully, this post is not too long!

Social Security was sold as an insurance program originally, but in fact it is a ponzi scheme and bears no resemblance to insurance. People who paid into the system long ago are getting payouts based not on what they put in, but rather much higher benefits based upon higher payroll taxes enacted on later workers and wage growth that has far outpaced inflation over the last 50 years. Furthermore, unlike insurance, everyone gets it whether they need the money or not. Insurance insures one against a risk (say, not having enough during retirement) and then pays out if that risk occurs. If it is a policy like whole life that builds up investment savings, those savings are based upon the original premiums and investment performance, less the cost of the insurance component for the risk of early payout.

A social security system that worked as insurance would base your "payout" on the same two factors. So a portion of your contribution would go towards the insurance component to make sure that everyone meets a certain basic level of wealth upon retirement, and the rest would go towards a payment that everyone would get regardless of wealth. The latter payment for each person would be the value of their invested contributions, less the amount needed for the insurance component, just like whole life.

Instead, wealthy retirees are getting much more than this, and yes it is creating a crisis as in the system is unsustainable. If you mean it is not going to collapse immediately, that is true. But the demographics and continuing payouts of windfalls to elderly who do not need the funds mean it gets harder to fix the problem each year. We can't get the windfalls back from seniors who were paid far more than was earned from their contributions. If we wait until it is about to collapse, there will in fact be no way to fix the system other than cutting off people who are already retired like is happening in many private pension plans now. Many much more needy people will lose benefits so that todays wealthy retirees can keep their windfalls.

Democratic pandering to these voters hardly qualifies as showing spine. I have never heard anyone before you suggest that saying social security does not need to be fixed constitutes a brave act for a politician.

Bush's plan was not perfect, but he started down the right road and at least acknowledged the problem. Most Democrats, and apparently you, refuse to face it.

Private accounts would have exposed the system for the ponzi scheme it is. There is no one rate of return for the current social security system. The rate of return for some of the oldest recipients is hundreds of percent a year, because they hardly paid anything in and get benefits that are largely not based upon their contributions. The rate of return dwindles to under 2% for younger people, and perhaps negative returns for the very youngest, because rather than the money going to their own insurance policy (to use your analogy), it in fact is diverted to provide windfalls to current retirees regardless of need.

Like General Motors' pension plan, this system only worked when we had many workers per retiree. As people's lifespans have increased and birthrates have decreased, the system has become unsustainable.

The discussion in the media of the "cost" of diverting funds to private accounts was a joke. The liability already exists in the form of a promise to future retirees. Either you treat that as a liability you intend to honor (in which case a properly structured private accounts program saves you money over its life), or you need to admit that you intend to renege on that future promise.

Let me give an example. Suppose you have taken a loan of $100 dollars at 10% interest. You owe the principal back in ten years. You have only enough money ($10) to pay the annual interest right now, and really do not see how you will ever have the money to pay the $100 back when it comes due. You get an opportunity to restructure the debt so that if you continue to pay $10 a year, you will only owe $50 at the end instead of $100. So you borrow $100 to pay off the first lender, and ten years later at payoff time, you have $50 more than you would have had because you only owe $50.

You are clearly better off right now, but you have to borrow money now to restructure your future obligation. This saves you money, not costs you money, over the entire period.

Correctly structured private accounts give individuals the choice to divert a certain percentage of their payroll tax to private accounts, in exchange for lowering the future public account benefits they are entitled to by an even greater percentage. Thus, if you really intended to honor the future benefit claims, you are saving the system money by buying out a portion of those claims on the cheap, just like a company that borrows money to buy out its own debt in the public markets at a discount.

Why would some participants be willing to divert, say 2% of their payroll taxes to a private account in exchange for a greater than 2% cut in their benefits from the public side of the system? Because they know they can earn a higher rate of return than the public ponzi rate where most of their money is in fact being syphoned off to existing retirees.

This would cause a shortterm cashflow problem because we would have to borrow to make up that difference to current retirees, but it would cut the system's future liabilities by far more than the cost of the borrowing.

As for the claim that it is a boon doggle for Wall street and that some people would take on too much risk, this is easily answered if the system is designed correctly. Since the cost of losing one's funds would ultimately fall back on the public through the insurance portion I talked about, the government has an easy basis for insisting the choices in the private account be limited to avoid or minimize such risk. There are several ways to do this.
One would be to require that everyone be required to invest in a passive index fund that would invest a portion of their money in a market cap weighted basket of all US stocks and a portion in a broad passive index of US Government Debt. I would use US instruments only, because this would benefit the US economy by lowering the cost of capital and thereby help us all. The percentages in equities and debt would be based upon one's age (as you get older, the debt portion increases).

The above would cost very little to manage and would net Wall Street nothing directly. There has been no period in history of more than 10 years where the US stock markets as a whole have not easily beaten the less than 2% return those under 30 can expect from the public side of the system. When you get within 10 years of retirement the required percentage in Bonds could be high enough to again prevent any meaningful risk of losing money.

While such a system prevents individuals from freedom of choice about their investments, the point of this system should not be to create winners and losers among those who beat or trail the markets, but to merely allow everyone to benefit from the greater index returns than they can expect from the public system as currently structured.

Alternatively, if one wants to allow a greater level of choice in private accounts, one could require those wishing to have more choice to pay an insurance surcharge that would protect us all from any mistakes they make by creating a fund to provide a minimum level of payout.

Of course, one can also envision private account systems that would make Wall Street lots of money and be disasters, but we never even got to that discussion because Democrats misled the country into thinking nothing is wrong with the system that requires more than the smallest tinkering, and that all private account systems are by definition costly and risky. That simply is not true, and they either know it is not true or they have been misled themselves.

I look forward to hearing from you why under what you call an insurance system, elderly people who are very wealthy should get far more than the sum of their contributions to the system compounded at market rate of return, and on top of that get heavily subsidized health benefits through medicare. These subsidies are coming on the backs of poor young workers paying the regressive payroll tax and often having no health benefits at all. The answer is not to raise the payroll tax or even the payroll tax income ceilings, but to stand up to the senior vote and require a means test before anyone gets benefits greater than the annuity value of their contributions less the insurance component I discussed earlier.

Because of all the irresponsible rhetoric, most seniors do not even know they are getting more than they ever paid in, and think they are simply getting back the value of their premiums. That is a joke. I once had a chance to talk with Donna Shalala (Clinton's cabinet) about the idea of letting all seniors get only the annuity value (using current life expectancies) of their contributions compounded at a Treasury bond rate of return, and requiring means testing before paying anyone more than that. She agreed that would go a long way to fixing the system and sounded like an interesting idea. Scarily, she said she had never heard it discussed.

I cannot believe it is because I am the only one to think of it. Rather, I think the politicians are afraid to tell the truth on this. Bush was willing to at least start the discussion, and the Democrats shut him down. Shame on them!

On a side note, I will tell you I heavily opposed Bush's prescription drug plan. We can discuss that some other time if you wish.

Sorry this is so long, but it is one of my pet issues!

Regards,
GHOST

Rob said...

Ghost -

You have much to contribute and I look foward it on Social Security and other issues. I think the entire country would probably agree with you about Bush's prescription drug woes.

On Social Security, for now I will simply say that the Bush Administration deliberately mislead about the crisis and how solvent the fund truly was, making it seem it would be bankrupt in 2018 which was in fact not true. Bush also didn't help himself by periodically raiding the fund to finance projects from his corporate base. Those are not good ways to go about having an "honest discussion."

I also further remind me you that Bush's scheme for Social Security was tried in Argentina with disastorous results. Social Security needs to be stengthened not stripped. I do think something needs to be done for younger workers however and that is something I'm trying to wrap my brain around currently.

Regards,
Rob

ghost said...

Rob:

I am afraid you are mistaken on this issue.

First, Bush never said the social security system would be bankrupt in 2018. Rather, he quoted from the Social Security Trustees report which said that the system would begin paying out more than the revenues it was taking in by 2018, and would exhaust the trust fund by 2041. The first date has now been moved up to 2017 in the 2005 report.

I think it is also fair to point out, as many have, that as the Trust Fund merely consists of IOUs from the Federal Government, we will either have to borrow from elsewhere starting in 2017, raise tax revenues, or cut other spending in order to fund the redemptions of social security fund IOUs.

Next, your suggestion that Bush has somehow raided this fund for unspecified corporate projects makes little sense. The government has always had the excess social securities inflows transferred to general funds in exchange for IOUs based on treasury bond returns. The cash received for the IOUs has always been spent by the government. This is nothing new.

If the government had instead required the social security trust fund to put the money in, say, private company bonds or in a bank CD, then the government would simply have had to borrow the same money from elsewhere. The government would still effectively have the same debt but would owe it to someone else other than the Trust Fund. The only reason this difference matters is because the goverment accounting does not properly record these IOUs to the Trust fund as a future obligation like other debt.

As for your comments on Argentina, that is mistaken because Bush in fact did not even have a single plan. Argentina had one system of privatization. We can debate what worked and what did not work there, but it is only one option. As I said before, there are many options for social security reform using private accounts, and Bush invited ideas regarding all of them. He never held up Argentina as "his plan". He was ready to take serious ideas from Democrats, but what he got instead was an assertion that the system did not need any significant reform.

I think you need to go back and stop reading characterizations of the argument. Instead look at speeches Bush actually gave. The "strengthened not stripped" line is no more valid than saying a company that borrows cheap debt to refinance a more expensive future obligation is weakening its balance sheet. It simply is not true.

If you diverted funds to private accounts and did not require a sufficient corresponding reduction in the system"s public obligation to those recipients, then you would have a point. If, however, as I said you reduce the public system obligation by a greater percentage than the diverted funds, then you are in fact strengthening the system even if you have to finance this restructuring through some short term borrowing. In the end the public system has more money, not less, than it would have had without such private accounts.

Regards,
GHOST