Tag Archives: morality

He’s Been Booker’d

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Fox News reported this last night:

The office of the United States’ top intelligence official appeared to take the blame Friday for the Obama administration’s changing narrative on the US Consulate attack in Libya, saying administration officials who initially claimed the attack was spontaneous did so based on intelligence officials’ guidance.

The statement by Shawn Turner, spokesman for Director of National Intelligence James Clapper, was put out late Friday….

As Fox News put it, “Turner’s statement marked a complete reversal from the initial claims.”  Turner’s statement included this, in part:

In the immediate aftermath, there was information that led us to assess that the attack began spontaneously following protests earlier that day at our embassy in Cairo.  We provided that initial assessment to Executive Branch officials and members of Congress, who used that information to discuss the attack publicly and provide updates as they became available.  Throughout our investigation we continued to emphasize that information gathered was preliminary and evolving.

However, Fox News also has been reporting that two intel sources have told them that intelligence officials knew within 24 hours that the attack was terrorism and that they suspected it was tied to Al Qaeda.  As Fox dryly put it, it’s unclear why the intelligence community told Executive Branch officials it was spontaneous.

This is highly reminiscent of the event late last spring involving Newark, NJ, Mayor Cory Booker.  In a May “Meet the Press” interview, Booker told NBC’s host, Dick Gregory, that the Democratic Party campaign’s attacks on Republican Presidential Candidate Mitt Romney (in all but name at the time) for his time at Bain Capital were “nauseating.”  Twenty-four hours later, Booker had been browbeaten by the White House into apologizing for his nauseating remark.

This is what is being done to Clapper—he’s being forced to take the fall for this administration’s dishonesty in its mischaracterization of the terrorist attack on our consulate in Benghazi, Libya, that left our Ambassador to Libya murdered along with three of his staff.

A Social Security System Proposal

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Social Security, as we know it, is going to go broke in a few short years.  Demographics guarantee this.  When Social Security was instituted, it was a supplemental income program for our retired, who were expected to continue to rely on their own resources and those of their families for their retirement years.  Moreover, at that time, there were roughly 7 workers paying into the system for every retiree and a retiree lifespan in retirement was about 6 years.

Today, Social Security is expected to be an income replacement program.  Moreover, the number of workers paying into the system is around 3 for each retiree, and that number is falling.  Then, each retiree is expected to live for 17+ years in retirement.

But one thing has remained constant.  Each worker paying into the system is paying for someone else’s current retirement—the money paid in is not set aside to accumulate for the payer’s benefit.

I propose to change this in the following way.  It will eliminate Social Security as we know it, but it also will preserve and strengthen the promise of social security: a reasonably comfortable retirement for the retiree.  Privatize, entirely, Social Security.

Eliminate the payroll tax for both employer and employee (think about the immediate stimulative effect from reduction in the cost of labor of 6.2%).  However, require the employee to set aside 6.2% of his income from all sources, not just from wage income (just to keep it simple, and consistent with a tax proposal nearby).  Why 6.2%?  That’s the current employee payroll tax for Social Security, absent any temporary reduction.  Eliminate, also, the present upper limit on income (wages) subject to the Social Security payroll tax.  However, instead of this money immediately being paid out to someone else’s present retirement, it will be put into an account owned and managed by the employee, and the money will accumulate for his own future retirement.

Let’s look at the effect of this on a hypothetical man’s retirement.  Let’s say the man earned $100,000 per year in his last years of working.

Under the current system, that man retiring at 66 will receive $25,800 per year until 2033, when the Social Security Trust Fund will be exhausted and payroll taxes will only be able to support payouts at 75% of their nominal rate—our man, after having been retired just 20 or so years (never mind the 17+ years of an actuarial retirement), will see his payout cut to $19,400 per year (note that for this, I’m ignoring inflation and cost of living increases).

Now suppose our man has been socking away 6.2% for his, let us say, 40 years of working life, and he’s still making $100,000 in his last years.  Again, we’ll ignore inflation, and we’ll take a naïve position of his having started out making $20,000 per year and received constant annual pay raises to reach his present $100,000 annual income.  With his 6.2% set-aside each year naively left to grow with the market (the S&P500 historical growth rate has been 9.77% since 1926—a period including the Great Depression, the Carter Recession, and the Panic of 2008), our man will accumulate enough by the time of his retirement to withdraw over $55,000 per year over the course of a nominal 18-year retirement, or more than $29,000 per year, if he expects to have a 34-year retirement (i.e., live to 100).  And he won’t have a reduction to 75% of that because the government ran out of money.  Of course, this table napkin analysis ignores inflation, also, and it ignores leaving the remainder of the man’s accumulated retirement fund still invested—now perhaps in bonds.

Notice one other critical factor here: with privatized retirement savings in place of Social Security, each man will be working for his own future instead of working for someone else’s present.  With his own money at stake, the man will do a far more careful job of managing for his future retirement than the government already has done—with OPM.

There is, of course, the risk that the man may invest foolishly, or he may invest wisely but have a run of bad luck in the market—downturns do occur.  What happens to him in this brave new world?

First, look at what happens in the present situation, where the impending failure of the Social Security System is an empirical fact.  In this scenario, where the government’s management of our retirement accounts has failed, the disaster affects all of us—every retired individual; every soon-to-be-retired individual; and each of the rest of us, who must find a way to support these unfortunates.

If the man fails, though, whether through his folly or his bad luck, the effects of his failure is limited to him and his family; it is not a national disaster.  And these individuals will be few enough in number that help—a hand back up, generally, or support if his failure comes too late for him to recover—can come from his family, his local community, church and/or charity, and, yes, as a last resort, state government.

A Thought about Unions

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Perry Chiaramonte, of Fox News, noticed this bit a few days ago.

The International Union of Painters and Allied Trades (IUPAT) was carrying signs and chanting slogans in front of the future site of the United Food and Commercial Workers federal credit union in downtown Pittston.

Because UFCW is using non-union labor for the construction of this future site.  The reasons for both the picketing and the use of non-union labor is made clear by the IUPAT’s spokesperson:

Bob Griffiths said he never expected a fellow union to bypass organized labor to save a buck.

Doesn’t a business improve its chances of succeeding—and of keeping its employees employed—by holding down its costs?

Griffiths also said, without any irony,

It’s about the principal, not losing the work[.]

Never mind that those who got the work would be out of work if the union took the job.  Never mind that, as Griffiths has already bragged, that job would be done at higher cost, which can only be passed on to the credit unions’ customers.  Never mind that those customers include union members.

I have to ask: are unions for the working stiff, generally, or just the chosen few?  Are businesses just jobs welfare programs for unions?

First, the Official Denial

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…now comes a partial enumeration of the weasel words and evasion.  I wrote a bit ago about the official denial that the Blind Sheik, he of the first World Trade Center bombing, would be released/transferred to Egypt at Egypt’s behest.

Here’s what former Judge and US Attorney General Michael Mukasey has discovered in the way of that evasion and those weasel words.

Asked before Congress in July whether there is an intention “at any time to release the Blind Sheikh,” Homeland Security Secretary Janet Napolitano responded: “Well, let me just say this.  I know of no such intention.”

And

The State Department’s spokesperson last week, after the ceremonial “let me be clear,” said that there had been no approach on this topic “recently” from any “senior” official of the Egyptian government….

I suppose Egyptian President Mohamed Morsi isn’t senior enough for this spokesperson.

And this:

All of this plays out in the context of an Obama administration that hasn’t hesitated to employ executive orders to get around Congress, led by a president who was caught on a “hot mike” assuring Russia’s leaders that if he wins re-election he will have more “flexibility” to accommodate Russian demands that the US curtail missile defense in Europe.

Since the guy who occasionally sits in our President’s chair refuses to say definitively that the Blind Sheik won’t be released/transferred anytime or under any conditions, all of this sounds pretty definitive to me.

This is Stupid

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Spiegel Online International is describing another European hare-brained scheme in the mill for “bailing out” Greece.

Greece’s lenders are reportedly considering further relief in the form of a partial debt haircut for the crisis-wracked country, the Financial Times Deutschland reported on Friday.

…

Martin Blessing, chairman of Germany’s second-largest bank, Commerzbank, has also said a second debt haircut is likely.  “In the end we will see another debt haircut for Greece, in which all creditors will take part,” he said on Thursday in Frankfurt.

And

And though a second debt haircut would be tantamount to bankruptcy for Greece, it would also enable Athens to tackle the extreme debt that has so far hindered economic recovery.

And in a blatant case of demanding this be done with OPM (at least from the IMF’s perspective; the IMF wholeheartedly approves this second bailout),

[T]he IMF is pushing for debt restructuring from public lenders, who currently hold over two-thirds of the country’s total debt of some €330 billion [$426 billion], according to the newspaper.  However, neither the IMF nor the ECB would take part in such a debt haircut, placing the burden on the euro-zone members, the paper added.

I have a couple of questions.  Wasn’t the first haircut, functionally, a Greek bankruptcy?

Second, if you’re not going to hold the Greeks accountable and responsible for their obligations and commitments, why bother at all?  Why not just forgive the entire debt, and let them resume their profligate ways?  You’ll only bail them outprop them up again, next time, anyway.

In the end, here’s the IMF (and ECB, but at least this organization has honorably committed its own creditors’ money) saying, “Debt.  Very dangerous.  You go first.”  Still, the burden, as the IMF and ECB suggest, should be wholly within the euro zone, or rather (say I) more particularly, it should rest entirely with the private investors who loaned their money to Greece—the private holders of Greek sovereign debt.  Europe’s taxpayers should not be—should not have been—put on the hook any further than they already were from the moment it became known that the Greek government was unable to repay its debt.  Indeed, those taxpayers should not have been put further onto the hook from the moment it became known that the Greek government had lied about its financials in order to gain admittance to the euro zone.

Here’s an alternative thought—work with me on this; it’s an idea of responsibility—how about not bailing them out, again?  Instead, let them go bankrupt, and thereby free them to start over.