Dean Baker takes issue with a George Will column that I recommended.  On the political economy of reactionary progressivism, he's predictably conventional.  But in defending "Social" "Security" he's undermining the reactionary progressives' argument that it's really insurance (after all, the original title is Old Age, Survivors, and Disability Insurance.)
Okay, but in the real world we know that people pay for their Social Security over their working lifetimes, so it is no more a handout than the interest on government bonds that they hold is a handout. In both cases they paid for this income stream. Will does have a case for a regressive redistribution with Medicare, but there the redistribution is to the doctors, drug companies and medical equipment suppliers who charge us twice as much as their counterparts in other wealthy countries. If Will wants to bring these costs down, then he's got a good case.
If "Social" "Security" is really a form of forced savings, why not just put each contributor's payments directly into government bonds, or let contributors decide which mix of investments to make?  Seems to work well enough with, for instance, TIAA - CREF.  And give Mr Baker credit for recognizing the rent seeking in the so-called prescription drug benefit.

But then the rent-seeking vanishes.
As far as big regulatory government helping the strong, he certainly has a case as we just saw with the [Trans-Pacific Parnership].
Thus ...
The moral is that the government is part of the economy whether George Will likes it or not. The battle is over who is likely to be better served by its actions.
Yes, well, on this score count me as more Jesuit than the Pope.  The more activist the government is, the more rents there will be for K Street to dissipate.

Then, Mr Baker continues his rebuttal with an anemic endorsement of Our President's economic record.
As far as zero interest rate policy pushing up the stock market, relative to the size of the economy the stock market is no higher than its was in 2007 before the crash. The stock market was not being pushed up by ZIRP then, what is the case for it now? And of course tens of millions of middle and moderate income people have benefited from getting lower mortgage interest rates. And, the additional purchasing power has added one to two million jobs according to a number of different studies on the topic. So, the data don't quite fit Will's story here.
Thus: no reflation of the stock market bubble, no net gains in wealth, and at best a halting economic expansion, probably hobbled by the excessively constrained "economic stimulus," the adjustment costs of the so-called Affordable Care Act, and perhaps the failure of imagination in gridlocked Washington to build anything new, despite the low interest rates.

But when it comes to the primary driver of inequality, Mr Baker only hopes to enable more of it.
Will goes on to complain about single-parent families. Yes, it would be great if the Will's government could give every child two loving parents, but governments actually are not very good at coupling people. This means that we have to try to create a situation in which a single-parent can provide a comfortable upbringing to their children. This means child care, paid sick days and family leave, and decent wages. But that may require some government interventions of the sort advocated by Bernie Sanders.
Yeah, enabling dysfunction to get more of it is going to work real well.  Haven't we been doing precisely that for the past fifty years?  It's the bastardy and the desertion, not the lack of Denmark's welfare benefits. Stop throwing money at it, and stop holding up the likes of the Kardashian sisters as role models.

No comments: