Economist's View: We Need More Saving, But Not Right Now
An Attack on Jeremy Siegel...

Don't Let Jonathan Chait Draw Your Bathwater!

Here's something I wrote last November:

Grasping Reality with Both Hands: The Economist hopes for a grand bargain on Social Security reform:

So Washington is full of rumours that 2007 will bring a Grand Bargain on social security reform.... Nancy Pelosi and her friends may be loath to touch social security but they are worried that poorer Americans don't have enough of a retirement nest egg.... Democratic wonks have all kinds of ideas for getting ordinary Americans to save more.... If Mr Bush wants to sort out social security and the Democrats want to revamp the government's role in the rest of retirement security, there is clearly room for a compromise... combine the Gale/Gruber/Orszag ideas for restructuring retirement tax subsidies with the Liebman/MacGuineas/Samwick social security reform plan... [which] is probably the best bipartisan plan around and, importantly, includes a mandatory individual contribution to a personal retirement account. By restructuring tax subsidies for retirement saving so that poorer Americans got a hefty top up to their mandatory contributions from Uncle Sam and you might convince enough Democrats that a system which includes personal accounts makes sense...

Back in 1998, 1999, and 2000 there was a deal to be struck: bring the existing Social Security system back into balance with a combination of (small) tax increases and (moderate) future benefit cuts, and supercharge it with add-on private but regulated and insured personal accounts. But neither Gingrich, Hastert, Armey, Delay, or Lott were interested in such a deal--it would give another substantive public-policy victory to Bill Clinton, you see.... But the deal... is still there to be struck, if program design and decision-making can be moved out of the White House to locations with credibility.

And here's what Duncan Black--"Atrios"--of Eschaton said about me:

Eschaton: No!: Look, people who advocate adding "personal accounts" to Social Security are just stupid people. Really, just morons. There's no reason to do it.... If you think some Social Security contributions should be invested in the stock market (I don't) to raise returns overall, then... an index fund.... I still think that's a bad idea, but there's a rationale for it. There's no rationale for dividing that up into millions of individual accounts....

Social Security is a lovely program which works just fine and really needs no changes other than extraordinarily nonurgent tweaks to the tax formula at some point.... There's no need to strike a "grand bargain" which combines some stupid things with some smart things because there's no need to do so. Leave it alone.... People who continue to argue that there is [a problem] - and that the problem can be "solved" with the magic private accounts fairy - either have broken brains or are attempting to push an agenda for ideological reasons or for personal enrichment for themselves and their kind...

Here's what Jonathan Chait says about the relationship between people like Duncan Black and people like me:

Matthew Yglesias: [A]s Chait puts it in his conspiracy-minded phrasing, "the two groups [the activist liberal netroots and the 'wonkosphere' of more journalism-oriented bloggers] generally regard one another as allies and criticize one another tepidly if at all..."


"Stupid people... morons... broken brains... push[ing] an agenda for ideological reasons or for personal enrichment..."


Don't let Jonathan Chait draw your bathwater. I'm just sayin'.

Matthew Yglesias points out what is really going on:

A less conspiratorial way of putting it would be that we in the wonkosphere don't criticize netroots activists all that frequently or vehemently because we tend not to disagree with them on the merits all that frequently about matters of fundamental importance. And, after all, why should it be otherwise? I'm a liberal journalist, liberal activists are liberal activists, and the reason the adjective "liberal" fits in both cases is that we subscribe to similar worldviews. When we disagree, we disagree--but it's not extremely frequent...