THE SEVEN PERCENT DECEPTION! Bush will be pimping a common deception. We call on Paul Krugman to limn it:
THE SEVEN PERCENT DECEPTION: Sorry, but it demands repetition: Last week was The Week That Was when it comes to Bush’s vast dissembling on the subject of Social Security. On Tuesday, the president kept misstating the simplest facts about the venerable retirement program; repeatedly, he deceived a group of average Americans, including people he’d flown to DC to take part in a ballyhooed forum (see THE DAILY HOWLER, 1/12/05). And when the press corps swallowed this whole, barely offering a word of complaint, he spoke at a high school the very next day, where a group of unknowing students applauded him for his misstatements! (See THE DAILY HOWLER, 1/14/05.) But faced with this appalling misconduct, pundits can barely bring themselves to utter a peep of protest. For example, in Sunday’s lengthy lead editorial, the New York Times argued, quite intelligently, against privatization of Social Security. But the paper couldn’t quite bring itself to criticize Bush’s vast misstatements. Here’s the closest the Times could come, in the editorial’s third paragraph:
NEW YORK TIMES EDITORIAL (1/16/05): ...In a forum last Tuesday aimed at persuading “younger folks” to support privatization, [Bush] said that Social Security would be "flat broke" in the coming decades. That is false. The system's trustees expect that even if nothing whatsoever is done, the current system will be able to pay full benefits until 2042, when it will be able to pay 70 percent of the promised benefits. The independent Congressional Budget Office is even more optimistic.“That is false,” the editorial says. But the editors made no attempt to convey the breadth of Bush’s misstatements. They failed to warn their many readers that Bush is routinely misstating key facts. Despite the length of their editorial, they basically ignored the inexcusable conduct Bush put on display last week. What does George Bush have to do before they will rise up in protest?
But at any rate, because your press corps keeps staring into air, the bald-faced deceptions by Bush will continue—in fact, they already have. Last Thursday, Cheney delivered another big speech about Social Security. In it, he peddled another of the major points the Bush Admin is going to use to deceive the American people. But alas! The Times assigned shill-in-chief Elisabeth Bumiller to report on Cheney’s speech. She typed the VP’s misleading claim without a word of comment:
BUMILLER (1/14/05): Mr. Cheney also said that critics who make a broader argument that any kind of investment in the stock market is unwise for personal retirement should look at what he called “real world” experience. He said that a 25-year-old who invested $1,000 a year over 40 years at Social Security's 2 percent rate of return would end up with a little more than $61,000. He said the same investment over the same period in the stock market at its lowest historical rate of return would amount to $160,000.Readers, which amount would you prefer—$61,000 or $160,000? Even Bumiller understands that the latter amount is much larger.
With this presentation, Cheney returned to a standard “free money” pitch from Candidate Bush’s 2000 campaign. In this grift, voters are told that they only get two percent from Social Security, but could get seven percent from investments, resulting in the whopping gains detailed in Cheney’s speech. But this is an apples-to-oranges comparison, as Paul Krugman first explained—in Bumiller’s paper—five long years ago. On May 28, 2000, Krugman wrote a column called “Money for Nothing.” Here’s the part where he briefly discussed the bunkum Cheney offered last week:
KRUGMAN (5/28/00): In a May 15 speech [Candidate Bush] asked his listeners to “consider this simple fact: even if a worker chose only the safest investment in the world, an inflation-adjusted U.S. government bond, he or she would receive twice the rate of return of Social Security." That's an amazing fact; it's even more amazing when you realize that the Social Security system invests all its money in, you guessed it, U.S. government bonds. But the explanation—which Mr. Bush's advisers understand very well, even if [Bush himself] does not—is that today's workers are not only paying for their own retirement, but also supporting today's retirees. And if you think that's a minor detail...let me assure you that I too would have no trouble devising a painless plan to save Social Security, if you let me assume that a large part of the system's obligations would magically disappear.Krugman referred to Bush’s presentation as “good old-fashioned American disingenuity.” But five years later, Cheney still pimps this pleasing bunkum, and his claims appear, without remark, in the New York Times. And trust us: Most reporters have no idea what lies at the heart of this crucial spin-point. Even if Bush understands it well, most of our Big Scribes do not.
For the record, Bush offered this misleading point himself at his ballyhooed forum last Tuesday (text below). It’s quite clear; this free-money script will be widely heard from Bush spokesmen in coming months. And so we make a plea to Krugman: Explain this point clearly, in appropriate detail, in a future Times column. If facts and logic matter at all (and it’s increasingly clear that they don’t), this is a point which will need explaining in the months ahead. Knowledge and logic won’t affect the Bumillers. But people who want to inform the public are going to need some clear instruction in Bush and Cheney’s all-too-typical seven-percent deception.
YOU’RE GOING TO HEAR IT AGAIN AND AGAIN: At Tuesday’s forum, a well-scripted private citizen, New Jersey businessman Robert McFadden, offered the seven percent deception, reciting a pleasing mini-speech straight from the Bush 2000 campaign. Here’s the relevant part of the transcript, including the [LAUGHTER] from the audience as they are being misled. During the discussion, Bush addresses Andrew Biggs, a Social Security employee:
MCFADDEN (1/11/05): Let's take the stock market, because I'm hearing everybody make these debates about the stock market. If you look at the stock market from 1926 to now, the average rate of return on long-term investments has been over 7.5 percent. What I'm suggesting is that I'd rather take my 7.5 percent than take that 1 or 2 percent that you can give me. And so from my perspective—Ha ha ha ha ha ha ha! Bush was glad he’d invited his guest—and he was that the White House had scripted him.BUSH: That would be 1 or 2 percent that the money inside the Social Security trust averages. Is that right? Is he right at 1? Is it even as high as 1?
BIGGS: No. It’s—right now it is low because interest rates are low. Over the long term we're looking at around 3 percent. So you still do have a—
BUSH: So it's more than double. But right now it's like—
BIGGS: [Says he can’t give a precise answer]
BUSH: Yeah, never mind. (LAUGHTER)
BIGGS: You caught me!
BUSH: Don't worry about it! (LAUGHTER) You can still keep your job! (LAUGHTER)
Go ahead. (LAUGHTER)
Seven and a half percent since 1924, that's a great rate of return. Imagine if you're 50 years old and you start—or if you start—if you hold that money for 50 years at that rate, it compounds and grows and it ends up being a lot money, is what you're saying?
MCFADDEN: Yes. Yes, sir.
BUSH: Yeah, okay. I'm glad I invited you. (LAUGHTER)
Yes, the attendees enjoyed a good laugh as they were being misled on these points. But make no mistake—you’ll hear this presentation again and again in the weeks and months ahead. Krugman needs to explain it in a way that even reporters—people like Bumiller—can be expected to grasp.
MOTHER OF ALL DISSEMBLERS MITCH MCCONNELL: Sunday’s shows offered big clowning about SS, with pleasant hosts staring off into air as absurd representations were offered. But on Late Edition, Kentucky senator Mitch McConnell took the prize as Mother of All Dissemblers. It was a textbook example of public deception. This one should go into civics texts:
MCCONNELL (1/16/05): Well, the one thing, I don't know all the questions Time magazine asked [in a recent public survey], but I wonder if they asked younger people whether they thought Social Security would be there at all. And most of them don't think it will be there at all.Yes, McConnell flirts with flat-out lying when he talks about investing “at least a small portion of the Social Security taxes that they already have to pay.” In fact, the White House is floating a plan in which young workers could invest almost two-thirds of “the Social Security taxes they pay,” a point dissemblers like McConnell have been obscuring for years. But note McConnell’s slick, slippery ways when he says that most younger people “don’t think Social Security will be there at all.” McConnell won’t make this claim himself, because he knows it is utterly foolish. So what does he do instead? Simple! He repeats the views of these younger people—people he knows to be wildly misinformed—therefore giving himself deniability but spreading the disinformation around! Democracy’s enemies—men like McConnell—have been playing this slick game for years. They recite this point to deceive the public knowing that it’s utterly bogus.And also, younger people are very, very excited about the possibility of having at least a small portion of the Social Security taxes that they already have to pay anyway go into a personal retirement account that they could control and that they could leave to their heirs.
Oh yeah! What happened when McConnell engaged in this conduct? Did his host, alert Wolf Blitzer, challenge this bit of disinformation? No, the store-bought sage simply stared into air. This is how young folks get further deceived. McConnell and Blitzer, playing nicely together, agree to mislead them in tandem.
SUPERLATIVE! JOSH TO LIMN TIM: As we type, we look forward to Josh Marshall’s promised remarks about yesterday’s Meet the Press. At one point, Tim Russert interviewed White House flack Dan Bartlett. We couldn’t help chuckling when Bartlett offered a familiar recitation:
BARTLETT (1/16/05): The fact of the matter is that the Social Security system that was created in the early part of last century is no longer able to keep up with the demands of this century. In 1950, there were 16 workers paying into the system for every retiree. Today there are three workers per every retiree. And by 2040, there will be two workers for every retiree. This is a matter of math, not ideology.Stop it, Dan! You’re reading Tim’s part! (See THE DAILY HOWLER, 12/8/04, with links to previous perorations by Russert.) But all kidding aside, Russert continued his descent into Hell with his awful performance on yesterday’s program. Across the web, observers must keep naming his name, and they must name the names of the other press figures who stare into space while Bush disinforms the public. They have to name these names every day, and they’ll have to do so for the next forty years. More on this in an all-encompassing overview series this week.