Body Politic Incorporated
My previous posts the on CS Monitor column Myth of the Populist Stock Market brought a response from someone named Doug. This would be one of my brothers-in-law, originally from Aberdeen. Despite the severe handicap of being Scottish by birth, he is currently the head chef at the Four Seasons in Georgetown, where everyone has to genuflect and call him 'Chef Anderson". You don't get a job like that for just being able to bake a potato. It is unlikey I will ever convince either of my brothers-in-law that I have any sense especially since men genearally want to think they married the only reasonable person in a particular family. I wouldn't want to take that away from anyone.
I would like to clarify what I was trying to say with that post.
First in regard to privatization of Social Security. While social security is generally presented as a pension-like thing, where you pay in your money and upon retirement you get your money back, normalized adjusted and in installments. The obvious actual structure is that the current working generation is paying directly the retirement of the previous, with all attendant sensitivity to demographics
(two tables from the Statistical Abstract:
USA Statistics in Brief--Population by Sex, Age, and Region,
ACS: 2002 ACS Tabular Profile for United States). You can draw an envelope around the sector of the economy that is working and paying in (the government collects such numbers) and around the sector that is receiving benefits (ditto). Under optimun conditions there is balance, When the baby boom retires there will not be balance. Ahead of this two events occurred, the SS tax was raised to try to build up its fund, and people have been encouraged to start retirement accounts and cooperative pension plans. The republican plan in very general terms is to rescind this tax hike, which was losing its race as it was. Within a short span this will impact on payouts on existing obligations. Additionally if no reinvestment scheme is mandated a certain percentage will simply spend the money, of those that invest some will lose much or all accomplishing the same thing. There is nothing to suggest there is an adequate body of assured performing stocks that will return better that treasury bills - which is what the SS admin. bought. For the people for the specific of their retirement there is little this program adds. What it does is move a very large body of money out of the governments control into private hands. The administration of this money will involve no less effort or cost though decentralized and reestablished in the private market.
It is a trend toward what Jacob Hacker in a column for the New York Times calls the Family Risk Factor
Concerned with reduced and reduced availability of health care, he examined family incomes and noted significant volatility which he believes points to increased assignation of risk to the individual or family. Risk is a term referring to uncertainty in an economic endeavor, usually priced directly or indirectly (as a lesser rate-of-return) or managed by being spread out, usually a function of the government or other large scale institution. The lower middle class is likely to feel the greatest burden of this and similar developments:
Op-Ed Columnist: Our So-Called Boom. Krugman is mostly right about holiday sales, Walmart did well in the final count, it was chains like Target and old Navy that fared poorly (I was in college before I knew that Christmas shopping could be done in places other than Filene's Basement).
The significance of this and other general movements to place the American identity not only wholly in the free market, but specifically within the stock market - to create a notion of citizenship as though it where a franchise is to subtly (but not slightly) change the social compact. Incorporation absolute. Gessellshaft beyond gemeinschaft. Contract before consideration. Everything that is - is in black and white. above the dotted line and ahead of the mouse click that completes the transaction.
A significant portion of the markets growth over the last decade or so was contingent on an increased share of the nations money supply being directly invested in it, as opposed to elsewhere. If the market apportions capital wisely instigating industrial growth and increased human capital - all to the good. if not than much is being given to one of America's most hyperactive institutions to accomplish nothing and feed a disquieted hunger only, which will be all we are.
9:17:45 AM  ;;
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