This interesting opinion piece in the Seattle PI charges Fed chairman Alan Greenspan with being “just another partisan hack” for supporting the Bush administration’s plans to partially “privitize” Social Security, despite the fact that this will evidently do nothing at all to address the program’s solvency (and, in fact, stands to make the situation worse). Excerpts:
Last week, Greenspan offered no excuse for supporting privatization. In fact, he agreed with two of the main critiques of the administration’s plan: that it would do nothing to improve the Social Security system’s finances, and that it would lead to a dangerous increase in debt. Yet he still came out in favor of the idea.
Let me make a detour here. The way privatizers link the long-run financing of Social Security with the case for private accounts parallels the three-card-monte technique the Bush administration used to link terrorism to the Iraq war. Speeches about Iraq invariably included references to 9/11, leading much of the public to believe that invading Iraq somehow meant taking the war to the terrorists. When pressed, war supporters would admit they lacked evidence of any significant links between Iraq and al-Qaida, let alone any Iraqi role in 9/11 — yet in their next sentence it would be 9/11 and Saddam, together again.
Similarly, calls for privatization invariably begin with ominous warnings about Social Security’s financial future. When pressed, administration officials admit that private accounts would do nothing to improve that financial future. Yet in the next sentence, they once again link privatization to the problem posed by an aging population.
And so it was with Greenspan. He painted a dark (and seriously exaggerated) picture of the demographic problem, and said that what we need is a “fully funded” system. He then conceded that Bush-style privatization would do nothing to improve the system’s funding.
A disturbing thing about Wednesday’s hearing was the deference with which Democratic senators treated Greenspan. They acted as if he were still playing his proper role, acting as a nonpartisan source of economic advice. After the hearing, rather than challenging Greenspan’s testimony, they tried to spin it in their favor.
But Greenspan is no longer entitled to such deference. By repeatedly shilling for whatever the Bush administration wants, he has betrayed the trust placed in Fed chairmen, and deserves to be treated as just another partisan hack.
The administration’s pairing of dire warnings about the state of Social Security with prescriptions for its privitization does seem a lot like the pairing of al-Quaida and Saddam Hussein before the war — deliberate, repeated juxtaposition of unrelated items to foster an association in the public’s mind. It all seems fairly sinister.
Has Greenspan crossed over to the dark side? Discuss.