Monday, October 01, 2012

The Truth From Robert Samuelson

“The Washington Post didn’t hire me to tell you what they wanted you to hear. The Washington Post elected me to tell you the truth.”

- Robert Samuelson at the... Okay, he never said it.


Today, Robert Samuelson plays the game that "If only the presidential campaigns told the truth, they would agree with me on everything" game. He asks, "Is anyone in America gullible enough to believe this?" Assuming he's speaking of his spin, I expect that he believes so. Let's revisit the words he puts into the candidate's mouths, recognizing both that they're Samuelson's words and that, for all of his talk of truth serum, Samuelson could use a dose of his own medicine.
"Fellow Americans. For years, your beltway pundits — including me — have misled you. We insist that your government has made more promises than it can keep, even if the economy returns to full employment. We then tell you that even if your taxes go up, your public services are going down.

"As you know, the great driver here is that we live in a bubble in which septuagenarians can tap out two columns a week and make a six to seven figure annual income, with gold-plated employer sponsored health insurance. We are likely to complain that between 2011 and 2025, the number of retirees on Social Security will grow by nearly 50 percent to 66 million people; Medicare experiences a similar rise. We insist that resulting spending surge will perpetuates huge budget deficits. We tell you that the Congressional Budget Office estimates that if nothing changes, the budget picture will only get worse.

"I have no credible plan to control Medicare and Social Security spending. That is to say, there is a credible plan to control Medicare costs, but my biggest fear is that it will be implemented and I will no longer be able to advocate an end to Medicare. I'm a smart man, I know how things work in the rest of the world, and I know that the people of every other developed nation pay far less money for health care with similar, sometimes better, outcomes. I know that even if all we did was adopt one of those programs to replace our current government-sponsored insurance plans, or even better if we took the best elements and combined them into a new, American plan, we would see an immediate, massive reduction in healthcare expenditures.

"If we reduced our per capita health care spending to levels similar to those of Canada, Japan, or the better health plans of Europe, we could save more than a trillion dollars per year. You heard that correctly. It would not all come in the form of reduced government spending, it would also benefit businesses that provide insurance to employees and individuals who purchase their own insurance coverage. But I would rather waste that trillion dollars every year than endorse a system that contradicts my personal philosophy that our society owes its members no duty to ensure access to adequate medical care, and that the government should simply defer to market forces.

"You have probably noticed that I always speak of Medicare and Social Security. In fact, if you read nothing but my columns you might believe that I'm talking about a single program called 'Medicare and Social Security', even 'MedicareAndSocialSecurity', rather than two distinct programs. The reason for this is simple: healthcare inflation in this nation ensures that, absent reforms, Medicare spending is likely to continue to grow at an unsustainable rate. On the other hand, it would take modest adjustments to Social Security to have it be fully funded for another seventy-five years or century, even with conservative estimates of economic growth. I address the two issues together, as I want to use the budget projections for an unreformed Medicare program to take out Social Security, and I'm deliberately trying to confuse you about the relative financial stability of the Social Security retirement program.

"By cutting programs I oppose, I can ensure that there will always be money for programs and government ventures I support. You hear people complain about corporate welfare? Excessive military spending? The high cost of wars of choice? Pocket change, I tell you. And it's my firm belief the government should pick that change out of your pockets so that the programs and military adventures that I support can continue unabated.

"Also, frankly, I can keep tapping out two columns a week until the day I die, so I don't understand why everybody else can't do the same thing, even if they're manual laborers. I mean, typing is manual, so in a sense I'm a manual laborer, right? Ask any of my friends: Work isn't hard and as far as we're concerned people don't need to retire.

"You can disagree with me if you would like, but I will never cede an inch.

"I have also misled by suggesting that a modest, progressive tax increase to a level that history tells us won't impede economic growth represents some form of class warfare against millionaires and billionaires pay their fair share will solve much of the problem. It isn’t. I complain that modest tax increases on the nation's wealthiest earners, such as the President's plan, is estimated to only raise $440 billion over a decade. I complain that a modest increase in the capital gains tax, a tax Republicans used to argue should be taxed at the same rate as wages, will 'only' raise $236 billion over a decade. Now if we were achieving that type of boos from cutting Medicare or Social Security, I would be all over it. But we're not picking your pocket here - we're picking mine.

"I have repeatedly attempted to mislead you by pretending that we're not in a recession, and that the only possible source of new government revenue over the next decade would be that modest tax increase. I don't mention a return to a healthier economy and lower unemployment, because I want to complain that taxes on people like me won't be sufficient, in and of themselves, to balance the deficit and thus should not be imposed. I expect you not to notice that if we can save $70 billion per year by cutting Medicare benefits, no cut is too small. When I complain that 'projected deficits total $10 trillion' I expect you not to figure out that I'm talking about less than we could save right now by transitioning to what would still be a high quality national health insurance plan.

"You may have noticed that my argument isn't based in much of anything other than not wanting to have my tax bill go up. I offer no reason why I can't pay more. If I tried, you would probably start laughing. So instead I'll insist that even if we substantially raise taxes on the rich we still won't balance the budget, and hope that you don't notice that I'm still begging the question.

"I argue that we should reduce benefits for healthier retirees, hoping that you won't pay attention to the fact that retirees are more likely to maintain their health when they have access to quality health care. I argue that we should reduce benefits for wealthier retirees because I expect that once people of my class are getting less it will be easier to convince them to cut benefits for everybody else. And as we're keeping our pocket change - and trust me, we have a lot more than you - and often have gold-plated supplemental health insurance policies to cover the difference, none of us will have go to without. The point being, I'll argue that I want to minimize deficits, but my primary goals are to avoid other program cuts and tax increases."
Next we can revisit Samuelson's "President Romney" speech....
"Fellow Americans. The budget outlook is not as bad as I like to claim. Here's the truth: I want to cut programs that benefit you, because I don't need them. I'm rich, I'm well insured, I have a phenomenal income for a job I can easily perform for many years to come, and I thus simply don't care about programs like Medicare or Social Security. Yet if we preserve those programs without adopting the cost-saving measures taken by every other developed nation, even if my taxes go up a few percent, something I find unacceptable, we cannot balance the deficit without cutting programs that I believe to be important programs — military spending, including the ability to spend hundreds of billions or trillions of dollars on wars of choice in the Middle East and South Asia, and... I'll list a few programs that I would prefer not to cut and pretend that they're my real focus: the FBI, highways, the Centers for Disease Control and Prevention, the Border Patrol and others. The cost of cutting spending that I like the would be too great, whereas it's no skin of my nose to cut the programs you like but I don't care about. You've figured me out: I talk a lot about having to make 'tough choices,' while quietly chucking to myself, 'tough for you.'

"Did I forget to include education in that list of programs that I don't want to cut? The EPA? Nope. I'm perfectly happy to cut them. If I complain about school funding, you can expect that my argument is against teachers' unions or how to shift spending from state-run schools to the private sector where my peers - and my employer - can extract profits. My peer group loves to talk about the failure of public schools, but for the most part we send our kids to private school. Sure, we want some basic level of environmental protection, but we don't much care if coal mines destroy landscapes or pollute remote parts of the country we'll never visit, if brownfields in the inner city remain toxic, or even if the planet warms. We do genuinely care about global competitiveness, but we don't like to admit that where you see pollution we see a potential expense that could lower profits - and thus lower share prices and dividends. When we balance your interests against ours, we want to maximize the growth of our portfolios and profits.

"For the past 40 years, federal spending has averaged 21 percent of GDP, so I'll pretend that the world is static and that we can arbitrarily cap government spending at a slightly lower level than that average without examining what government actually does. And by imposing that arbitrary cap, I have grounds to arbitrarily cut other programs that have a low-priority for me, such as Amtrak. Unfortunately it's not enough to cut small programs that don't benefit me, as those savings will be more than offset by an aging population and health costs.

"As you know, I roll Social Security and Medicare into what sounds like a single program so I can pretend that they both must be slashed. For example, I make comments like, 'From 1972 to 2011, Social Security and major federal health programs averaged 7 percent of GDP; in 2020, they’re estimated at 12 percent of GDP.' I use that as the foundation for making hyperbolic statements like, 'Unless we control these programs, they will strangle the rest of government.' Truth is, I oppose reforms of Medicare and health insurance that could save our nation a trillion dollars a year on ideological grounds, and I know that some modest tweaks will leave Social Security solvent for the indefinite future, but I don't want to fix these programs - I want to slash them and, ideally, burn them.

"I will tell you that you should forget tax cuts, but don't let that fool you: I want the so-called 'Bush tax cuts' extended, so that I don't have to pay more taxes. I may demagogue that the scheduled expiration of that temporary tax cut represents a tax increase, imply that it's 'soak the rich' class warfare, or that the amount of money it would raise is insufficient to justify the burden on me, but don't get distracted. It's your tax cut I don't care about. I care very much about mine, and I intend to keep it.

I will argue that it is obvious that we should try to simplify the system and spur economic growth by cutting top rates and ending tax breaks, because that sounds good even though I can't make the case that it would work. Frankly, the biggest problem with my wish to cut taxes on people like me is that would require cutting tax breaks that provide a significant benefit to people like you, such as the mortgage interest deduction — and you'll probably object. But to balance the budget, we’ll still need to raise more, not less, tax revenue from the income tax or other taxes and, as the saying goes, better you than me. Since 1972, tax revenue has averaged only 18 percent of GDP and I should have been more honest with you over my tenure as a columnist that I want you to feel the pain of the tax increases and benefits cuts necessary to bring the budget into balance because the unacceptable alternative would be that I and my wealthy, insulated peer group feel some of that pain.”
A revision to Samuelson's closing:
As long as their remains a chasm between my Op/Ed rhetoric and governing realities I will do my utmost to haunt whoever wins. My traditional positions highlight a dilemma of democracy. People want their opinion leaders to tell the truth, but they are often misled by carefully crafted, deliberately misleading rhetoric. Somebody who is truly interested in helping our government form good policy might escape this trap by persuading public opinion to acknowledge distasteful problems. For example, it's much easier to demagogue against 'socialized medicine' and complain that Medicare - or should I say MedicareAndSocialSecurity - are going to bankrupt the country, but the truth is that adopting a quality program of national health insurance could bring the budget to near balance while giving us many more years, even decades, to work on ways to tame healthcare inflation. I'm not arguing that a national health insurance plan, even one that utilizes private insurance companies, private hospitals, and privately employed physicians, is an ideal solution, but I am going to abandon my lie by omission - those programs do exist and they represent a real solution we could implement right now.

"Alas, in my line of work, that level of candor in commentary is rare. Most pursue self-interest over truth even if this deepens long-term public mistrust. Sure, if you work hard for the people and point out the truth behind my brand of 'tough choices' sensationalism, you can be the big man on campus, and I literally mean on campus. But some of us didn't work hard enough to get Ph.D.s, let alone write textbooks or win Nobel prizes. You won't normally hear it from us, but there's a lot of luck in getting a nationally syndicated column, most of us don't actually have special qualifications that make us any better at analyzing these issues than you are. And once you have this job, if you play your cards right you'll be topping up your 'six figures for two columns a week' salary with five to six figure speaking fees, promises that your next book will be purchased in bulk or distributed through partisan book clubs such that you can command massive retainers and royalties, and you can rub shoulders with the most powerful political and business leaders in America.

"If I appear to favor Wall Street over Main Street, and Main Street over you, that's in part because that's the culture in which I'm immersed - that's actually the way my friends and I think. But when my values and priorities conflict with the wealthy and powerful interests whose favor I seek or want to keep, I'm going to be on their side. And that, pretty clearly, is why I'll tell you that we 'must' slash programs that benefit you, in order to preserve tax cuts and programs that benefit us, and won't mention alternatives that would work to your advantage and advance my stated goals but really, truly antagonize the people who keep columnists like me afloat on a giant sea of cash.

"You've surely noticed that my arguments on what government should do focus on dollars and deficits, not how we should evaluate and weigh competing priorities, certainly not on the human cost of the type of spending cuts I favor. Honestly, it's easier to get you to swallow this type of argument when I leave that stuff out, and my argument tends to fall apart when I have to start defending my priorities in concrete terms." If I scare you it's on purpose, because if you start thinking you're going to start seeing the holes in my arguments.


Update: Roger Cohen's latest column reminds me of a combination of what Ignatius was saying a year ago, combined with the comments Frum referenced. I criticized Cohen a few weeks ago for what I believed to be an unfair criticism of Obama; this column seems a bit soft on Obama. I want to be fair, myself, but it really is time for our nation to form and articulate a coherent policy on the Middle East and South Asia, as well as moving our formalized relationship with Europe out of the cold war era.

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