Those who sanctimoniously shout from the rooftops that they want
to "save" Social Security are members of the same crowd who
violently opposed it when it was started in 1935, and who have
opposed every real effort to improve it ever since.
An example of their duplicitous motives was the increase in the
retirement age to 67, and their proposals to raise it higher.
Retiring at 67 can be a good thing if you're white and you're a
management consultant, stock broker, college professor, lawyer,
doctor or corporate executive. Your body will allow you to work
until you're 90 -- although you can retire on your own by age 60 --
and you don't have to pay taxes to support the retirement of those
who helped make you rich by performing society's hardest, most
necessary and lowest-paid jobs.
But let's face it. If you're an average black man with a life
expectancy of 67, it's not such a good thing. It's also a bad deal
if your job wears your body out before you are 60 -- orderlies in
nursing homes and hospitals, workers in construction, sanitation,
coal mines, the chicken processing industry, and so on -- and you
simply can't produce as you once did.
If Social Security is partially privatized, who will be the sure
winners? Even the conservative financial news media admit that one
of them will be Wall Street. Fortune magazine noted that "Gambling
may be legalized. ... Wall Street is salivating at the prospect of
investing even a fraction of the half-trillion-dollar Social
Security trust fund."
The Wall Street Journal opined that "The politically charged
issue of allowing workers to divert a portion of their Social
Security taxes to individually controlled accounts investing in the
stock or bond markets is back on the table, and speculation about
the windfall that Wall Street would reap already is swirling."
Other sure winners are politicians who receive campaign donations
from lobbyists for mutual funds that hope to be among those chosen
to receive the federal largesse. Also included are the apparatchiks
of the securities industry who have traditionally demanded huge fees
for providing such a worthy public service: stock analysts, lawyers,
accountants, fund executives and owners, etc.
Social Security retirees also may win, if:
• They happen to choose a mutual
fund that actually increases in value, after every professional
associated with it has taken his cut, and
• Globalization doesn't totally
destroy working Americans' incomes and ultimately our economy -- and
the stock market, and
• The exploding federal deficit
doesn't destroy our economy, and
• Our trade deficit can be turned
around and we actually begin to export more than we import.
If any or all of these qualifications ends in disaster, then what
is our country going to do to bail out those who invested unwisely
in the wrong politically "approved" mutual funds?
What a sweet deal privatization is for our conservative
politicians and the securities industry. They get ironclad, surefire
benefits and take none of the risks. Those who are taking all the
risks are individual Social Security retirees, many of whom don't
know the difference between a stock and a convertible bond.
As it now stands, Social Security is the most efficient
government program we have, with yearly administration costs
hovering around 1 percent. Think of what will happen to that
statistic after the securities industry takes its cut.
The right way to fix Social Security, if investing in the stock
market is your main solution, is to let the experts take the risks.
If Merrill Lynch, PaineWebber, Morgan Stanley Dean Witter, and all
the others honestly believe that funds can be better invested in
stocks instead of in short-term U.S. government securities, then let
them bid on chunks of the Social Security funds.
They would guarantee the government a specific return in exchange
for the opportunity to use Social Security funds to play the stock
market. If they invested well, they would make a legitimate return
for their efforts. If not, they would suffer a loss.
In exchange, the taxpayer and the retiree would be assured a
better return than short-term government securities. It wouldn't be
a windfall, but it would also remove the risk -- which is supposed
to be the purpose of Social Security in the first place.
Chuck Kelly is a retired management
consultant living in Tega Cay, S.C., and author of "The Destructive
Achiever; Power and Ethics in the American Corporation" and "Class
War in America." Write him at email@example.com.