It’s been some time since we offered anything on the subject of David Brooks, so here is something at last. Today in the Times opinion pages, Brooks modestly offers to assist President Bush, after the Prez’s State of the Union offer to listen to “other people’s ideas on how to fix social security.” (We wonder why President Bush would start listening now. Is this his idea of consensus-building—an eleventh-hour olive branch to all persons outside his sphere of absolute certainty and infalliability? Have his “mandate” and “political capital” so quickly evaporated in the wake of his train-wreck budget—a modest proposal that will have Republicans eating children for decades to come? Never mind, live for today!)
Now, just as a light-hearted prelude, let’s just consider how modest Brook’s offer of assistance really is. Considering that President Bush doesn’t even read newspapers—it seems possible that he doesn’t read at all—that’s a good one. Ha ha!
But we’re a little disappointed that Brooks’ thinking on this subject isn’t really up to snuff for the Times. In fact, it’s as fuzzy as his whole impressionistic “Bobos” daydream, and we’re surprised an editor didn’t catch it. In an effort to refine the whole idea of personal retirement accounts as a way to fix the unbroken social security system, Brooks dredges up the old idea of KidSafe. This was a bootless bipartisan taradiddle from the dark ages (the 1990s) that proposed establishing a $1000 savings accounts for all American children the day they are born. This amount would be tendered from the government, but—accforing to Brooks’ interpretation—it would be “invested in a limited number of mutual funds, but it couldn’t be withdrawn until retirement.”
So far so good. Sounds terrific. Except that for Brooks, this is a slam-dunk strategy for establishing the President’s chimeric “ownership society” based on the simple and absolute truth of “compound interest.” Brooks enthuses:
“Over decades, it would grow and grow, thanks to the wonders of compound interest, so that by the time workers retired, they would each have a substantial nest egg, over $100,000, waiting for them.”
Now, we count ourselves among the world’s most incompetent financial managers, and even we see a problem here. Brooks is apparently even dumber than we are. Compound interest is one thing, and a mutual fund operating in the open market is quite another. We can barely remember our own social security number, but we do know that putting money in a stock is not the same as putting it in a bank.
It’s a useful confusion because it obscures what they are really proposing: Bush and the people he will undoubtedly listen to most closely want more than anything to turn Americans’ money over to private concerns on Wall Street. As is always the case, Wall Street will take its cut, win or lose—the commission is the same whether you’re buying high or selling high, and the Plain People of America will leave their financial security exposed to the whims of the marketplace, with an equal chance of losing as much as they might gain.
We’ve said it till we’re blue in the face. It is not possible for 100 percent of Americans to be in the top one percent of taxpayers, and the sooner ninety-nine percent of Americans realize this, the better.
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