Friday, August 27, 2004

Government Trust

I don't post on the main page of viewpoint regularly as I feel I don't have that much to say that others would be interested in reading but recent developments have occurred that compel me to speak out.

Specifically, the Chairman of the Federal Reserve, Dr. Alan Greenspan, believes it's time, once again, to declare the need to "trim" the social security and medicare benefits for the baby boomer generation. See: Yahoo news

From the link above: "Federal Reserve Chairman Alan Greenspan said Friday the country will face "abrupt and painful" choices unless Congress acts quickly to trim Social Security and Medicare benefits for the baby boom generation. He said the government has promised more than it can deliver."

The full text of the Chairman's speech can be read at:

Greenspan speach

Notable statements from the link above are:

"Early initiatives to address the economic effects of baby-boom retirements could smooth the transition to a new balance between workers and retirees. As a nation, we owe it to our retirees to promise only the benefits that can be delivered. If we have promised more than our economy has the ability to deliver to retirees without unduly diminishing real income gains of workers, as I fear we may have, we must recalibrate our public programs so that pending retirees have time to adjust through other channels. If we delay, the adjustments could be abrupt and painful. Because curbing benefits once bestowed has proved so difficult in the past, fiscal policymakers must be especially vigilant to create new benefits only when their sustainability under the most adverse projections is virtually ensured."

I particularly like the statements "Early initiatives" which translates into "the sooner we screw these people, the better off we'll be". As well as the statement: "we must recalibrate our public programs". He doesn't mention the fact that, for all their lives, people have paid into these programs, yet, by somebody's decree, the programs will be "recalibrated".

And this statement:

Aside from the comparatively lesser depth of required adjustment, our open labor markets should respond more easily to the changing needs and abilities of our population; our capital markets should allow for the creation and rapid adoption of new labor-saving technologies, and our open society should be receptive to immigrants. These supports should help us adjust to the inexorabilities of an aging population. Nonetheless, tough policy choices lie ahead.

And here's another subtle message: "and our open society should be receptive to immigrants". So we, as a nation, are going to rely on immigrants to bail us out simply because our government has mismanaged the programs to which all of the American citizens have contributed during their entire working lives. And I can't help but wonder why we need immigrants with thousands of Americans out of work.

Juxtaposed with this latest development is this article from Steven Roach of Morgan Stanley. From the link:

Saving is the sustenance of long-term growth for any economy. And yet America is lacking in saving as never before. It has finessed that shortfall by consuming the wealth generated by asset appreciation and by drawing heavily on the world's pool of surplus saving. In my view, there is nothing stable about this arrangement. In fact, there is a growing risk that America's saving shortfall will only intensify in the years ahead -- especially given Washington's total lack of fiscal integrity. As always, the flows will give the impression that this outcome is sustainable. In the end, nothing could be further from the truth.

So, it looks like we, as a nation, have no savings to speak of and, at the same time, Chairman Greenspan is declaring that congress pull the benefits rug out from under the baby boomer generation. the door!

What cracks me up about Chairman Greenspan's statements is that there is no mention of dealing with the current and future payments being made by the baby boomer generation. Only the reduction of the benefits they will receive for their contributions by, perhaps raising the eligibility age to 70 or 80 or 100. In other words, you will be expected to pay into the system until you drop dead.

Ironically, it looks like we are about to revert to an earlier time of self sufficiency when people took responsibility for their own welfare although we'll still be paying the taxes into a system that will probably never provide a return on our investment. This seems to make any discussion of government social programs moot, I would say.

New Philosophy Blog

A former student has a new blog for those who are interested in philosophy. You can access it here. It looks good and he has some interesting posts up. Caution: It's not for the philosophically unserious.

What's He Hiding?

Why, if Senator Kerry is telling the truth about his Vietnam service and has nothing to hide from the voters, will he not permit the reprinting of his book The New Soldier which is so hard to obtain that the single copy available on Amazon is selling for almost $2500? Why will he not sign a form to release his medical records which would help to settle the questions surrounding the awarding of his Purple Hearts? And why will he not permit release of the journal used by Douglas Brinkley in writing his book on Kerry, titled Tour of Duty?

The Democrats demanded that George Bush release his records from his National Guard service and he promptly complied. John Kerry told Tim Russert on Face the Nation that he had indeed released all of his records, but it turned out that he had released only a few pages of a much more copious account.

What other presidential candidate in the history of our nation has ever written a book whose contents he has subsequently done whatever he could to prevent people from seeing? If Kerry wants to repudiate the book now, fine. He should let us see it and then tell us why he no longer holds the positions and sentiments found in it.

What sense does it make to tout one's military service as the central qualification for serving one's country as president and then, when that record is called into question, refuse to make available the very records and journals which would silence the critics?

His refusal to allow the voters to see these documents is inexplicable unless he really is trying to hide something.

Demagoguing Stem Cell Research

The stem cell debate has been demogogued by the Democrats since before their convention, but John Leo puts his finger on exactly what is wrong with the way the left is addressing this issue. Leo writes:

John Kerry has repeatedly spoken of President Bush's "ban" on stem cell research. Kerry knows very well it isn't a "ban" or that Bush isn't "shutting down" research. But "ban" is a powerfully emotional word. It has more impact on swing voters than "allowing private research, but not using taxpayer money for work on stem cell lines derived after Aug. 9, 2001."

The fact is that stem cell research is swimming in readily available funds. With luck, the elite press corps will discover this some time in October, and maybe even ask Kerry about it. The federal government is providing $24.8 million in research funds, which is $24.8 million more than President Clinton offered. Money is pouring in from state governments, universities and pharmaceutical companies. If Kerry thinks this financial gusher still amounts to a ban, maybe he could get the Heinz Foundation or George Soros to pitch in.

Kerry spins the stem cell issue by saying, "Here in America, we don't sacrifice science for ideology." This is a line he has been using for weeks. It delivers two messages, both false: (1) there is no legitimate moral issue here (though plenty of bioethicists and plenty of Kerry supporters think there is); and therefore (2) this is a one-sided issue, pitting enlightened people against backward ideological types.

The lobby for embryonic stem cell funding is deeply dishonest. It involves a "ban" that isn't a ban, a claim of cures "right on our fingertips" (John Kerry) that falsely implies an early cure for Alzheimer's, and a discounting of promising stem cell research that doesn't involve the creation and destruction of embryos (cells from adult bone marrow, teeth and umbilical cords). Kerry and the Democrats have a case to make. They just don't want to make it honestly.

Why is it that the left seems unable to debate this issue or almost any other without distorting the facts? It's as if they believe that unless they twist the truth or mask it altogether they'd be unable to persuade anyone to vote for them. Well, maybe they're onto something.

Leo's column makes several other points about this debate which are very much worth reading.

Does Offshoring Create U.S.Jobs?

No Left Turns links us to an article that discusses a study commissioned in California on the economic impact of exporting jobs offshore. The counter-intuitive conclusions are that offshoring not only is good for the economy but it also creates more jobs than it costs. An excerpt:

How can offshoring preserve jobs? Consider the case of a company that's increasingly beset by foreign competition and can no longer turn a profit. Its choice might be to close down - taking all its jobs with it - or farm out some of its tasks to overseas workers, thus preserving the remaining positions.

"By sacrificing a small proportion of the jobs offered by the company, the other jobs remain," the paper said.

That's not all. The researchers also suggest that offshoring can even create new American jobs.

Companies looking to invest money in expansion base their decision on the projected rate of return. If, by offshoring some jobs those companies can earn a higher return, they are more likely to go ahead with the investment, which then will create more jobs at home.

That's not just economic theory. The numbers in the real world support this view. Between 1991 and 2001, wrote Haveman and Shatz, U.S. firms that expanded their employment abroad also increased their domestic employment by 5.5 million workers. Their share of overall U.S. employment also increased during this period.

This is interesting, but whether it's true or not I have no way to judge. Read the whole article and decide for yourself.