This Week:

Quote of the Week

Sara Olson Benefit Location Changed

Head For Philadelphia! (Includes Websites of the Week)

The Principles of Social Security, Part 1

Greetings,

Last week I published a piece in the local bi-weekly newspaper Siren called “Social Security: Principles and Values.” It was a short piece, so I am taking the opportunity this week and next in Nygaard Notes to run a longer, and somewhat different, version of that article. This one focuses on the principles as they relate to the “privatization” proposals put forth by Minnesota Senator Rod Grams and would-be president George Bush.

Several readers pointed out to me that last week’s “Quote” of the Week from Manning Marable - "It's not good enough to just interpret the world. You have to find a way to change it." - was plagiarized from a German philosopher named Karl Marx. Well, if you’re gonna plagiarize somebody, that’s a pretty good person to plagiarize, I guess. In any case, I still like the quote.

Thanks to all the readers who wrote me this week. Your comments are much appreciated. Next issue: Bastille Day.

Nygaard

"Quote" of the Week:

“Many elderly people joined H.M.O.’s to get outpatient drug benefits, but they may lose those benefits when they are forced out of H.M.O.’s....They can try to find another H.M.O., but there is no guarantee that other health plans will be available or have the capacity to take them.”

- The June 30th New York Times, in an article headlined “H.M.O.’s to Cancel Coverage of 700,000 Getting Medicare.” 734,000 Medicare beneficiaries have already been dropped by H.M.O.’s in the past two years.

Sara Olson Benefit Location Changed

Last week I talked about a fundraiser for the legal defense of Sara Jane Olson. Well, due to factors beyond their control, the location has been changed. Date and time are the same - July 9th from 2:30 to 5:30, but the new location will be at Lake Harriet Community Church, 4401 Upton Avenue South in Minneapolis (near the Linden Hills Coop and Great Harvest Bakery).

Head For Philadelphia!

Anyone who has ever been a part of an organized, or unorganized, effort to challenge the status quo (or, as the bumper sticker says, “Subvert the Dominant Paradigm”) has dealt with the standard and expected ridicule and scorn that comes from powerful people who are threatened by their ideas and actions. One of the best examples is the current wave of demonstrations against the World Trade Organization and the various global financial institutions that are a part of it. There are many variations of the trashing that the demonstrators get, but a number of mainstream commentators have compared the protesters to Marlon Brando in some old movie which I have never seen. In the movie, someone supposedly says to Brando (or maybe James Dean, who knows?), “What are you rebelling against?” and he says, “Whaddaya got?” A principled opposition to an unjust economic order is thus reduced to adolescent rebellion against authority.

In my opinion, the variety of issues being protested is one of the great strengths of the new anti-globalization movement. To see the interconnectedness of these various concerns is a great leap forward for those concerned with social justice. Past political movements have often been too narrowly-focused. Many people in the anti- Vietnam War movement, for example, allowed that specific war to be the beginning and end of their focus, failing to see the Vietnam War as a logical outgrowth of the drive for U.S. domination of markets and societies around the globe. So, when the U.S. troops were pulled out, the movement went flat, and many within it went on to live lifestyles that make inevitable the future wars we’ll need to expand the American empire. And I don’t use the word “empire” loosely.

All of this is by way of encouraging folks to head out to Philadelphia at the end of this month to make your presence felt at the Republican National Convention. Activists from all over the country - and the world! - will be there to attempt to inject a little reality into the Land of Oz that the Republican leadership will be attempting to create to surround the coronation of George W. Bush as the official Republican nominee. The convention will be held from July 31 to August 3. Far from adolescent rebellion (although there will be some of that, too, and more power to them!) this event should be an inspiring example of a broad-based and multi-headed group working together to, as the organizers say, “call for a new direction for our nation.” Demonstrators will be coming from every corner of the country “to say NO to business and politics as usual and YES to new priorities for our nation and the world.”

Here’s the list of new directions the organizers published on their website.

• Instead of full healthcare for all, insurance companies and for profit hospitals make billions out of people's misery.
• Instead of our elders enjoying their well-earned retirement, they are often forced to decide between medicines and food.
• Instead of getting a Living Wage, people are forced to toil for substandard wages in sweatshops and maquiladoras.
• Instead of job-training programs, more police are hired.
• Instead of new schools, more prisons are built.
• Instead of working to rehabilitate our prison population and return them as productive members of society, the numbers of prisoners continues to grow and the death penalty and imprisonment falls unequally on people of color.
• Instead of eliminating the oppression of women and honoring their right to control their own bodies, some people are trying to turn back the clock.
• Instead of fair and equal treatment for immigrants and refugees, hate-mongers encourage discrimination and fear.
• Instead of recognizing the full human rights of all people regardless of gender, race, disability, sexual orientation or national origin, people lose their jobs, their children, their homes, and their lives because of those who fear and hate.
• Instead of giving our teachers, caregivers, and service workers the honor and support they deserve for their crucial roles in society, they are often underpaid and underappreciated.
• Instead of open elections on a level playing field, elections are being bought by the unlimited power of rich campaign contributors.
• Instead of respect for our environment, the planet has been brought to the brink of an environmental disaster.
• Instead of working for peace among all peoples and all nations, billions are poured into the coffers of the arms merchants.

The above list is lengthy, but I’m sure it’s not comprehensive (no mention of the arts!). You’ll have to be there to get the whole picture. If you can’t be there, I encourage you to follow the event and talk to your friends about it.

If nothing else, the event can supply you with a lesson in the nature of information and media in 21st-Century America. To see what I mean, use the following 2-Part Process: 1) Check the mainstream press for coverage of the GOP convention. 2) Check alternative sources for information on the same event. I think you will find two very different stories. Many of the facts will be the same, I predict, but the emphasis, placement, and context within which those facts are placed will make you think you are hearing about two different worlds.

Any mainstream press will do for this exercise. The most mainstream is perhaps National Public Radio, which is beginning to sound more and more like the official State Radio. For alternative sources, I recommend Pacifica Radio’s “Democracy Now,” with Amy Goodman and Juan Gonzales. In the Twin Cities, the show can be heard at noon, with replays at 5 am, on KFAI Radio. 90.7 or 106.7 FM on your dial. Local listings for other places around the country can be found on the Democracy Now website at www.pacifica.org/programs/democracy_now (click on “More DN” and select “Stations”).

In any other country, I could recommend a daily newspaper that would give an alternative point of view, but there is no daily alternative newspaper in the U.S. of A. For written-word alternatives, you’ll have to go to the Internet. A couple of decent sites for alternative sources of breaking news on the web are AlterNet at www.alternet.org/index.html, and Common Dreams Newswire at www.commondreams.org.

I most likely will say a few words later on about the Democratic Convention in LA on August 14-17. In the meantime, check out the website of the Mobilization to Protest the Democratic National Convention 2000 at http://www.d2kla.org/.

The Principles of Social Security, Part 1

The current discussion about Social Security revolves around two basic positions. The liberal position is to maintain the fundamental character of the program, with minor reforms on the financing end to make the numbers work. This is essentially Al Gore’s position, although his ideas are a little more interesting than the average. The conservative position, as proposed by George W. Bush, is a radical proposal to change the fundamental character of the program away from a universal social insurance program and toward an individual investment system. This is often, somewhat misleadingly, referred to as “privatization.”

Although Al Gore’s position is worth talking about, I am not going to do it here. For those who are interested, I published an analysis of Mr. Gore’s position in the July 10th issue of Access Press. You can find it on the newly-rejuvenated website of the Social Security Project of Minnesota (more on this next week.) This week I want to talk about the effect that a privatization plan like Mr. Bush’s would have on the principles around which Social Security is organized. First I will describe briefly the Bush proposal for Social Security (I call it the PRA Plan, for “Personal Retirement Accounts”). Then I will list the nine principles of Social Security, as articulated by Robert Ball, a former commissioner of Social Security and founding member of the National Academy of Social Insurance (website: www.nasi.org). Finally, for each of the principles I will talk about how an individualization of the system, such as Mr. Bush proposes, would affect that principle.

George W. Bush’s Plan

Mr. Bush’s proposal is pretty scarce on details so far, but it would essentially work like this: Individual workers would be allowed to take some of the payroll taxes they currently pay to support current beneficiaries, and divert them into their own private, individual accounts. Each such Personal Retirement Account (PRA) would be invested in something or other, maybe the stock market, and would earn money until the worker retires. Then that worker would use the money in the account to finance his or her retirement. Minnesota Senator Rod Grams has introduced legislation that would do this same thing, only to a much more extreme degree.

There are a million crucial details to think about (such as, How are we going to pay for current benefits if we take some of the tax money out of the system?) but I have written about, and will write about, those things elsewhere. Whatever the details are, they don’t matter for today’s purposes. Today I want to talk about the basic idea of switching from a social insurance system, such as we have, to an individual, pre-funded pension system, such as Mr. Bush and Mr. Grams have proposed. Any version of a PRA-type system would seriously undermine some pretty important principles, as I will begin to illustrate right now, by listing the Social Security Principles and the corresponding “PRA Effect.”

Social Security Principle #1: Universality. Social Security coverage has been gradually extended over the years to the point where 96 out of 100 jobs in paid employment are now covered. The goal of complete universality is now within reach, with only certain state and local workers still outside of the plan. Proposals have been made to bring those workers in and make the program truly universal.

PRA Effect: None.

Social Security Principle #2: An Earned Right. Eligibility for Social Security benefits and the benefit rate are based on an individual's past earnings. This principle sharply distinguishes Social Security from welfare and links it, appropriately, to other earned rights such as wages, fringe benefits, and private pensions.

PRA Effect: Since much of the money in a PRA account would come from earnings on stocks, or interest on bonds, the benefits ultimately received would be only somewhat linked to wages earned. Benefits would not be a “right,” since one could end up with no benefits if the market crashed at the wrong time. And since PRA benefits would be partly acquired through luck or good investment skills, which are unrelated to one’s work life, PRA benefits would only partly be “earned” in the sense of being related to one’s work life.

Social Security Principle #3: Wage-Related. Social Security benefits are related to earnings, thereby reinforcing the concept of benefits as an earned right and recognizing that there is a relationship between one's standard of living while working and the benefit level needed to achieve income security in retirement. Under Social Security, higher-paid earners get higher benefits in total - while, at the same time, the lower-paid get more for what they pay in, since the percentage of their replaced wages is higher.

PRA Effect: Bad investment choices or bad luck could cause one worker to receive substantially less in benefits than another worker who earned the same wages during their work life. Benefits would thus move away from being Wage-Related and move toward being a reward for good decisions or good luck.

Next week: Social Security Principles 4-9. Stay tuned