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January 16, 2009

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Yeah, how about that Chesley 'Sully' Sullenberger III!

THAT is an incredible guy.

When does the United States begin taking IMF-prescribed medicine for its economic ills? If our sharpest economic minds presided over the collapse of a system they were incapable of critiquing (at least out loud), what use is their continued stewardship?

Something tells me that entitlement reform will be at the top of their "things to do" list. This will be a fitting capstone to Alan Greenspan's career. In 1983, he helped bring about a near-doubling of FICA taxes so Boomers' SS checks would be paid for in advance. In 2001, he advocated rebating the Clinton surplus mostly to the wealthy (generated, in large part, the same FICA revenues) because "it's your money!" To complete this trifecta, all we need now is to slash SS benefits and curtail any tax increase on the wealthy. When MBAs guard the chicken coop, the foxes take notes.

Obama's conventional-wisdom presidency will win praise from David Brooks and Larry Kudlow. What it won't do is deal with the structural inequities in American economic life. Rather, if appearances are any guide, we'll keep exacerbating the downward slide of the middle class. We'll do this because the American left is too weak to counterbalance the right's huge media advantages. Still, Obama may surprise us by co-opting the right's demonology.

Ultimately, it will be us who decide if our demons are worth the risk of doing too little for the sake of moderation. The pain, after all, is still manageable. Another year, and our focus might sharpen.

Soleri wrote:

"This will be a fitting capstone to Alan Greenspan's career. In 1983, he helped bring about a near-doubling of FICA taxes so Boomers' SS checks would be paid for in advance."

And as we know, SS is a pay-as-you-go system and the increase in FICA taxes went to offset increased defense spending and lower what would have been even more astronomical budget deficits. No benefits were "pre-funded". The SS Trust Fund has no assets which can be drawn upon. Nothing was saved. Nothing was invested. The government's own budget docs (especially the Analytical Perspectives section) makes this abundently clear.

And the thing is, Greenspan HAD to have known this. It's fundamental. He had to have known that he was lying through his teeth, cheating the American people, in order to serve his political masters. So, we can't even talk about good-faith conservatism here, but must regard the act as something more sinister.
Sorry for the melodrama, kids, but that's the way it is.

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