Privatizing the Public Good

[CornField]

http://www.thenation.com/edcut/index.mhtml?bid=7&pid=2118

by Katrina vanden Heuvel

Honest economists will tell you that the financial solvency of Social Security can be guaranteed well into the next century. So why does the President insist on adding private retirement accounts into the reform mix? Because their purpose is not to save Social Security but, like a Trojan horse, to destroy it. Personal accounts are part and parcel of Bush's domestic policy agenda: an assault on the very concept of The Public--its goods, services and trust.

Social Security, which provides a public good: the minimum financial security of retirees, is only the latest example. Faith-based initiatives were the privatization of government social welfare programs to religious institutions. Vouchers were the privatization of public education to religious schools. Drilling in the Artic National Preserve is the privatization of public lands for corporate profit. Even national security, the ultimate public good, has been partially privatized: "Security contractors" (mercenaries in the old parlance) were interrogating prisoners at Abu Ghraib, before the scandal broke.

Privatization shouldn't be confused with free enterprise. It is not capitalism; it is crony capitalism--the diversion of tax-dollars from the government to private individuals and institutions. Faith-based initiatives divert tax revenues to private religious institutions. Personal retirement accounts will divert a significant portion of payroll taxes to Wall Street in the form of management fees.

It should be no surprise that Bush and Cheney are proponents of privatization, because they--just like the oligarchs of Russia--have been its beneficiaries. Cheney's fortune was made at Halliburton, which profits handsomely from the outsourcing of Defense Department functions. Bush's fortune was made from the sale of the Texas Rangers, whose value was significantly enhanced by Arlington city taxpayers.

In this light, the Armstrong Williams scandal is not an aberration: It represents the partial privatization of White House public relations. The victim in this case is the public's trust in the independence of the press. But the public shouldn't expect an apology from the Bush Administration. Hate means never having to say you're sorry.

[oecher3]

1. well said...

But there is more to it than just management fees. Think of who manages also decides where to invest, often sits in the auditor positions or is connected to electing the board. The more money is diverted to Wall Street the more it is funneled into retirement accounts held by brokerage firms. And the more money these firms hold and shift, the easier it is to create a new bubble. And now that Mr Greenspan is part of the Administration and has lost its independence (willingly or by pressure), this whole economy is easy to hijack from within.

[BRLIB]

2. Nice, but need to emphasize

that it is really "piratizing" not privatizing.

Privatization in the "honorable" sense is not crony-capitalism.

True privatization would be ---

"We take no money out of your check whatsoever for social security. You invest whatever portion you desire in your retirement as you see fit."