18 February 2005

Elephantine Purity and Social Security

A story in the Washington Post this morning indicates that two senior Republicans in Congress--the Speaker of the House (Dennis Hastert) and the Majority Leader (Tom Delay) oppose raising the limit on Social Security taxes so that earnings greater than $90,000 would be taxed. Delay said (on Fox News) that "This Republican House didn't come here to raise taxes," and pointed out those earning more than $90,000 would see such a step as a tax increase. On the other hand, allowing a higher retirement age can be considered. Note that a higher retirement age in effect means a reduction in benefits. (We will need such a reduction, but we will need less the more revenue increases.)

This is precisely the kind of narrow attitude--I hesitate to call it thinking--that will lead us either to reform Social Security badly or to chuck any reform at all. This is pure ideology, with no consideration of practicality or fairness. Democrats are quite capable of spouting ideology-inspired nonsense on their side, of course. But to have Republican leadership nix any increase in taxes at all, even on people who are undeniably well off, is irresponsible. It suggests that the coming deficit in Social Security may well be reduced solely by a reduction in benefits. That does no one a favor.

We still do not know the specifics of the president's program. The Post article suggests, using Kremlinological-style analysis, that the president is more flexible than his Congressional colleagues. Nor do we know how wedded to that program the Congressional Republicans will allow themselves to be. Conflict among the elephants seems likely, which makes any outcome uncertain. (An African proverb seems apposite: "When elephants fight, the grass suffers.) It would be better if people on both sides of the issue--on both sides of the aisle, on both ends of Pennsylvania Avenue--would follow the promise of the president to "Keep everything on the table...." It would be better if they could cooperate with their ideological opponents in calm, with tolerance, to find a solution that served the public interest. But that might require compromise; purity will out, or so it seems.

11 February 2005

What to do with North Korea

Yesterday's announcement by North Korea that it had nuclear weapons was an unpleasant surprise that will force the Bush administration--and other governments--to make unpleasant choices. It must choose between accepting the new, more dangerous, status quo or to force a crisis will potentially catastrophic consequences.

The North Korean regime has shown more than once that it is comfortable with brinkmanship. Nor is it at all clear that they know where the brink is. They are quite capable of crossing it. Put another way, their rationality can be questioned, which is never a good quality to find in either side during a crisis.

So, what can be done? Can we dissuade the North Koreans from remaining a nuclear power? They clearly take pride in joining the nuclear club. Judging from their statements, they see the United States as inalterably opposed to them. The United States is, by assumption, an enemy, and, by rhetoric, shall forever be so. Bush administration policy can be blamed in part. From the beginning, it has taken a hard line against North Korea in general. In particular, they have been allergic to talking to it, especially one-on-one. But paranoia of the regime make it likely that it would find even the most conciliatory occupant of the White House hostile.

Can we bring pressure on them? We have no trade to speak of, nothing to withhold. Military action is always dangerous, but the willingness of the North Koreans to court danger makes it especially perilous. How might they react? By attacking South Korea? By setting off a nuclear device? One has to expect the worst possible actions imaginable that they might take. In addition, any military action we take must have permanent effects. Otherwise, we will have simply postponed the inevitable. The effects of any action short of occupation of the country are likely to be temporary. There is scarcely a need to point out why we cannot try to invade and occupy it. Nor do I see policymakers in Washington, Beijing, or elsewhere advocating such a step.

In truth, we do not have the leverage to do anything effectively on our own. Others--the Chinese, the Russians, the Japanese, the South Koreans--have more tools available. The Chinese in particular could wreak havoc on the weak North Korean economy. Any action the United States takes must be taken in concert with others. But do they see the threat from North Korea as dire enough to threaten actions severe enough to get the North Koreans to renounce weapons that they seem clearly to want? It seems not.

It seems almost inevitable that we and the rest of the world will come to accept North Korea into the nuclear club. We will, sooner or later, begin to talk to it with the aim of reducing the dangers that their nuclear weapons pose. This is far from ideal. The Kim Il-Sung regime is dangerous and loathsome. Any moves toward the new nuclear power threaten to encourage others tempted by the nuclear genii.

Yet, as I have suggested, there is little choice in the longer term. A good aspect of beginning to talk now, rather than simply bluster and threaten actions that are not likely to get North Korea to renounce the weapons they have acquired, is that we may be able to sow seeds of trust that might blossom when the current regime disappears. And it will. After all, no communist regime is forever.

03 February 2005

Two Minds on Social Security--Open and Closed

President Bush gave two messages about how to approach the problem of social security. On the one hand, he said "Fixing Social Security permanently will require an open, candid review of the options." He outlined several options from people who are not like-minded, and said all are on the table. That open-minded approach could allow us to make the changes that we need and allow us to meet the responsibilities the president set out, to "pass reforms that solve the financial problems of Social Security once and for all" and 'to make the system a better deal for younger workers."

In the next breath, however, the president seemed to close off most alternatives by bringing up "voluntary personal retirement accounts" and asserting that it is the best choice.

In other words, he has already made up his mind. Given the style of the administration when making decisions, which is to rely on a small number of people and a smaller number of points of view, it is unlikely that another proposal will find its way to the table.

The president has outline the problem of social security and our other retirement programs quite well. We should, indeed, make changes in them to preserve them for the next generation. But the pressure for personal accounts seems to come from predispositions set by the president's ideology--his core beliefs, if you will--and a feeling that he need not compromise on this matter. Given Republican majorities in both houses, he could be right. But it is far from certain, particularly as there will be strong opposition from the AARP and others.

In which case, we will not have met our responsibilities and lost a chance to make changes that our children need.