Re: State of the Union

[Michael Bindner <bindner@IowaFiscalEquity.net>]

Lynn,

 

The affects of social insurance could still be achieved by insuring the employee-ownership investment accounts (whether they are traditional ESOPs is another matter).  More importantly, inequality would be lessened if workers were able to control their shares and put a stop to Enron like policies which are more common than most believe. 

 

Of course, I agree with you on the problem of bad numbers.  I think the right wing assumes that the infusion of secondary investment capital will lead to growth, although we all know it will simply lead to higher commissions and stock prices.

 

All this aside, labor can do MUCH MORE than just saying no on social insurance grounds.

 

It can make the point ferociously that these shares would vest more control in management and the investor community, leading the entire economy in the direction of ENRON.

 

It can insist that any reform that does occur on the revenue side include raising the income cap (although to get this, some concession may or MAY NOT be necessary on private accounts, possibly 1% of income from the employer contribution to company stock controlled by the worker or union and 1% in a private 401(k) type account).

 

It can insist that a more realistic, history based number be used by the trustees in their official forecast.

 

It can insist that the employer contribution be credited equally at the average wage, rather than as a match to the employee contribution.  This would not lead to any additional taxes and would make the revenue side look more like the benefit side (and take the wind out of the drive for private accounts - since part of the desire here is to end redistribution).

 

If Labor makes these points it will move the ball forward on our side, even if the net effect is to kill action (since the right wing will bauk at much of this).

 

Mike

LynnRWilliams@aol.com wrote:

 

Marc -

 

I am sure that you know, but should there be any confusion, the labor movement is unalterably opposed to the privatization of the social security system.  It has been and is by far the most important and effective antipoverty program in the United States.

 

The "crisis" is being engineered by those who want Wall St. to have an enormous opportunity to move into the system for its own enrichment, and those in the U.S. to whom the Administration has been giving back their taxes and who have lost whatever sense of social responsibility they may once have had.

 

There are many ways to solve the "crisis".   Removing the income cap on those who contribute is one direct way.  Seeing what happens with economic growth is another.  Those who make the dire predictions do so on the basis that there will be little or no economic growth but economist Paul Krugman has pointed out this week that the same people, in predicting the great succes of private accounts, use estimates of stock market growth that have never been remotely achieved.  If those same growth rates are used in predicting the future of the present system, Krugman says, there will be no "crisis" for generations to come.

 

The wealth being generated by dramatic increases in productivity is being distributed far too inequitably.  Were it being shared more equally, the present level of payroll taxation would obviously provide a much more substantial income for the social security system.

 

I do not think we should be looking to the destruction of social programs as the basis on which to build an emloyee ownership based economic structure.

 

Lynn

Michael Bindner

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