November 2013 archive

Cross posted from The Stars Hollow Gazette

As recounted by relapsed blogger David Dayen, intrepid blogger, economist and former college professor Duncan Black, aka Atrios, became frustrated with stagnating wages over the last ten years that have been putting working class families at risk of being unable to sustain their standard of living past retirement.

(I)n late 2012 he embarked on a sustained crusade, on his blog and in a series of columns for USA Today, to inject a single idea into America’s policy discourse: “We need an across-the-board increase in Social Security retirement benefits of 20 percent or more,” he declared in the opening of a column for USA Today. “We need it to happen right now.”

The proposal was not exactly attuned to the political winds in Washington. Indeed, for anyone inclined to think in terms of counting potential votes in Congress-especially this Congress-the idea of expanding Social Security is the epitome of a political non-starter. Black’s proposal was attuned, however, to a mounting pile of research and demographic data that describes a gathering disaster. The famously large baby boom generation is heading into retirement. Thanks to decades of stagnant wages and the asset collapse of the Great Recession, more than half of American working-class households are at risk of being unable to sustain their standard of living past retirement. To put it even more starkly, according to research by the economists Joelle Saad-Lessler and Teresa Ghilarducci, 49 percent of middle-class workers are on track to be “poor or near poor” after they retire.

There is very little safety net left to break this fall. The labor market for older workers is bleak. Private pensions are largely a thing of the past. Private savings are so far gone that some 25 percent of households with 401(k) and other retirement plans have raided them early to cover expenses, and a growing number of Americans over age 50 find themselves accumulating, not settling, debt. On the whole, 401(k)s have proved a “disaster,” as Black puts it, one that has enriched the financial sector but lashed the country’s retirement security to a volatile stock market-and left 75 percent of Americans nearing retirement age in 2010 with less than $30,000 in their accounts.

What’s left? Social Security. Though it was never meant to be a national retirement system all by itself, that’s increasingly what it has become. For Americans over age 65 in the bottom half of the income distribution, Social Security makes up at least 80 percent of retirement income.

In one of those columns in March of this year, Black used the “three legged stool” metaphor to bolster his argument to expand Social Security:

According to the Pew Research Center, the median household wealth for those aged 65+ is about $170,000. While that sounds like a significant amount of money, as Dean Baker of the Center for Economic and Policy Research pointed out, this is actually a trivial amount of wealth for people with little or no income other than Social Security benefits. Remember that this figure includes housing wealth. Even if it was a bunch of cash in a bank account, it wouldn’t actually provide for a significant supplement to other retirement income, but the reality is that many people have a house and not much else. [..]

Social Security was envisioned as one leg of a three-legged stool of retirement, along with employer pensions and private savings or insurance (though the metaphor itself was devised after its creation). The problem is that two of those legs have shrunk significantly. This is not a stool one can comfortably sit on. This is not a stool most people will be able to sit on at all. The system, as envisioned, is failing.

We can goad and cajole people into saving. We can provide incentives for people to save for their retirement, and penalize them for raiding those funds before they retire. We can subsidize employer contributions to retirement funds.

But we have been doing all of these things for decades, and they haven’t worked. The majority of people nearing retirement will not have sufficient funds to retire with anything resembling economic security and comfort.

Well our frustrated blogging buddy’s idea is at long last taking root. Two Democratic Senators, Tom Harkin of Iowa and Mark Begich of Alaska, have introduced legislation that not only would expand Social Security but strengthen it.

The Strengthening Social Security Act of 2013 would:

• Strengthen Benefits by Reforming the Social Security Benefit Formula: To improve benefits for current and future Social Security beneficiaries, the Act changes the method by which the Social Security Administration calculates Social Security benefits.  This change will boost benefits for all Social Security beneficiaries by approximately $70 per month, but is targeted to help those in the low and middle of the income distribution, for whom Social Security has become an ever greater share of their retirement income.

• Ensure that Cost of Living Adjustments Adequately Reflect the Living Expenses of Retirees: The Act changes the way the Social Security Administration calculates the Cost of Living Adjustments (COLA).  To ensure that benefits better reflect cost increases facing seniors, future COLAs will be based on the Consumer Price Index for the Elderly (CPI-E).  Making this change to Social Security is expected to result in higher COLAs, ensuring that seniors are able to better keep up with the rising costs of essential items, like health care.

• Improve the Long Term Financial Condition of the Trust Fund: Social Security is not in crisis, but does face a long-term deficit.  To help extend the life of the trust fund the Act phases out the current taxable cap of $113,700 so that payroll taxes apply fairly to every dollar of wages.

The legislation has the support of AFL-CIO, AFSCME, the Alliance for Retired Americans, the National Organization for Women (NOW), the National Education Association, Paralyzed Veterans of America, Strengthen Social Security Coalition, Social Security Works, the United Automobile Aerospace & Agricultural Implement Workers of America (UAW), United Steelworkers, MoveOn.org and others.

The Harkin/Begich bill has now been endorsed by Ohio’s Senator Sherrod Brown (D) who has also introduced legislation that would change the cost Of living formula for Social Security to better reflect seniors’ true expenses:

With the introduction of several proposals that would reduce Social Security benefits for seniors by changing the formula used to calculate annual cost-of-living adjustments (COLA), U.S. Sen. Sherrod Brown (D-OH) today joined the National Committee to Preserve Social Security and Medicare (NCPSSM) to announce the Consumer Price Index for Elderly Consumers Act.  The new legislation would change the COLA formula for Social Security to more accurately reflect the expenses of senior citizens. Because of the method by which inflation is calculated, seniors and other Social Security recipients did not receive a COLA in 2010 and 2011, even though the price of prescription drugs, food, energy, and other necessities continued to rise. [..]

Social Security COLAs are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).  The CPI-W was chosen as the measure of inflation because it was the only measure available at the time the automatic COLA was established in 1972.  The CPI-W measures changes in the prices of goods and services purchased by those who earn more than half their income from clerical or wage occupations.  However, the CPI-W formula only represents about 32 percent of the U.S. population and does not accurately represent the inflation experience of older Americans. According to the Congressional Research Service, between 1982 and 2009, the cost of living under the CPI-W rose at an average rate of 2.9 percent, while the cost of living for seniors-as measured by an experimental CPI-E-rose at a rate of 3.2 percent.

Brown’s legislation would formalize a Consumer Price Index for the Elderly (CPI-E). The CPI-E would take into account seniors’ specific consumption habits, including increased prescription drug and energy costs, and would be used to determine the COLA for Social Security benefits.

It is time for President Barack Obama and congressional Democrats start acting like progressives and back both the Harkin/Begich and Brown bill. The president and the Democratic leadership should remove Social Security as a bargaining chip from the faux debt/deficit austerity negotiations and start protecting some of our most vulnerable citizens.

You can support the Strengthen Social Security Act (S.567) by signing this petition

Thanks, Atrios.

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

November 7 is the 311th day of the year (312th in leap years) in the Gregorian calendar. There are 54 days remaining until the end of the year.

On this dayin 1940, Only four months after its completion, the Tacoma Narrows Bridge in Washington State suffers a spectacular collapse.

When it opened in 1940, the Tacoma Narrows Bridge was the third-longest suspension bridge in the world. Built to replace the ferry system that took commuters from Tacoma across the Tacoma Narrows to the Gig Harbor Peninsula, the bridge spanned 2,800 feet and took three years to build. To save cost, the principle engineer, Leon Moisseiff, designed the bridge with an unusually slender frame that measured 39 feet and accommodated just two vehicular lanes.

The Tacoma Narrows Bridge opened with great fanfare on July 1, 1940. Human traffic across the waters of the Tacoma Narrows increased dramatically, but many drivers were drawn to the toll bridge not by convenience but by an unusual characteristic of the structure. When moderate to high winds blew, as they invariably do in the Tacoma Narrows, the bridge roadway would sway from side to side and sometimes suffer excessive vertical undulations. Some drivers reported that vehicles ahead of them would disappear and reappear several times as they crossed the bridge. On a windy day, tourists treated the bridge toll as the fee paid to ride a roller-coaster ride, and the Tacoma Narrows Bridge earned the nickname “Galloping Gertie.

Cross posted from The Stars Hollow Gazette

“Yes, I believe it is in the nation’s best interest to put all the phone records into a lockbox that we could search.”

   –Keith B. Alexander, September 2013

The New York Times has revealed new details about how the National Security Agency is spying on targets ranging from the United Nations to foreign governments to global text messages. We are joined by New York Times reporter Scott Shane, who reports that the NSA has emerged “as an electronic omnivore of staggering capabilities, eavesdropping and hacking its way around the world to strip governments and other targets of their secrets, all the while enforcing the utmost secrecy about its own operations.” The Times article reveals how the NSA intercepted the talking points of U.N. Secretary-General Ban Ki-moon ahead of a meeting with President Obama in April and mounted a major eavesdropping effort focused on the United Nations Climate Change Conference in Bali in 2007. The Times also reveals the existence of an NSA database called Dishfire that “stores years of text messages from around the world, just in case.” Another NSA program called Tracfin “accumulates gigabytes of credit card purchases.”

As U.S. Weighs Spying Changes, Officials Say Data Sweeps Must Continue

by David E. Sanger, The New York Times

The Obama administration has told allies and lawmakers it is considering reining in a variety of National Security Agency practices overseas, including holding White House reviews of the world leaders the agency is monitoring, forging a new accord with Germany for a closer intelligence relationship and minimizing collection on some foreigners.

But for now, President Obama and his top advisers have concluded that there is no workable alternative to the bulk collection of huge quantities of “metadata,” including records of all telephone calls made inside the United States.

Instead, the administration has hinted it may hold that information for only three years instead of five while it seeks new technologies that would permit it to search the records of telephone and Internet companies, rather than collect the data in bulk in government computers. Gen. Keith B. Alexander, the director of the N.S.A., has told industry officials that developing the new technology would take at least three years.

NSA official cites ‘stop and frisk’ in effort to explain searches of phone records

by Ali Watkins, McClatchy Washington Bureau

The general counsel of the National Security Agency on Monday compared the agency’s telephone metadata collection program to the highly controversial “stop-and-frisk” practice used by law enforcement officers, saying the agency uses that same standard to choose which phone numbers to query in its database.

“It’s effectively the same standard as stop-and-frisk,” Rajesh De said in an attempt to explain the evidentiary use of “reasonable and articulable suspicion” to identify which phone numbers to target from the agency’s huge database of stored cellphone records.

De made the comment during a rare hearing of an obscure government body, the Privacy and Civil Liberties Oversight Board, which Congress created in 2004 to oversee the government’s expanded intelligence collection operations but which until Monday had never held a substantive hearing. [..]

The comparison was the latest in questionable analogies that intelligence officials have used in an effort to explain the agency’s metadata collection programs since former defense contractor Edward Snowden revealed their existence in June.

Intelligence officials, for example, have said repeatedly that the collection of hundreds of millions of phone records allows them to build a haystack in which to find a needle, apparently missing the irony that “finding a needle in a haystack” is an expression meant to convey that a task is all but impossible.

NSA’s Path to Totalitarianism

by Norman Pollack, Counterpunch

The New York Times, a recipient, along with the Guardian, of Snowden’s disclosures about the illegal activities of Obama and USG, is breaking out, as now, of its reticence about the nation’s profound disregard of constitutional principles AND its related policies of global hegemony at all costs-here Scott Shane’s lengthy article (3 Nov.), “No Morsel Too Miniscule for All-Consuming N.S.A.”  NSA to all intents and purposes appears as a “rogue” organization, extremism in the putative service of liberty, except that the designation is a way of distracting attention, and removing accountability, from its authorization and mission at the highest levels-call it, licensed roguery, official (with Obama’s eyes supposedly averted).  Or better, call it, stripped of all cosmetics, the unerring mark of a Police State, itself become identical  with Fortress America, the National-Security State.

Eavesdropping on foreign leaders speaks to an arrogance of power, in which the US claims for itself every right, unilaterally, to script both sides of the foreign dialogue as well as micromanage to its own advantage the rhythm and content of global events, from regional trade partnerships to the use of military force in shoring up alliance systems against a host of enemies, some terrorist groups to be sure, but, using that as pretext, mounting counterrevolution globally against alternative modes, notably, socialist, of modernization: autonomous national and/or radical aspirations seeking distance from US market penetration, the tarnished necklace of its worldwide military bases and CIA stations, and not least, the ideological saturation (assisted by IMF and World Bank applications of pressure) of market fundamentalism, the property right, unrestricted capital flows, and the honor of serving American industry with the lowest possible labor costs, as meanwhile we see the financialization of capitalism here and the gutting of the manufacturing base.

Eavesdropping, of course, is the polite term for control freak, which translates, in the realm of power politics, into societal desperation to employ any and all means for staying on top, cyber-strategies of disruption as well as information-gathering, campaigns of disinformation, CIA-JSOC paramilitary programs of regime change, and, upping the ante, as here, learning every move in advance of foreign leaders, the better-take no chances, take no prisoners-to orchestrate world politics in our favor.