Social Insecurity Edition

Everyone, center yourself in your Temple of Positivity...Go on and find it. I'll wait. You'll need it, 'cause the Fed just committed $85 billion of your tax dollars to bailing out AIG.

Yup, that's billion with a "b." I like how the "billions" just rack up as if every billion was just pocket change-- "How much was it? Oh, $40 or $85 billion...." Sunday, they were looking for a $40 billion bridge loan. Monday they were trying to get JP Morgan and Goldman Sachs (Goldman? Really? Don't they have enough to worry about on their own??) to cobble together $75 billion to help tide them over. Tonight, after two tense days, with FedHead Bernanke (there he is, Mary Ann!) and Cashbox Secretary Paulson looking grim, they get $85 billion. Extra, you know, just in case they need a little pizza money. Oh, I see what the problem was-- they weren't asking for enough money!

Earlier in the day, McCain came out strong about not using taxpayer dollars to bail out AIG. Now let me just say here (and I wrote this yesterday morning, before the bailout news), I'm not exactly in favor of taxpayer money being used to prop up organizations mired in despair-laden pits of their own making (as is probably clear from my last rant). But it's easy to say, "Oh, we can't have taxpayer dollars going to a bailout!" when you're not the one making the decision in the moment.

AIG is the 18th largest corporation in the world, with holdings that include not just financial services, asset management and life insurance, but telecommunications and market-making. I looked them up on Wikipedia (And only learned this week that AIG stand for "American International Group." Sexy, no?) . They are the world's largest leasers of aircraft, and the largest underwriters of commercial and industrial insurance in America and having them head into bankruptcy does not affect just the US and Wall Street, it moves into world markets. So I think it's a little too pat of McCain to just come out with the easy statement when examining a situation this complicated. I don't claim to understand what's going on, but I think I understand enough to know there are no simplistic answers.

The little elves in the "Ad-making" workshop must work overtime on days like these. Obama's campaign already has an ad out attacking McCain's statement about the "fundamentals of the economy" being sound.
Meantime, McCain clarifies what he meant he thought he was about to try to say: "Well it's obviously true that the workers of America are the fundamentals of our economy, and our strength and our future,'' he said. "And I believe in the American worker, and someone who disagrees with that – it's fine. We are in crisis. We all know that. The excess, the greed and the corruption of Wall Street have caused us to have a situation which is going to affect every American. We are in a total crisis.''

The New York Times financial columnists have some interesting things to say about how the crisis actually affects the average Joe, so you need to be worried about your 401k or your mutual fund investments? "It also might be time to review your risk tolerance: if you're tempted to move your money around on a difficult day, it might be time to rethink your stock allocation (in other words, you might want to lower it)."

However, just this morning, a major money market fund is warning that depositors could lose money. "The fund said that because the value of some investments had fallen, customers now have only 97 cents for each dollar they had invested.This is only the second time in history that a money market fund has "broken the buck" — that is, reported a share's value was less than a dollar"

Betcha didn't know McCain invented the BlackBerry-- and that was BEFORE he learned to use email....Says the NY Times, in a droll, one-sentence aside: "The original BlackBerrys were made by a Canadian company, Research in Motion."

And on the subject of one of my bugaboos about the "McCain: Hero for All Time" stories, Mary Mitchell points out that if we're being asked to evaluate candidate McCain on his character based on his war-hero years, then we should also be told the the story of the shabby way he treated first-wife Carol. Maybe that's what attracted him to Cindy. Ariel Levy's profile of Cindy McCain in the New Yorker looks at her family matters. "Cindy McCain regularly calls herself an only child. In fact, she has two half sisters: Kathleen Portalski and Dixie Burd, Marguerite's daughter from a previous marriage. 'I feel bad about having a father that wasn't there, and then having my face rubbed in this—having her stand up and say she's an only child—makes it even worse,' Kathleen Portalski told me." Kathleen Portalski visited her father almost every day in the months before his death. When he died, Cindy McCain inherited the Hensley empire; Kathleen Portalski and her family received ten thousand dollars. Stephanie Portalski found that a credit card her grandfather had given her had been cut off days after his death.

PALINDROMES

Oh, ya gotta lot the Brits. Wordplay is just in their blood. Andrew Sullivan, a conservative blogger (actually he's a libertarian conservative, who thinks the Republican Party has lost the true meaning of "conservatism." Ya think?) at The Atlantic has turned out to be no Sarah Palin fan, and is now cataloguing her Palindromes(For the Bridge to Nowhere and against the bridge , for instance) with his series "The Odd Lies of Sarah Palin." See, "palin" in Greek means "reversal," Thus the word "palindrome," a word or phrase that is the same forward as it is reversed. This is what you get if you give people a Classical Education. I know, I know, people have been sending me the piece floating through the Ethernet about how Sarah Palin is a distraction from the real issues, how we shouldn't pay attention to her. How we shouldn't fight her, but fight McCain. And I can easily go with the first and third points. But I can't agree that we shouldn't pay attention to her. She is the symbol of how ignorant the Republicans expect the voting public to be, and she is the warning as to how dangerous a John McCain presidency would be and what kind of man this "War Hero" has become. Says Eugene Robinson: "We're beginning to discern an ambitious, opportunistic politician who makes no bones about rewarding friends and punishing those who stand in her way -- and who believes that truth is nothing more, and nothing less, than what she says it is."

In the Well-Worth-a-Read Dept.: Even the most forgiving conservatives are turning against McCain. Richard Cohen, conservative columnist of the Washington Post writes: "The John McCain of old is unrecognizable. He has become the sort of politician he once despised...His opportunistic and irresponsible choice of Sarah Palin as his political heir -- the person in whose hands he would leave the country -- is a form of personal treason, a betrayal of all he once stood for. Palin, no matter what her other attributes, is shockingly unprepared to become president. McCain knows that." Read it--seriously, it's a good piece.

Anyway, on to our Issue of the Day. Given the tanking markets, I thought it might be fun to visit Social Security policy-- and consider the wisdom of privatizing Social Security-- you know, cause we workers have been missing out on putting that money into the stock market and earning those high rates of return.

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Social Security

A recap for those who don't remember: debate has raged over how to fund Social Security because if it continues at current rates, "starting in 2017, program expenses begin to exceed revenues." President Bush has pushed during his second term for a plan in which "up to four percent of taxable wages, up to a maximum of $1000, could be diverted from FICA and voluntarily placed by workers into private accounts for investment.... These personal accounts could be invested in various managed investment funds similar to the government employees' Thrift Savings Plan, in which the investor can choose between Treasury Bills, Corporate bonds and a stock market fund."

• Barack Obama - His website indicates that he "will work with members of Congress from both parties to strengthen Social Security and prevent privatization while protecting middle class families from tax increases or benefit cuts. As part of a bipartisan plan that would be phased in over many years, he would ask those making over $250,000 to contribute a bit more to Social Security to keep it sound." He has opposed raising the retirement age, privatization, or cutting benefits.
  • opposed President Bush's privatization scheme because it would have undermined -- not strengthened - Social Security. "We should not add greater risk or debt to the system. Otherwise, workers who contribute to the Social Security System may face the prospect of inadequate benefits when they retire or if they become disabled if their investments go sour. Workers have lived up to their end of the bargain. Surely, the federal government can do the same."
  • "Social Security is one of the most important government programs ever created; it provides a vital safety net to millions of seniors and Americans with disabilities...It is a great reflection of our values and commitments, and I want to make sure it is solvent and viable for the American people, now and in the future."
  • "The focus of reform options should be on protecting the basic integrity and fairness of Social Security.... We can close the gap with an equitable mix of benefit and tax changes similar to those recommended by the bipartisan Greenspan Commission in 1983."
    
• John McCain - Has indicated resistance to raising taxes, but otherwise is willing to work with a bi-partisan commission to address the program's solvency issues. He has indicated that current benefit promises "cannot be kept," indicating he prefers to reduce benefits at some future date, rather than raising taxes. He supports private accounts as a supplement to Social Security.
• In addition, McCain' position has been unclear and inconsistent on Social Security privatization. In March, he campaigned heartily in support of Bush's plan to privatize Social Security. But here he is in June while at a town hall in Nashua: "I am not for quote 'privatization of Social Security.' I never have been, never will be. That is a great buzzword for an attack," McCain shot back.

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Speaking of electoral votes ('cause you know you were thinking about them...) ever wonder who the electors are and how this electoral college thing works? In case you've blocked it out after the 2000 and 2004 elections, here's an explanation. Basically each state gets the number of electors equivalent to the number of people you have in congress, so the number of representatives in the house, plus two for the number of Senators. The elector selection process varies from state to state, but here's the deal in California, The Democratic Party in CA submits a list of 55 possible electors as does the Republican Party. If Barack Obama wins, the Democratic list of electors gets to go to Electoral College, and if McCain wins (hah!) it;s the Republican list of 55 that goes. Mostly of course, the role is ceremonial. How to become an elector.

A reminder that although they raised $66 million last month (!!), Obama's campaign says their goal is to have 50,000 new donors by Friday at midnight. As I see it, it's about the cash of course, but also a sign to the campaign that there are more people out there than are counted in polls.

P.S. As you might be able to tell, I've been spending some time trying to dull the pain of economic disaster on a humor website called Pundit Kitchen, which is where most of the photos come from.