An infantilized society

September 7, 2010

The economic troubles in Europe are leading to public unrest, as EU governments try to pare back their bloated public sectors, in some cases trimming wages and benefits, in others by delaying access to them. In France, plans to save the national pension system by raising the retirement age from 60 (!) to just 62 has lead to a massive strike of over one million people:

French strikers disrupted trains and planes, hospitals and mail delivery Tuesday amid massive street protests over plans to raise the retirement age. Across the English Channel, London subway workers unhappy with staff cuts walked off the job.

The protests look like the prelude to a season of strikes in Europe, from Spain to the Czech Republic, as heavily indebted governments cut costs and chip away at some cherished but costly benefits that underpin the European good life — a scaling-back process that has gained urgency with Greece’s euro110 billion ($140 billion) bailout.

In France, where people poured into the streets in 220 cities, setting off flares and beating drums, a banner in the southern port city of Marseille called for Europe-wide solidarity: “Let’s Refuse Austerity Plans!” The Interior Ministry said more than 1.1 million people demonstrated throughout France, while the CFDT union put the number at 2.5 million.

(…)

French protesters are angry about the government’s plan to do away with the near-sacred promise of retirement at 60, forcing people to work until 62 because they are living longer. The goal is to bring the money-draining pension system back into the black by 2018.

As debate on the subject opened in parliament, Labor Minister Eric Woerth said the plan was one “of courage and reason” and that it is the “duty of the state” to save the pension system. He has said the government won’t back down, no matter how big the protests.

Prime Minister Francois Fillon reminded the French that it could be worse: In nearly all European countries, the current debate is over raising the retirement age to 67 or 68, he said. Germany has decided to bump the retirement age from 65 to 67, for example, and the U.S. Social Security system is gradually raising the retirement age to 67.

That sense of perspective was missing from many of the French protests, where some slogans bordered on the hysterical. One sign in Paris showed a raised middle finger with the message: “Greetings from people who will die on the job.”

Nothing like Gallic hysterics, eh?

Of course, we shouldn’t be surprised at this: statist societies like France and much of the EU use ever-expanding government-provided benefits as bribes to buy social peace, making dependents out their citizens and, in effect, infantilizing them. It’s no wonder, then, that the public then throws a tantrum when the state is forced to cut back.

But before anyone indulges in some schadenfreude at French expense, bear in mind that President Obama and his progressive allies want to take us down this same statist, dependent, and infantilized social-democratic road. (And, to a lesser extent, big-government Republicans have been willing to accommodate them.) We’re already seeing that with the growth of public sector unions in the US and their outlandish benefits*.

While Europe seems to be in for a season of unrest, the problem isn’t yet so bad in the US and, importantly, many people agree that it is a problem in the first place. Hopefully we can make the necessary reforms before we have our own mass tantrums.

*(For the record, I’m a member of a quasi-public union, and apparently it’s one of the dumber ones; we’ve never received the over-the-top wages and benefits the other unions do. I tell ya, it ain’t fair…)

(Crossposted at Sister Toldjah)

Advertisements

A social security system that works

August 25, 2010

I’ve long advocated  privatizing Social Security, our nation’s public pensions system. The current set up, while supposedly a trust fund, is really just a piggy bank that lawmakers of both parties have raided time and again over the decades to pay for their grandiose programs while promising to pay it back later.  The fact is, the system is broke. It’s just a giant Ponzi scheme in which current workers are paying retirees in the expectation that future workers will pay the current workers when they themselves retire.

The hash that government has made of Social Security should be reason enough alone to take the money out of the politicians’ hands. But there are also positive reasons, too: rather than depending on the labor of others to pay for retirement at a rate determined by a distant bureaucrat, a worker builds up his own funds that he can use as he wishes, even leaving it to his children to augment their nest-eggs, and it treats citizens as responsible adults rather than infantilizing them.

We also have an empirical example of a private social security system that has worked, and worked well, for decades:

Unlike the United States and most European nations, Chile does not face a long-term Social Security crisis. This is because lawmakers shifted to a system of personal accounts almost 30 years ago. As a result, Chile’s economy is much stronger, the financial system is healthy, workers are better off, and taxpayers are protected. It also turns out that a system of personal accounts has a positive impact on the labor supply of older workers. Instead of getting lured into retirement by a punitive tax-and-transfer government system, they remain active to reap the rewards of a system that rewards them (rather than tax collectors) for continued work.

Seeing the problems of our own system, the even worse ones facing European public pension systems, and then contrasting them with the private Chilean system should make the choice to transition to a private Social Security system easy. But, when Bush tried even a moderate reform in 2005, the statist Democrats and their big donor groups fought it tooth and nail, and won.

Our system is only going to get worse as our population ages, requiring a huge tax burden on current and future workers to pay the benefits of those in the system or soon to enter it. A transition to a private pension system will be hard, but it will be even harder in the future. Unfortunately, with the (Social) Democrats in charge, we’ll have to wait until at least 2013 before any meaningful reforms can be made.


When you’ve lost the cab drivers…

June 28, 2010

Nile Gardiner, one of the Telegraph’s US-based correspondents, has often harped on President Obama for his poor handling of what had been excellent and close relations between the US and Great Britain. From the return of the Churchill bust to the dumping of Uighur terrorists in Bermuda (the security of which is Britain’s responsibility) to publicly leaning toward Argentina in the revived dispute over the Falkland Islands, it’s become clear that Obama doesn’t care about the “special relationship” between Britain and the US, and perhaps even holds that country in contempt. (Some Americans might argue that he feels that way about this country, too.)

The most recent major irritant has been the Obama Administration’s bashing of BP for the Gulf oil spill, which has gone far beyond what’s deserved to treating the company (a big Obama donor) into a whipping boy and extorting $20 billion from it for a slush fund trust fund. The pensions of millions of Britons (and, I might add, Americans) depend on dividends from BP shares, and they don’t like the prospect of the company’s finances, and thus their pensions, being crippled in the service of Obama’s political needs. While Gardiner knew that Obama’s popularity was dropping among the upper classes of the UK, he was shocked on a trip home to learn he’s losing even the man on the street – in this case, the cabbies:

In a series of meetings with leading opinion formers in the UK, I barely heard a good word said about the president’s handling of relations with Britain or for that matter his presidency in general. In contrast, when he first entered the White House 17 months ago, impressions of Barack Obama across the Atlantic were overwhelmingly positive.

But the disillusionment with Obama extends far beyond the political and media elites. I was particularly taken aback on this trip by the level of animosity towards Obama’s leadership expressed by some London black cab drivers, who have also turned against the US president, especially over his handling of the BP issue. In numerous trips across central London I asked cabbies their opinion of the Obama presidency and in particular his handling of BP. Without fail, the views expressed of the president were overwhelmingly negative, and there was a strong belief among many drivers that Obama is anti-British.

I mention London cab drivers, not only because they are the best taxi drivers in the world by a mile, but also due to the fact they usually take a keen interest in politics and international affairs, and are often a good barometer of British public opinion. If Obama has lost the sympathies of the average London black cab driver, I would argue he has lost the support of the British people too.

Gardiner goes on to make a good point: America and Great Britain are closely involved in some of the most serious issues facing the world today. From active combat in Afghanistan to the nuclear threat posed by Iran and the shadow war against jihadist Islam, to name but a few, the two governments are cooperating closely. But Obama’s serial disrespect of Britain and, now, his overdone attacks on a major pillar of the UK economy are creating a groundswell against him that could threaten that alliance.

No one is excusing BP from its liability in this disaster; even BP has said time and again it accepts responsibility. But Obama needs to stop using BP to distract from his own ineptitude in the Gulf and start doing what’s needed to clean things up, before permanent damage is done to one of our closest alliances.


Not just no, but “Hell no!”

April 20, 2010

Barack Obama was in Los Angeles yesterday to foul up traffic and attend a fundraiser for Senator Barbara Boxer (D-Moron). While praising Senator Ma’am, the President said the nation should take inspiration from California and try to be like the (once) Golden State. Reason’s Matt Welch does a spit-take and gives this reply:

While I appreciate any shout-out to my home state, what California’s Democratic elite are “about” is enabling their union backers to drive a once-thriving economy into a bottomless pit of unemployment, perennially busted budgets, and unfunded pension contributions that transcend most human comprehension. This is not a spirit Washington should try to “recapture,” unless the goal is 12.6 percent unemployment (with a bullet!), a credit rating hurtling toward junk-bond status, and a perpetual round of bailouts from a faraway government entity.

And here’s the kicker–Obama in his speech said that “one of the main reasons our economy faltered was because some on Wall Street made irresponsible bets, with no accountability.” The exact same language could be used, with 100 percent accuracy, to describe public officials all over California–including Los Angeles Mayor Antonio Villaraigosa, who just today is unveiling his latest too-little, too-late package of reforms. All of these labor-backed bureaucrats bet irresponsibly that they could more than double pension promises to state employees over the past decade, because the “accountability” moment was deferred to when those payments came due. Well, they’re only beginning to come due now, and it’s a damnable mess

Read the rest for the gory details.

I realize he has to say nice things at a fundraiser, but the rest of the nation shouldn’t emulate California, they should run screaming from us*.

*(And New York and New Jersey, too.)


Government unions vs. the taxpayers

April 3, 2010

Larry Kudlow talks to Dan Mitchell about the startling disparity between compensation in the public vs. the private sectors: