Morning Reading

Good morning. A few things I've seen so far: A roadmap for killing Social Security, what Citigroup knows that you don't, the bee vs the car, and today's funny-but-oh-so-true video.

Federal jobs look too good not to have a big price (Bloomberg)

The new relative appeal of a government job sends a message that private-sector work, especially self-employment or a job at a start-up, may not be worthwhile. Recent wipeouts of big businesses and the recessionary struggles of smaller ones only reinforce that message. So do politicians' occasional disparagement of "risk."

A roadmap for killing Social Security (LA Times)

Like a zombie tromping through a Hollywood gorefest, the idea of privatizing Social Security still walks among us.

The economic equivalent of war (Forbes)

Stop sniping at Hank Paulson. The former Treasury Secretary saved the day by overcoming his predilection for free market capitalism and he didn't do it to save Goldman Sachs, his and my alma mater. His pragmatic boldness helped save the capitalist system from a possible total collapse.

What Citigroup knows that you don't (Marketwatch) More on the Citi "financial collapse derivative" I wrote about last week:

Questions of the day: Would you buy a round-trip ticket on an airplane prone to crashes? How about a car with a history of serious brake problems? Interested in a TV that works great, except for the picture?

If you answered yes to any of those, do I have an investment opportunity for you.

Bee vs Car: Who gets more miles per gallon? (NPR)

"We are playing with the numbers a little bit in terms of the scaling factors," he said. "But that does not negate the fact that honeybees are super, super efficient, far more efficient than any kind of internal combustion engine that human engineers have ever devised. So yes, we're cheating a little bit, but if you want to think in terms of miles per gallon, no denying it: We [he means the bee] got almost 5 million miles per gallon. Pretty darn impressive."

Today's funny but oh so true video (YouTube) A new service -- Polluter Harmony -- matches lobbyists and legislators looking for love:

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I used to support privatizing Social Security, but with the extreme corruption of congress and the big money interests who buy their influence, there is no way to come up with a good private replacement. I would be a lot less angry that my Social Security retirement was lost by the well meaning but misguided, than for my private retirement to be lost by some influence selling congressmen selling a way for corrupt influence buyers to take it from me.

Some day if congress can be cleaned up I would give an ear to privatization plans, but I doubt that congress can ever be cleaned up before the second coming of Christ.

Both of your scenarios have one key figure - congress. Why not remove them from the equation? (I know, because they would have to remove themselves, and that's not going to happen anytime soon.)

Let me ask this one question outside the direct glare of your assumptions.
Who do you trust more?
*Your* congressman or Goldman Sachs?

There are bad seeds in Congress, and it's rightful to say that the percentage of bad seeds in that bag is pretty relatively big, but Congress is still more accountable than Goldman (or other "dog eat dog" bankers) are.

If your congressman steals something, (s)he will get nailed for it. (Conspiracy theories and the relatively rare successful coverup aside.)
Banks, as private companies, never report their corruption levels, let alone even recognize that "every man for himself" is totally anathema to the whole point of "Social Security." I say that just because you can't see private industry's level of corruption and you can see the public equivalent does NOT make private industry corruption free.

What does Goldman Sachs have to do with removing Congress from the equation?

With all the corruption of congress, if congress did do a privatization of Social Security it would actually be a scheme designed by Goldman Sachs for the good of Goldman Sachs, it's bonus'ed executive management, it's shareholders, and the congressmen that were bought off. After these players got their piece of the pie, we the retirement savers would receive the trickle down of whatever good remained if any.

Because Goldman Sachs would be the person picking it up, the 'private' in 'privatization'.

The entire concept behind 'removing Congress from the equation' is to let business handle it instead. Thus when you remove Congress from control, you instead put Golden Sachs and other various big financial companies in their place.

What? Did you think that YOU would be the one running the thing?

So yes you can't trust Congress with it. You know, I know, We know. The question is, do you really trust Goldman Sachs more? If not, realize that 'privatizing' gives control fully to them and the other financial corporations.

Which makes the original post wrong since you don't need a good congress to privatize (you need one to keep it in government hands). You need good BUSINESS to privatize.

Personally, I could've sworn some of the big problems we had involved the way congress was being run BY Big Business and lobbying. As such it seems silly to eliminate the middle man and give full power to the ones causing the problems.

I never said I wanted social security privatized. I want social security phased out. Let me invest the 12.4% of my income how I see fit for my own retirement.

Social Security will someday be road-kill. It will be run over by hyperinflation.
Ronald Reagan - 1964 - A Time For Choosing:<p>

<i>Yet anytime you and I question the schemes of the do-gooders, we are denounced as being against their humanitarian goals. They say we are always "against" things, never "for" anything. Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn't so. We are for a provision that destitution should not follow unemployment by reason of old age, and to that end we have accepted Social Security as a step toward meeting the problem.</i><p>

<i>But we are against those entrusted with this program when they practice deception regarding its fiscal shortcomings, when they charge that any criticism of the program means that we want to end payments to those who depend on them for livelihood. They have called it insurance to us in a hundred million pieces of literature. But then they appeared before the Supreme Court and they testified that it was a welfare program. They only use the term "insurance" to sell it to the people. And they said Social Security dues are a tax for the general use of the government, and the government has used that tax. There is no fund, because Robert Byers, the actuarial head, appeared before a congressional committee and admitted that Social Security as of this moment is $298 billion in the hole. But he said there should be no cause for worry because as long as they have the power to tax, they could always take away from the people whatever they needed to bail them out of trouble! And they are doing just that.</i><p>

<i>A young man, 21 years of age, working at an average salary...his Social Security contribution would, in the open market, buy him an insurance policy that would guarantee $220 a month at age 65. The government promises $127. He could live it up until he is 31 and then take out a policy that would pay more than Social Security. Now, are we so lacking in business sense that we can't put this program on a sound basis so that people who do require those payments will find that they can get them when they are due...that the cupboard isn't bare? Barry Goldwater thinks we can.</i><p>

<i>At the same time, can't we introduce voluntary features that would permit a citizen who can do better on his own to be excused upon presentation of evidence that he had made provisions for the non-earning years? Should we allow a widow with children to work, and not lose the benefits supposedly paid for by her deceased husband? Shouldn't you and I be allowed to declare who our beneficiaries will be under these programs, which we cannot do? I think we are for telling our senior citizens that no one in this country should be denied medical care because of a lack of funds. But I think we are against forcing all citizens, regardless of need, into a compulsory government program, especially when we have such examples, as announced last week, when France admitted that their Medicare program was now bankrupt. They've come to the end of the road.</i><p>

<i>In addition, was Barry Goldwater so irresponsible when he suggested that our government <b>give up its program of deliberate planned inflation so that when you do get your Social Security pension, a dollar will buy a dollar's worth, and not 45 cents' worth?</b></i>

It would be quicker and cheaper to just set Social Security on fire than to privatize it. Especially given the 8-10 year spiral the market is sliding into. (I call it a spiral because each susequent recovery is noticeably weaker versus than accompanying decline.

Truthfully, I think you have to push the age where you can collect social security back. Given a growing population, that's living longer on average the current system isn't sustainible. When they first came up with the idea in the 30s, it was something like every 1 in 7-10 collected social security now it's every 1 in 3.

There's more too it though, you need greater worker protections for older employees who are likely to be downsized due to health care costs.

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