Here’s where we come back to Klein’s thesis. In her book she quotes Milton Friedman, the capo di capi of the Chicago School of Economics: “Only a crisis produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.”
Within certain circles of power, the Social Security “crisis” has been lying around for a very long time. In his 1936 campaign against FDR, Alf Landon called the new program a “fraud on the workingman,” and continued:
“Every month they bring 6 per cent of their wages…so that he may act as trustee and invest their savings for their old age….the day comes…What do they find? Roll after roll of neatly executed IOU’s.”
Those damned IOUs again.
FDR won that election. It was the Great Depression, the poorhouses were full, and for some the threat of starvation hit all too close to home.
During the war and after, booming profits kept the rich folks busy for awhile, but by the end of the 50’s things had started to slow down and Social Security crisis was back on the agenda.
St. Reagan, in his nominating speech at the 1964 Republican convention, suggested privatization.
He lost. Too many folks still remembered the Depression and the poorhouses. Social Security had put those institutions out of business, but in their day, the overwhelming majority of their residents were over sixty.
Today Social Security is a bulwark against penury for the elderly. It provides 50% or more of retirement support for 2/3 of beneficiaries, and 100% of support for 1/3.
In 1978, a young Congressional candidate picked up the theme of crisis. Stumping at the Midland Texas Country Club, George W. Bush said:
“[Social Security] will be bust in 10 years unless there are some changes…The ideal solution would be…[for people] to invest the money the way they feel.”
Like the WMDs, the 1988 Social Security bust never manifested. You’d think Bush would be embarrassed, but 20 years after the crisis-that-wasn’t, he’s still banging the privatization gong.
There’s plenty more scary talk where that came from, a steady stream of policy papers and opinion pieces, dutifully parroted by the media. The think tanks that produce them are funded, not by any grass-roots demanding Social Security reform, but by a handful of big private fortunes, some well-known: Mellon-Scaife
Other funders are less famous, but their fortunes are equally large. The Koch brothers, inheritors of one of the world’s largest private oil fortunes, fund what’s probably the most important source of privatization propaganda: the Cato Institute.
In 1983, in the wake of another failed attempt to gather public support for privatization, Cato published an influential paper titled “Achieving a Leninist Strategy.”
The authors start by acknowledging that Social Security is a popular program, so head-on approaches to dismantling it are
unlikely to be successful. Instead, they recommend the “Leninist Strategy” of the title. Strange to find libertarian free-marketeers so enthusiastic about a reviled communist, but politics does make strange bedfellows.
Lenin was a political strategist known for super-pragmatism, a proponent of stealth tactics, alliances of convenience, and sleeper cells. He advised a secretive vanguard to help create the conditions for revolution, while lying in wait for the “revolutionary moment” when power could by seized by virtue of the same vanguard’s superior organization and discipline.
This is exactly what the Cato authors recommend in the way of a long-term strategy to take Social Security private. To help create revolutionary conditions, they suggest:
1) Mobilizing a coalition of folks who’d benefit from privatization (banks, investment houses, and other financial institutions).
2) Continuing public “education” aimed at discrediting Social Security and talking up privatization.
3) Creation and promotion of financial savings alternatives (e.g. 401Ks, IRAs) to get people accustomed to using them.
4) Splitting potential coalition supporters of Social Security, such as current and future recipients: “…the strategy must be to propose moving to a private…system in such a way as “to…neutralize…the coalition that supports the existing system.” Thus, older folks would be told their benefits wouldn’t be cut, making them less likely to mobilize to help protect benefits for the young.
All this has happened in the years since.
At the end of the paper, the authors say: “The next Social Security crisis may be further away than many people believe…it could be many years before the conditions are such that a radical reform of Social Security is possible. But then, as Lenin well knew, to be a successful revolutionary, one must also be patient and consistently plan for real reform.”