Antisocial Security

This column was written by Jon Margolis.

Reporters could ask questions, but we had just gotten copies of the budget, which is immense, so those questions were minimally informed. But I did manage to notice that the Reaganites were proposing a substantial cut in spending for housing. One of the briefers was a guy I'd gotten friendly with during the 1980 campaign, so when the session ended I went up and asked him whether this cutback wouldn't make it harder for lower-income people to find affordable shelter.

"You don't understand," he said. "With government getting out of the way, the market will make sure that plenty of housing is built."

He was right. In the last 24 years, Americans have built more houses than ever, and a higher percentage of people are homeowners. With government doing less and the market doing more, real estate has been a boon for agents, contractors, speculators, and just plain folks who buy and sell their homes.

Except for folks who don't have much money, that is. With government doing less and the market doing more, a smaller percentage of housing is within reach of lower-income people. As a result, they pay a greater percentage of their income for shelter.

But what else is new? Deregulation, privatization, and marketization redistribute benefits upward. So does tax reduction, and not just because the tax cuts disproportionately benefit the affluent; it's also that the depleted public sector has been forced to cut back on the services it provides, and on which the less affluent disproportionately depend.

None of which proves that lower taxes, deregulation, and privatization are always a bad idea. Economic equity is hardly the only value in life, and in some cases a little more inequity is a cheap price to pay for innovation and efficiency.

Still, by now you would think someone would have noticed the pattern, and asked the obvious question: If this redistribution upward is always the result, is it not the intention?

No, that contention cannot be proven. Only a leftist conspiracy theorist would assert it as incontrovertible truth. But only a doofus could dismiss it out of hand. If greater inequality is not the whole point, why is it the common outcome?

But no one has brought this up, not even in regard to President Bush's Social Security privatization proposal, which would obviously shift income upward. Forget for a moment the boon for Wall Street; that's peripheral. The plan itself would reward the shrewder, or at least the luckier, investor. But luck, in the words of the great American philosopher Branch Rickey, is the residue of design, and those who are college-educated, affluent, financially literate or able to buy expert advice would be better positioned to fashion that design. It's the high-school dropouts who will pick the wrong stocks, or stick with the old program even as it runs short.

For some reason, this connection is overlooked. The Democrats and their allies in the liberal chattering salons are angry enough about Bush's plan. They are even, uncharacteristically, united. But they don't get the point.

Maybe it's the myopia of the Washington policy-wonk world. Having once lived there, I understand how easy it is to become enmeshed in the effluvia. Indeed, it may be necessary. When Bush and the boys at Cato proclaimed that Social Security is going broke, someone had to refute the falsehood. And somebody had to demonstrate that private accounts would do nothing to ease the system's potential predicament, proving that the inspiration behind them is not fiscal but ideological.

But what is the ideology? The reason the policy wonks had to chop down all those trees is that they are part of a forest. Somebody ought to put down his ax long enough to walk out into the meadow and consider the grove in its entirety. This proposal did not come into the world naked and alone. Seen in context, it is the latest in a long line of policies that enrich the rich regardless of the impact on everybody else.

Here we pause for the predicable -- nay, the unavoidable -- shrieks of "class warfare." But I merely observe what is going on. I don't necessarily oppose it. Greater inequality may be a good idea. There is an economic argument on its behalf, and it could be closer to the natural order of things. Remember, Thomas Jefferson called equality a self-evident truth, perhaps suspecting that had he stated it as a proposition subject to empirical examination, it wouldn't pass. We're not equally cute; who says we're of equal worth? Equality is not a scientific fact. It's a social goal. Or it isn't. For most of the guys running the country today, it isn't.

This is ideology, not greed. Republicans are neither more avaricious nor more dishonorable than their opponents. Their desire to dismantle Social Security is motivated by sincere belief, one founded on an aggressive hostility to equality.

Not, I hasten to add, racial equality, to which the conservatives are as committed as anyone. But their distaste seems also to transcend a simple aversion to economic equity. Consider their revulsion -- bordering on religious fervor -- for the estate tax, which was created precisely to complicate, if it could not prevent, the perpetuation of a dominant social-financial elite. Today's conservatives think a dominant social-financial elite is just fine.

One would have to be an unreconstructed liberal, which I am not, to oppose all deregulation and privatization. I love telephone and airline deregulation. Thanks to the cheap long-distance rates and newfangled gadgetry, I can earn my keep while living in the Vermont woods. Thanks to competition, I bought two round-trip tickets between Burlington and Paris for less than $800. I couldn't have done that back when routes and fares were overseen by the government.

But I have neighbors up here who make two or three long-distance calls a year, and take that many plane trips a life. They need neither modems nor cell phones. They need to make local calls, which are more expensive than in pre-deregulation days. They will never gather enough frequent-flier models for a free trip to anywhere. Neither, anymore, will the thousands of middle-income workers who lost good jobs with the airlines. Probably, deregulation did more good than harm. But the good accrued mostly to those relatively well-off, the harm to those less so.

Over the last 20 years, perhaps nowhere has economic inequity grown faster than in the retirement system. The replacement of defined-benefit pensions by 401(k)s might be the largest transfer of wealth from workers to employers ever. Without traditional pensions, the non-wealthy are ever more dependant on Social Security, the only leg of the retirement "stool" that has kept up with the needs of retirees.

So of course the same political force that diminished pension plans wants to enfeeble Social Security. As now constituted, Social Security redistributes income downward. In fact, excluding means-tested programs designed to help the poor, Social Security is one of only two government institutions open to almost everyone while still disproportionately benefiting the non-wealthy.

The other one is the armed forces. It's probably safe for now.

Jon Margolis is a former political reporter for the "Chicago Tribune."

By Jon Margolis
Reprinted with permission from The American Prospect, 5 Broad Street, Boston, MA 02109. All rights reserved