February 04, 2005
Why Are Liberals Afraid of Social Investing?
Matt is expending brain power on how the government can invest social security funds in the stock market, yet avoid the evils of social investing. To me, this issue outlines the intellectual bankruptcy of liberals on the issue of jobs creation. Jobs require capital and the largest pot of capital the US government is going to control for the next few decades is social security. The obvious answer is to figure out, not how to put those investments on autopilot, but rather how to use them to enhance the US economy. The stronger the US economy, the more taxes paid into the social security system. Yet most liberals are desperately trying to figure out HOW NOT to use those funds in ways that help working families.
The reality is that we are facing a global economy where corporations have zero loyalty to investing in local communities. If those corporations want to send their capital overseas where they can invest in low-wage countries, there needs to be some pool of capital to keep revitalizing industry in the United States.
The irony here is that the models for social security privatization-- Singapore and Chile -- use their pension systems as a very direct instrument for industrial policy. As the US state department argues, "The privatized national pension system has encouraged domestic investment and contributed to an estimated total domestic savings rate of approximately 21% of GDP in 2003." In Singapore, private pension fund monies are even more directly controlled by government officials and has been integral to that country's rapid economic growth.
What's amazing is that progressive state and local pension fund directors are boldly leading campaigns for corporate reform and promoting economically-targeted investments, yet national liberal leaders are deathly afraid to even think about doing something similar at the federal level.
Where is the national progressive jobs agenda? Where is the plan to promote investments in our communities as investments flee overseas? If liberal leaders don't have an answer, they might as well never expect to regain the keys to the White House. Bush wants to hand trillions of dollars over to Wall Street speculators without conditions. Progressives should be arguing for an alternative vision of dedicating those funds to investments that create jobs and rebuild out communities-- and create the high-wage jobs of the future that will keep social security fully funded without benefit cuts.
Posted by Nathan at February 4, 2005 09:54 AM