Selected Newsweek Columns

I found two more articles in the February 14th issue of NEWSWEEK magazine than the two on Social Security that I have not cared to find the online versions of:

- "Harry Reid's 'Roulette'"
- "Hail to the Flip-Flopper"

"Harry Reid's 'Roulette'"

Last week Howard Dean, almost certainly the next Democratic Party chairman, said: "I hate Republicans and everything they stand for." Either Dean means what he says, in which case he is as unhinged as the rest of the party's Michael Moore caucus, or he does not, in which case he is a blowhard like, well, Moore. Yet for several weeks Dean has been one of the four most conspicuous Democrats on the national stage.

Two of the others have been Ted Kennedy, the shrill essence of East Coast liberalism, and California Sen. Barbara Boxer, who comes from Marin County, a habitat for West Coast liberals who find the city across the Golden Gate Bridge too tepidly "progressive." The fourth, and most important, is Senate Minority Leader Harry Reid, who seems determined to earn the description Teddy Roosevelt applied to President John Tyler—"a politician of monumental littleness."

In December, Reid, speaking about President Bush's proposal for Social Security reform—a proposal Bush had not yet announced—said: "[Republicans] are trying to destroy Social Security by giving this money to the fat cats on Wall Street." Good grief. "Destroy"? The "fat cats" will not get fatter from the estimated 0.3 percent cost of handling the funds.

Reid's hyperbole suggests that Deanspeak is contagious. In Reid's televised "response" to the president's State of the Union address—written before the address—he disparaged the idea of voluntary personal retirement accounts funded by portions of individuals' Social Security taxes as "Social Security roulette." This is the crux of the Democrats' argument against Bush's plan: Equities markets are terribly risky—indeed, are as irrational and risky as roulette.

Roulette is a game without any element of skill. By comparing the investment of some Social Security funds in stocks and bonds to gambling on roulette, Reid is saying that the risks and rewards of America's capital markets, which are the foundation of the nation's economic rationality and prosperity, are as random as the caroms of the ball in a roulette wheel.

It is especially so for a reason Bush delivered with a rhetorical rapier thrust in his State of the Union address. After saying that the 4 percentage points of Social Security taxes could be invested only in a few broadly diversified stock and bond funds, Bush pointedly said to the assembled representatives and senators: "Personal retirement accounts should be familiar to federal employees, because you already have something similar, called the Thrift Savings Plan, which lets workers deposit a portion of their paychecks into any of five different broadly based investment funds." Touché.

Begun in 1987, the Thrift Savings Plan, which as of December 2004 had assets of $152 billion, is a retirement-savings plan open to all civilian federal employees, including senators, and all members of the uniformed services.

They can invest as much as 14 percent of their salaries in one of five retirement funds. Consider the rate of return of C Fund, one of the five. It is a common-stock fund, so it should represent the risks that Reid thinks should terrify Americans:

In only four of 17 years has the rate of return been negative. But in 11 years the rate has been greater than 10 percent, in eight years it has been greater than 20 percent, in four years it has been greater than 30 percent. The compound annual rate of return for the last 10 years has been 12 percent, and the return over the 17 years has been 12.1 percent.

Reid participates in the plan, but opposes allowing all Americans the comparable opportunity that Bush is proposing. But if the numbers just cited are the result of roulette, the legislators should let the rest of us into the game in which they are prospering.

>> Full Article [MSNBC:NEWSWEEK]

The end of the article assumes that the funds won't have an inevitable period of decline and loss greater than a year or two in a row and that it'll always keep growing and growing. I don't know how sound such an assumption is on something that may not be as predictable as it seems.

But designating something perhaps falsely like the Democrats are doing with "Social Security Roulette" is effective propoganda to the masses. Just like calling the estate tax the "Death tax", amd the big goverment "Patriot" act that few legislators in Washington supposedly read before passing shortly after 9/11.

"Hail to the Flip-Flopper"

Feb. 14 issue - Last week's elections were a great day for Iraq, for the Middle East, for America and for one American in particular. George W. Bush rightly deserves credit for these elections and what they symbolize. Many have argued that the events vindicate Bush's steadfast, unwavering, even stubborn style of leadership. But do they? The Iraqi elections occurred because George Bush changed course, junked a previous plan and adapted to realities on the ground. In fact, much of the progress in Iraq over the past eight months can be traced to Bush's willingness to reverse himself. The enduring problems in Iraq, on the other hand, developed and grew because his administration doggedly refused to recognize errors and make changes. This is more than a point of historical interest. Going forward in Iraq—and beyond—we will need more of Bush's suppleness and less of the much-lauded steadfastness.

The American plan was not to hold elections this January. Paul Bremer had set out a seven-step process in which the United States kept tight control of Iraq. Elections were to be held only after an elaborate series of caucuses to choose an assembly and draft a constitution, followed by a national referendum. Washington stood firm on this plan—"We will stay the course," Bush said repeatedly in the face of criticism—until it became clear that things were unraveling. A man to whom the U.S. had paid no attention, Grand Ayatollah Ali Sistani, the most powerful voice in the Shia community, was dead set against it.

Recognizing reality, Washington in March 2004 hastily asked the United Nations to go in and broker a compromise. The administration then accepted an entirely new plan agreed to by Sistani and U.N. envoy Lakhdar Brahimi. "[Brahimi] was the quarterback," Bush admitted, enraging many conservatives in Washington. In fact, these reversals were extremely wise and rescued America's Iraq policy.
...

President Bush has often said that he emulates Abraham Lincoln. In a recent letter to a Civil War historian, he wrote, "Lincoln set the goal and stayed the course. I will do the same." But what is remarkable about Lincoln is how willing he was to admit that his choices weren't working, and to insist on changes. He ran through seven generals in three years (George McClellan twice, the second time after one month) until he found the man who could do the job—Ulysses S. Grant. He was often pilloried for his constant shifts of personnel and policy.

Lincoln stayed the course on one issue: preserving the Union. Bush has been similarly steadfast in his embrace of an important and noble goal: democracy in Iraq. But he has also been steadfastly opposed to recognizing that several of his policies have made the achievement of this goal much more difficult. When observers pointed to problems that could have been fixed, he and his supporters accused them of defeatism and weakness.

The greatest president felt differently. When Grant captured Vicksburg, Lincoln—who had believed that Grant was making a tactical blunder—wrote him at once, saying, "I now wish to make the personal acknowledgment that you were right, and I was wrong." In fact, Lincoln's intellectual flexibility helped bring about his greatest legacy. In his first year in office, Lincoln had stubbornly rejected the idea of abolishing slavery. But by 1862 he recognized that the best path to preserving the Union was by freeing the slaves.

So, he wavered, reversed his position and changed course. Thank goodness.

>> Full Article [MSNBC:NEWSWEEK]