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Tuesday, May 03, 2005

Is Rove That Deviously Genius?

Julian Sanchez has a great piece up at Reason Online discussing the paradox that President Bush has created for the left side of the aisle.
While mystifying from a policy perspective, there is sound political logic behind the liberal horror at progressive indexing. In part, as John Tierney argued in his New York Times column this weekend, it robs those who oppose Bush's Social Security reform proposals of a potent rhetorical weapon: The image of sad-eyed septuagenarians scrounging Alpo for lunch because their benefits have been cut. It becomes harder, in other words, to cast the private accounts crowd as moustache-twirling villains indifferent to the plight of low-income retirees.

This is of course nothing new. The two major parties love stealing the wind from each others sails by co-opting the other's ideas. Bill Clinton was a master of this during his two terms. Bush has shown, to the dismay of many fiscal conservatives, that he is just as adept at this as Clinton was, perhaps even more so. Since so many (incorrectly, I believe) assume that GWB is a complete moron, they usually like to attribute such moves to that evil genius Karl Rove.

Which brings me to the second reason Sanchez gives for liberal opposition to Bush's new progressive indexing plan.
The deeper reason for the opposition, though, is that by laying bare the redistributive function of Social Security, it threatens a key to the program's popularity, what economist Charlotte Twight, in her book Dependent on D.C., has called the "strategic manipulation of political transaction costs." Again, from a pure policy perspective, Social Security makes little sense except as a modest welfare program. There is, after all, no earthly reason why most middle class or wealthy citizens need the government to garnish their wages for decades and then provide a retirement benefit later: People are generally perfectly capable of saving for their own retirements. Those who want to paint the program as indispensable are fond of pointing to the large numbers of retirees who rely almost wholly on Social Security for their incomes. But then, when you take a hefty 12.4 percent bite out of people's paychecks——leaving them with less to save——and tell them they can rely on a government benefit later, it's not exactly shocking that many people don't save and rely on a government benefit later.

Of course, this has been obvious to me (and probably most people with any economic sense whatsoever) for some time now. However, seeing it spelled out in such a way got me to thinking; could Karl Rove possibly be that deviously genius?

Is it possible that Rove is so clever that he was able to get Bush to sacrifice more of his already dwindling street cred with the fiscal conservatives in order to expose the truth behind Social Security? Though Bush has already taken much flack from those of us not happy about his free spending tendencies, such an exposure would be a major coup for fiscal conservatism. As Sanchez points out, support for Social Security is sure to wither in the light once the public sees it as a merely another welfare program. Could Rove have known this all along and be using Bush's plan as a means of dismantling Social Security altogether?

Do I need to send Rove a thank you letter or was this just dumb luck?

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