14 March 2002
Our President and Congress make a big noise about corporations going belly-up and the “scandal” of insider trading, so they propose “tough new regulations” to restore investor confidence in the stock market. I’m a little confused. Aren’t crimes like fraud, theft, extortion, and perjury already illegal? We don’t need new laws to “restore confidence.” Artificial reporting requirements are part of the reason that many businesses are having a rough time of it already.
Now, I do not intend to diminish the very real trauma for shareholders, pensioners, and employees who are getting hurt in the fallout from the failures of Enron® and WorldCom®, but the sad fact is that some enterprises don’t cut it, and some people don’t do well in the market. It’s tragic, but the only alternatives to the free market are Fascist Italy, Nazi Germany, Communist China, or Soviet Russia. So when Republicans® and Democrats® vow to fix the system, to protect the consumer, to cushion the investor, and to save capitalism from itself, I have to say, “Hold on to your wallets, folks, you’re about to get gored.”
The fact is, bankruptcy isn’t all bad news. It isn’t fun, but sometimes it’s the best thing in the long run. When a company goes under, its material assets don’t evaporate, and the talents and experiences of its many employees don’t disappear. The market will reallocate them to other tasks. It is far better for the economy for a failure like Enron to fade into history, than for “successes” like Amtrak and the US Post Office to continue sucking up taxpayer subsidies and posting record losses quarter after quarter. When a capitalist makes a bad decision, the market mercilessly shuts him down. When a government agency makes a bad decision and loses record amounts of money inflicting record amounts of damage, the Congress increases its budget.
If private citizens ran an operation like the Social Security Pyramid Swindle, they’d be in prison. It’s long past time to retire that fraud. Liability to three generations of Social Security and Medicare victims can arguably be considered to be a part of the Federal Debt, and settlements based on divestiture of Federal Assets may provide us with the leverage we need to retire these schemes.
I want every victim of the Social Security Scam to get back every dime that was taken plus interest. How much interest is hard to say, but we can have that argument later. Victims who trusted the system and are now wholly dependent on it should get the help they need. The help they NEED. Yes, I propose means testing. The Congress must change the statute so that those retirees who are able to care for themselves will not get any more than a just return on what was taken.
Most important of all, however, is to let every working American stay out of it altogether. Let them save the money if they wish, or put it into their coin collections, or bury it in the back yard. Better still, let them invest it in their own retirement, and let them earn a market return, rather than the anemic performance of the Social Security “Trust Fund.”
Savvy politicos have named Social Security the “Third Rail of American Politics.” It is a reference to electric subway trains that draw their power from the charged third rail. You touch it and you die. It’s a very colorful expression, and it may well have some merit as a warning to those who would court the free lunch vote, but a candidate who refuses to acknowledge the inevitable collapse of the system doesn’t deserve your respect or your vote. We have nothing to lose by retiring Social Security except constantly rising taxes and constantly diminished prospects for a survivable retirement.
Pessimists will have you believe there is no hope, ever, of changing the system, and since they haven’t the means to make a difference, they have relieved themselves of the responsibility to make the effort. I’m not surrendering to their future, and I hope you won’t either. We can make a difference, every day, with every vote, with every purchase, with every word and gesture and action. We are making the future every day. It’s up to each of us.
update 180311: Very little has changed on this front except the public notoriety of Martha Stewart’s time in stir, providing critics of the Iraqi invasion the handy slogan, “Martha lied, but no one died.” It is sad, stupid, and ridiculous all at once. Ms Stewart wasn’t even convicted of the outrageously contrived non-crime of “insider trading” but of simply stymieing the FBI’s pointless investigation.
update 210325: Considering the evil that the FBI commits, Martha deserves a full pardon. Maybe even a medal. Lying to the fuzz wastes their time and obstructs their investigations. I wouldn’t recommend it, because they are heavily armed, highly vengeful, and demonstrably homicidal. But I still salute courage.
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