Sometimes, Tom Friedman writes a column that is such complete baloney it makes you want to retch. Rather than risking soiling my shoes, here is a point-by-point rebuttal to Friedman’s opus du jour, titled: “Sorry, Kids. We Ate It All.”
Friedman’s column swallows whole the budgetary malarkey of the corporate Fix-the-Debt lobby and its Wall Street sponsors. Namely, the reduced horizons of the next generation are the result of the gluttony of old folks—and of unions.
But what makes this piece especially appalling (and emblematic) is that the hero of Friedman’s piece is one Stanley Druckenmiller, a hedge-fund billionaire who has appointed himself as the Paul Revere of deficit reduction to warn America’s college students that The Seniors Are Coming. In passing, Friedman discloses that Druckenmiller is also “a friend.” So on top of the absurd logic of the piece, Friedman is guilty of a conflict of interest—using the most valuable real estate in American journalism to do a favor for a chum.
But I digress.
From the column:
[I]f current taxes and entitlement promises are not reformed, the cupboard will be largely bare for today’s Facebook generation. But what are the chances of them getting out of Facebook and into their parents’ faces — and demanding not only that the wealthy do their part but that the next generation as a whole leaves something for this one? Too bad young people aren’t paying attention. Or are they?
Wait! Who is that speaking to crowds of students at Berkeley, Stanford, Brown, U.S.C., Bowdoin, Notre Dame and N.Y.U. — urging these “future seniors” to start a movement to protect their interests? That’s Stan Druckenmiller, the legendary investor….
Let’s start with the backward economics analysis. Whether the next generation thrives or stagnates has nothing to do with Social Security and seniors “on average” getting too good a deal, and everything to do with whether equitable economic growth can be restored. Cutting the deficit will only slow growth.
The issue has everything to do with student debt, but oddly that’s one debt that the Fix-the-Debt ideology, of which Druckenmiller is a key player, never discusses.
As for seniors getting too good a deal, two-thirds of the elderly rely on Social Security for at least half their income. Nearly half of all unmarried or widowed seniors rely on Social Security for 90 percent of their income.
Some seniors, of course—Mr. Drukenmiller’s cohort—are making out like bandits. Here’s a variant on a Bill Gates joke: Stanley Druckenmiller and I walk into a bar. On average, we’re billionaires. But the average retired American is not the one described in the Friedman column.
Contrary to this sort of propaganda, the economic-injustice problem in America is not about generations. It’s about class. Specifically, Stanley Druckenmiller’s class. But Druckenmiller, approvingly quoted by Friedman, blames the diminished horizons of the young on “current spending on my generation” as if he had anything whatever in common with the people reliant on Social Security.
His remedy, also endorsed heartily by Friedman includes:
raising taxes on capital gains, dividends and carried interest—now hugely weighted to the wealthy and elderly—to make them equal to earned income taxes; making all consumers more price sensitive when obtaining health care; means-testing Social Security and Medicare so they go to those most in need; phasing in higher age qualifications for entitlements and cutting corporate taxes to zero, so the people who actually create jobs will have more resources to do so.
However the minor cuts in capital income (the bait) are offset by cuts in corporate taxes, the real game plan is to slash social insurance—which won’t do anything for the recovery and will hurt a lot of people barely in the middle class.
Here’s the best single line in the column. Whatever the outcome of the debt crisis negotiations, Friedman writes,
But there’s one outcome from such negotiations that I can absolutely guarantee: Seniors, Wall Street and unions will all have their say and their interests protected.
Savor that for a moment: Seniors, Wall Street, and unions. Uh, which one of these things is not like the others?
Half of seniors would be destitute without Social Security. Unions represent less than 7 percent of the private-sector workforce and even the wages of union workers are in decline. Unions are being pummeled by the savagery of Republican governors, the ferocity of corporate union-busting and outsourcing campaigns, and the failure of the government to enforce the Wagner Act.
And Wall Street? Oh, them. Well, Wall Street is more profitable than it was before the collapse. The top 1 percent collects 97 percent of the benefits of restored growth, and it dominates political debate. Its paladins like Druckenmiller even instruct the rest of us on why it’s salutary to cut what’s left of social insurance, and have Tom Friedman to do their PR. Poor Wall Street.
Seniors, Wall Street, and unions. That’s a bit like putting in the same power category the Red Sox, the Brandeis baseball squad, and the Brookline High J.V. (They all play ball, don’t they?) Or maybe China, Uruguay, and Malta (all U.N. members.)
Friedman’s guaranteed prediction, of course, is already wrong. Obama (he who will never negotiate against himself) has pre-shrunk Social Security by putting a slower cost-of-living adjustment in his own budget, and deeper cuts in Social Security and Medicare are targets one and two of the upcoming “Grand Bargain” (promoted by Druckenmiller & Co.) that will be the basis of a deal to reopen the government.
Sorry, Kids. We Ate It All. As Tonto once reportedly said to the Lone Ranger: What you mean, “we”? Those who’ve been eating it all are Mr. Druckemiller’s crowd.
Which, lamentably, includes Tom Friedman.