Tom Friedman’s Worst Column Ever

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.

Comments

Thanks for your recognition of the amazing similarity between Friedman's arguments and his own self- perceived well-being. Relying on him to form our "conventional wisdom" would be a disastrous mistake.

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I am not defending Friedman, but there is a mistake in your analysis. The unions are fully invested in Wall Street, and therefore shoulder as much responsibility as those who manage their funds.

If the unions were to divest from Wall Street, like we did from South Africa, that a radical transformation could occur, but in this case, we cannot go back to reinvesting through the financial markets.

Bottom Line: investing is slavery through proxy. If you can get unearned income, then someone must be laboring without getting paid. In the case of the unions, and the middle-class generally, they have become slaves of themselves, attempting to collect interest with one hand while paying it with the other. This doublethink is not politically or financially viable.

Therefore, some degree of complain against the unions is warranted. They have the power, but are not acting wisely.

Of course, the rich deserve criticism, too. They could pay more to employees and vendors, rather than being obsessed with making more profit when they already have too much.

As far as the kids go, they are getting mis-direction from all sides.

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stevec,

Interest & dividends are earned. People pay interest to lenders to compensate them for the use of their money (& for putting their money at risk, because many lenders don't get repaid). Dividends are distributions of profits paid to corporations' owners (i.e., their shareholders).

People are free to loan to others and take risks with it, or not loan it. People are free to invest their money in corporations to provide them with start-up money or money to expand and thereby take risks with their money, or not. Where's any slavery in that?

Without borrowed or invested capital, business startups & business expansions would be severly limited. Business startups & business expansions create jobs. Those jobs allow the middle class to buy homes, feed their families, & help pay to educate their kids. And the property taxes from their homes help pay for schools & teachers.

Plus, government would be nothing, could do nothing without the taxes that businesses & their employees pay. The taxes that businesses & their employees have paid have created & sustained every government job, program, & project in America. And without those businesses & the employees they hire & the taxes they pay, every government job, program, & project in America would end.

A CEO, a union worker, and a non-union worker walk into a bar. There is a tray containing a dozen cookies with a sign saying "TAKE ONE. THIS IS ALL UNTIL TOMORROW." The CEO takes one to eat, and stuffs 10 in his pocket. Then he says to the non-union worker, "watch out, those unions are after your cookie."

I disagree with "stevec" about investment income being AUTOMATICALLY EVIL. This is the philosophical line used by REAL socialists (as distinct from the Americans CALLED "socialist" by the right wing extremists). Investing for a profit is moral, but taking TOO MUCH of the profit and not paying the workers who help create the profit is NOT moral. Unions and average Americans invest in Wall Street securities in order to save and have their savings grow. But any intelligent worker knows that the little bit earned by his or her investments, while good for the future, is not a substitute for getting a bigger paycheck and/or benefits NOW.

H.L. Mencken speaks for me here (although he was obviously not so unlucky to live at the same time as Tom Friedman, and was referring to Warren G Harding): He writes the worst English that I have ever encountered. It reminds me of a string of wet sponges; it reminds me of tattered washing on the line; it reminds me of stale bean soup, of college yells, of dogs barking idiotically through endless nights. It is so bad that a sort of grandeur creeps into it. It drags itself out of the dark abysm of pish, and crawls insanely up the topmost pinnacle of posh. It is rumble and bumble. It is flap and doodle. It is balder and dash.

Gee, is Druckenmiller driving a taxi now?

I do not see it the way other people see it. Since Clinton was President, and I found it could be done, I have contributed a small amount every year to the Bureau of the Public Debt and told them to use it to pay the debt. So the way it breaks down financially is like this:

Contributions for payment of the national debt, 2008-20012

Bill Gates, Warren Buffett, and all other Democrats plus

Mitt Romney, the Koch brothers, and all Republicans

- $6,000,000,000,000.00

Independent voter Robert B. Winn

+ $160.00

I also informed the President that I would accept nothing from him or his corrupt political party from a thread to a shoelatchet. Actually, Abraham said that to the King of Sodom, but it seemed appropriate to the present situation.

You, sir, have honor, integrity and self respect. Oh yes...and my respect.

So the author believes the problem is that America doesn't have "equitable" growth? Laughable.

After WWII, America produced 88% of the world's goods, now it's 8%. Is that equitable? Why can't we get back to 88%? Well, if we level every other industrialized country, that would be a start.

The US benefited from having a vast, untouched industrial base that could be converted to consumer goods at the very moment that every other major industrialized country was decimated, coupled with customers dying for products, both in the US, due to profits from such goods, and abroad, due to the fact that any stoves, refrigerators, cars, and TV's they had lay in ruins.

And couple the aforementioned American creation of wealth when the government promoted such a thing, instead of deriding it.

The ignores America's stagnant economy on 35% Corporate Tax rate, high taxation, insurance, regulation, health insurance, labor, etc., etc. etc. And only IF the Democrats would be in charge things would be SO much better. Laughable, you are in charge, we'll never see overwhelming growth, you're killing us.

Thomas counsels the young to orchestrate a huge take back from today's older generation.

What Thomas suggests is that the government renege on its promises & commitments to one generation in order to give more to the next.

Well, one day, today's generation will be the older generation. When that happens will the next generation rebel & cut back on the promises & commitments government made to today's youth?

Because if Thomas's suggestion is acted upon, it makes it more likely that tomorrow's generation will pull the rug out from today's youth to provide more for themselves.

When people provide for themselves (instead of providing for the generation ahead of them), notice that the conflict of interest suddenly goes away & the possibilities of getting railroaded by the preceding generation diminish considerably.

Just some things for the venerable Mr. Friedman to consider.

"whether equitable economic growth can be restored"

The important question is whether any economic growth (beyond 2%) can be restored at all.

Also, before making "equitable" the standard for economic growth, Kuttner needs to let us know what he means by that.

Thank you so much for writing this column. I am continually outraged by the Big Lie about the mean old people taking away the poor kids' futures. I am sick of Friedman and his "I'm the globalist celebrity intellectual making you anxious about the future" brand promotion. Those of us of a certain age know how vital SS will be to our survival as the years go by. Okay, Tom, you're a RICH baby boomer, good for you. Screw the rest of us. This campaign against the elderly and the unions reminds me of his hysteria a few years back re the "fossil fuels crisis." His solution? Massive taxes at the gas pump to "alter behavior." Yes, Tom, let's teach that single mom working at McDonald's who can barely make ends meet that she's an energy hog. I agree, she should have less money to buy her kids' clothes. A message I would send to 20 year-olds: If you let them start slashing SS and Medicare now, there will just be LESS for you when you retire, because once the deficit hysterics get going, they won't stop until those systems are privatized. The best defense of young people's SS in the future is to hold the line against the "entitlement" jihadists now.

My generation (who are now seniors) made promises to ourselves concerning free medical care and a nice jucy pension when we reached retirement. We did bother to pay for these things we just built an obligation into the law and then put the costs on our children (then unborn). Now the children are grown and they ask themselves why they should be bound to honor this agreement in which they took no part. It is a valid question. They were not even born when we sold them into bondage. Of all the immoral and greedy schemes for self enrichment that humanity has dreamed up, this has got to take the cake. It is diabolical. The young are too stupid to realize what has been done to them and by the time that they realize that their lives have been blighted it will be too late to get back the money and resources they have lost. I myself was too young back i the 60's and 0's to realize what was really happening but it is clear a glass to me now. I feel sorry for those who paid in all ther lives thinking that they were paying for their retirement. They were not. The money they paid was stolen by the government and frittered away on wars and welfare and other "socal projects" that seems cool at the time. At the present we can't even point to a single worthwhile thing that the money was invested in. If a the managers of a private retirement fund, e.g. TAA-CREF, had treated the contributions of clients in this fashion, the trustees would all be in federal prison. One cannot fritter the savings and then expect someone who is not even born to come along and save the day! Surely this is pretty obvious. Like Jacob in the bible we have stolen our patrimony.

While not as old as you I presume but by no means a Generation X I can tell you I do not plan on any assistance from the government when I retire (if I retire). I am not bitter by this either and I still feel its my obligation to help as many as I can by contributing my taxes as a viable income earner. I od not think this was malicious intent when these programs were originated but as time has gone on I have witnessed many changes, GW's changes to Medicaid and Medicare comes to mind for one, that have led us to this point.

My point is oftne times when you look at something with hindsight you forget that there was a reason no matter how poor as to why things evolve the way they do. My major worry is will I be around when a government shutdown is caused by a spike in interest rates or some other fiscal calamity and not by a bunch of Tea Party blowhards. The best analogy I cna offer is this -- at current levels of Federal government revenues we are earning a 40k a year job with a million dollar house to pay for (3 trillion in revenues with 126 mil in unfunded liabilities -- this is before the ACA). I think any sane person would realize this is a recipe for disaster! And keep in in mind this 40k in yearly income is short by approximate 7k a year to pay for its current obligations. The numbers are truly tragic and unnerving. I hope for the best but expect the worse but I am glad I do not run my personal affairs as shoddy as this.

"Cutting the deficit will only slow growth"

In the short maybe....in the long it helps. We have been in the "short" term for 5 years. It, with QE, really has done nothing in the short term and will probably hurt mightily in the long term......

Was it indeed Tom Friedman's Worst Column Ever? I nominate the one where he declared aAmerica a Democracy which is governed by "majority rules."

Well I read this article before this blogger posted this article and I think he did a number of injustices to his analysis.

In the article Friedman does stipulate that SS Medicare etc... are needed and viable. I drew from my own comprehension that Friedman felt there is some need for restraint.

Personally I agree with Friedman that their is at minimally a pause for concern. The amount of unfunded liabilities is staggering. In addition SS has solvency issues due to the inclusion of disability benefits paid at its expense. I cannot fathom why disability wasn't a separate self funding entity. Both are needed programs but what is disabilities motive for clamping on fraud and scrutinizing for need while it robs from SS coffers?

Secondly the work force is and will continue to decline as a percentage of population. This budget crisis marked for the FIRST TIME that SS would of not taken in enough revenues to pay for its outlays -- Hence the looming October 31st deadline was the real scary date. This is a trend that will continue to escalate as our seniors reach retirement age.

I was curious as to why Friedman lumped in corporate taxes as a means to solve this potential fiscal nightmare. I would of preferred more substance instead of "yes this is what is needed" in regards to corporate welfare. But having lived in Maryland, Illinois and New York I have witnessed firsthand what I believe to be over zealous regulations and taxation that has starved off economic growth. New York state in particular has ranked near last in economic growth for 50 years now and by the new definition of insanity you would think Albany would realize something is amiss.

Irregardless of whether my above argument holds any weight I think the author of this blog should some self restraint. This type of dialogue is exactly why we have had to endure the last 17 days of an absent Federal Government. I think we all should be able to agree that it is time to call such articles out for the cancer that they are. If you wish to refute Mr. Freidman's work at least have the decency to behave a little better than a ten year old while deconstructing it.

It's pathetic how this guy's column spends no time on Harlem's Canada from Mr. Friedman's column. What a waste of space.

My fond hope, as I approach retirement age, is that the members of the "youth vote" pay through the nose and live lives with a much reduced standard of living because of tax rates of 70% to pay for all of the income redistributing programs for which they voted in their oh-so-enlightened youth.

Yes, the smug, self-righteous, morally vain 19-25 year olds,and the 18 year old children who overwhelmingly voted for Barack Obama deserve to pay the piper for the collectivist, redistributive policies he pursued.

The little dopes thought we could insure 30 million people who couldn't or wouldn't pay for their own health insurance and costs would go down! And believed that the program would lower the deficit? Ah, the quality of the union and Democrat-run government schools. Teaching Left-wing dogma and ignoring critical-thinking skills.

So committed to an intentionally vague goal of "social fairness". Cheering the view that, "everybody's better off when we spread the wealth around." Adamant that huge numbers of "kids" should have their college education subsidized by other people. It will be well-deserved when it's their money that is being spread around.

Oh, they were SO in favor of socialized medicine. But now that they see how expensive their health insurance is, and that it won't even help most of them because their deductible is so high, they're ducking the system! They'll pay the $95 penalty and sign up if they get seriously sick or injured.

Even the 25 and 26 year old "kids" who stay on their parent's policy will get a big surprise when they find out that keeping you on their policy is so expensive that many of those parents won't be able to afford it! And if the parents say they can stay on the policy if they pay the extra premium, they'll have one of Obama's "teachable moments". You mean it costs extra to have an additional person on your policy? And it's even more expensive if the "child" is over 18?

These young hypocrites will opt out of Obamacare rather than have THEIR income spread around. Maybe they'll understand why so many young people opted not to buy health insurance before Obamacare. Back when individual liberty was still in fashion. But as Michelle told you, "Barack will never allow you to go back to your lives as usual."

There was a time when anyone who said such a thing would never have been elected. When the president wouldn't dare - and wouldn't even think of - telling us how to live our lives. Of course, he did promise he would be, "fundamentally transforming the United States of America". Well, he's doing that alright.

So they won't be able to afford vacations to Hawaii or that boat they dreamed of. Or replace their 16 year old car. And life in an apartment as opposed to a single-family home will be well worth it, because their happy to spread their income around to achieve "fairness".

Yep. I have no sympathy for the arrogant, inexperienced ignoramuses who imposed massive debt and taxes on the rest of us. Pay up kids. I'll be aggressively consuming my share of fairness. And my kids will need you to subsidize their college education. After all, spending your salary on my grandkids is more important than spending it on yours!

So pay up kids. I'll be drawing $6,500 per month from my 35 years of investing. Plus about $2,900 per month in Social Security. And since my two rental properties will be paid off in four years, I'll start earning income from them. It'll sure be great to have you subsidizing my health insurance. It's an entitlement ya know. I'll be paying into it. And I can't be turned down! Boy my wife and I will sure take advantage of that benefit. Before and after every cruise. If I get injured on my boat.

Spreadin' your wealth around is sure gonna be good for me!

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