Tuesday, March 22, 2005

The SDS Rides Again

Back in October, in one of my first posts, I compared the ethos of the Bush Administration to the SDS in the 1960s. (At least two leaders of the "conservative" movement actually belonged to the SDS: Melvin Olasky, the Bush confidante who coined the phrase "compassionate conservatism," and William Bennett.) Driven only by ideology, they have no respect either for normal procedures or for other peoples' opinions--they care only about making their ideology supreme. The sad case of Terri Schiavo proves this.
There is hardly a major principle of Amerian law or political life that Republicans have not compromised to make political capital out of this issue and impose their vision of "life" on the United States. Terri Schiavo's case has been adjudicated and studied more thoroughly than any similar case in history. Yesterday NPR interviewed the Florida doctor (who also teaches law) who had spent about a year studying Terri, evaluating her condition, and making recommendations. Not only did he confirm very impressively that all indicators showed she was in a completely vegetative state and capable of only random responses, but he also referred to at least two documented times at which Terri, at funerals for relatives who had spent time on life support, had remarked that she would never want to be kept alive that way. It is not even clear that her parents have disputed this; they argue that she should be kept alive because THEY want it. In short, there is really nothing in the public record to suggest that Michael Schiavo was anything but the caring spouse he claimed to be, or to dispute his argument that he is trying to do what his wife would have wanted. But the Bush brothers--first Governor Jeb, then President George--have trampled upon his feelings and Terri's rights to make a political point, extending the sad drama year after year after year.
Nor is this all. The Congress, of course, showed a disgraceful lack of respect for the rights of the Florida judicial system by passing emergency legislation, simply because the Republican majority rejected the decision it had reached. (The parallel with the Republican Supreme Court majority in 2000 is obvious.) Worst of all, Dr. Bill Frist, the Republican majority leader, disregarded every tenet of medical ethics by rejecting the diagnosis of Terri's doctor based on his on viewing of a home video! "What kind of a doctor is he?" a young friend of mine asked. "A video doctor," her father replied. "He makes diagnoses from video." One hopes that the AMA may step in to remind Dr. Frist of his obligations to his colleagues, as well as to his constituents.
A courageous federal district judge has now thrown out the complaint, and we must await the Appeals court. Whatever its decision the matter is bound to reach the Supreme Court, and, under the circumstances, very quickly. While one can never be sure, I for one will be amazed if they take this case. In the end Terri Schiavo will die, as we have every reason to believe she would have wanted to do. But in the climate the Republicans have created I am genuinely afraid as to what will happen to her husband.
A feature last year on Karl Rove--probably the author of the memo no Republican will now acknowledge, that explained to Republican senators and congressmen what a great issue this was--indicated his approach to politics. He is not interested in reaching for the center; he wants to find more and more wedge issues that will mobilize constituencies enthusiastically. In this case polls show the American people do not support what the Republicans are doing. But it may actually be that they will not care--that they prefer the support of an enraged, self-confident, hopelessly intolerant minority to the support of more sensible Americans. That is a very dangerous prospect for the immediate future.

Saturday, March 19, 2005

A Missing Voice

The death of George F. Kennan the other day at the age of 101 is a milestone in the history of American diplomacy. It also provides a terrifying reminder of the almost complete lack of any real dissent regarding fundamentals of American foreign policy today, and the extent to which the United States's foreign policy elite has succumbed to the temptation of seemingly absolute power.
Despite Kennan's extraordinary influence during the early years of the Cold War, when he helped design and enunciate the containment policy towards the Soviet Union, he was, beginning in 1950, a man out of step with his time. Indeed, as he often acknowledged, he felt out of step with America, and had relatively little trust in the instincts of the American people, especially as reflected in the attitudes of Senators and Congressmen with whom he had to deal. He believed in government by an elite--an intellectual, and to some extent, a moral elite. Yet his views on foreign policy could not hardly have differed more from those of the Straussian neo-conservative elite that hold our destiny in our hands today. Kennan was, more than anything else, a skeptic--a skeptic about power, about American influence in the world, and, indeed, about human nature and the perfectability of mankind. That, more than anything else, divided him from his contemporaries and from the next generation, and turned him into an outcast for the last fifty years of his life.
Kennan saw totalitarianism first hand, both in Nazi Germany and in Soviet Russia, and he had no illusions about it. His role in the formation of the containment policy dated from early 1946, when he warned in his famous Long Telegram that the wartime alliance was over and the United States had to treat the Soviet Union as a hostile power. Yet he was convinced, as he wrote a year later in the X article, that the Soviets did not want war with the United States, and that the Cold War did not require a primarily military response. He supported the Marshall Plan because he felt Western Europe had to be put back on its feet, but he was uncomfortable about the formation of NATO because he did not want to help divide Europe into hostile blocs. By 1950 he thought the Communists had clearly been kept out of western Europe, and that the time had come to reach some kind of a detente with Stalin that would allow the world to live in peace. But it was in that year that he was replaced as head of the Policy Planning Staff of the State Department by Paul Nitze, who argued in NSC-68 that the United States had to achieve clear military superiority over the Soviet Union and roll back its influence before any kind of settlement had been reached. Military supremacy remained a pillar of American policy for most of the rest of the Cold War.
In 1953, at the age of 50, Kennan was driven out of the State Department by John Foster Dulles, who did not have the courage to offer the man who had coined the dreaded word "containment" a new job. As Kennan wrote in the second volume of his memoirs, Dulles knew there was no alternative to containment despite his and Dwight Eisenhower's calls for "liberation" in the 1952 campaign, but letting its architecht go was one way to distance himself from the concept. Kennan's account of his last day at the department is one of the most moving passages I have ever read. It's an irony of fate that certain professions exile the men and women who care about them most, and he, like Col. David Hackworth, was one of those.
From then until 1990 Kennan saw no reason for the Cold War to continue. Only two subsequent Presidents, he felt, understood his views. John Kennedy brought him back into government briefly as Ambassador to Yugoslavia and, in 1963, began the kind of detente with the Soviet Union that Kennan had long advocated, and Kennan made clear in his memoirs that he cherished their brief association. Richard Nixon, Kennedy's great rival, also tried to stabilize the Soviet-American relationship. In 1992, in one of his last published writings, Kennan violently attacked Dan Quayle and George Bush for claiming to have won the Cold War. Everyone, he said, had lost the Cold War, by spending far too much money on arms, by undertaking needless wars in the third world, and by maintaining a needlessly hostile atmosphere. And Kennan was among the first to realize that the collapse of the Soviet Union could easily create a more, rather than a less, dangerous world.
Kennan rejected the idea that the United States had to take a keen interest in political change all over the world. This was, in part, a racial judgment. I discovered a document a few years ago, written in 1962, in which he suggested that democracy only seemed to work among people whose ancestors were fortunate enough to have been born on the shores of the North Sea. That, I believe, was far too narrow a view, but history has shown that the promotion of democracy does not always have the best results. Kennan, I think, understood that the peoples of the world need, to begin with, to live with a certain minimum of food, peace, and security, allowing them to live, work, raise their families, and pursue the arts. Those are the blessings of which the United States has now deprived the Iraqi people, for instance, for two years, with no end in sight.
Kennan's death reminds me of my recent reaction to a fascinating documentary film, The Game of Their Lives, about the North Korean soccer team that competed in England at the 1966 World Cup. The North Koreans, whose flag initially the British Foreign Office did not want to allow to fly for political reasons, won the hearts of the fans of Middlesborough (where they upset Italy 1-0) and Liverpool (where they lost to Portugal, 5-3, in one of the most exciting quarterinals in World Cup history) with their sportsmanship and spirited play. What was more interesting, however, were the more recent interviews the film featured with some of the players in North Korea today. We have become accusomted to thinking of North Korea as a hell-hole threatening the world with nuclear weapons, and it surely is a depressing regime. But the people we saw in the film were clearly eating regularly, and even having banquets on their birthdays. More importantly, the players spoke with genuine affection about their late leader Kim Il Sung and credited his teachings for some of their success.
I do not, of course, share those views, and I don't think Kennan would either. Yet I like to think he would have recognized those views as a product of various accidents of history that have led tens of millions of people to be born, live, and die, under a Communist regime. Kennan would also have appreciated the monumental North Korean effort to rebuild their country (and especially their capital) after it was almost completetly levelled by American bombing during the Korean War. In short, rather than write off the whole country and threaten it with war if it did not change its regime, he would have respected its regime as the unfortunate outcome of history--much of that history no fault of North Koreans themselves--and he would have trusted to time and human nature to do something about it.
It is that view, sadly, which seems almost to have disappeared from American public life. One hundred years ago, the Spanish-American War generated a healthy anti-imperialist reaction, and many distinguished Americans argued that we should lead the world only by example, and that the worst native government was better than the best one that could be imposed from outside. Now the idea that we know what is best for everyone has become orthodoxy, and not only in the Bush Administration. We do not debate our goals; we debate how we can achieve them. Thus we shall all suffer if they prove, once again, to be far too grandiose.
Kennan was an independent thinker, and he suffered the fate that most such thinkers undergo. In 1950, when the Soviets exploded an atomic weapon, he argued rather brilliantly that the use of nuclear weapons could not possibly serve American objectives--but he could not halt the arms race. Only briefly did he enjoy the influence he deserved, but he always remained true to himself and always had unusually interesting things to say. In 1983, when I wrote and mailed him a somewhat mixed review of his book on the Franco-Prussian alliance, he immediately replied with one of the nicest letters I have ever received. It was my great regret that when my book on Vietnam appeared in 2000, he was apparently no longer well enough to read it. Yet I have to believe he would have recognized his own influence, and I am glad to have done my small bit to keep some of his ideas alive.

Friday, March 04, 2005

The Back Door Flat Tax

The Bush Administration is probably both the most ideologically driven and the most secretive in American history. The combination makes it very hard to determine its real motives on many issues, including Social Security privatization. To some extent secrecy and ideology feed one another; if we don’t know how the Administration justifies its policies even to itself, we can’t bring reason to bear to criticize them very effectively. This combination also allows the Administration to benefit from the rationalist illusion that dominates the thinking of modern men and women—surely, we suppose, they must have some good reason for what they are doing?
All of this applies, in spades, to the Social Security controversy, since no one can has even dared to claim that private accounts will either improve the financial picture of the federal government or provide money for equal or higher benefits to retirees. What the plan is actually designed to do remains something of a mystery, other than give conservatives the satisfaction of having undone the major achievement of the New Deal. But in remarks a couple of weeks ago, President Bush opened the door to a new interpretation when he indicated that he might be willing to lift the $90,000 cap on payroll taxes. Some one within his Administration may have decided to try to repeat the great trick that Ronald Reagan played in the 1980s—to claim to cut taxes, while actually redistributing them to bear more heavily on income than on wealth, and to make them less regressive.
As of now, workers making up to $90,000 pay a 6% Social Security tax, matched by their employer (they pay 12% if they are self-employed). Income over $90,000 is not subject to the tax. This is obviously very unfair to two-career couples: two earners making $180,000 total could pay twice the tax of a single worker with the same income. It also makes the tax regressive. If you made $900,000 last year, you paid just .6%, not 6%, to the Social Security Administration.
The President opened the door yesterday to putting an end to the cap. This move, according to the only estimate I have seen in a news story, should increase receipts by $100 billion a year. At first glance this sounds like a good idea, and eventually, in my opinion, it will be—but not yet. That is because we do not need that money to pay for Social Security benefits yet—under current predictions, we won’t need it until 2018, and those predictions are conservative. But the Bush Administration does need that money, desperately, to try to reduce the deficit it has created. What we have here, actually, is a replay of the trick that Ronald Reagan pulled in 1983—to sell a more regressive tax system as a tax cut.
Despite oceans of Republican rhetoric over the last 25 years, Ronald Reagan did not cut federal taxes. Although his initial cuts and a recession essentially froze revenues for two years, from fiscal 1981 to fiscal 1989 federal revenues rose from $599 billion to $991 billion, and did not decline as a percentage of GNP. What changed was where the money came from. The share provided by Social Security payroll taxes—significantly increased in 1983—rose from 30% to 36%, while the shares provided by personal and corporate income taxes fell by 3% each. By 1989, the excess of Social Security receipts over benefits totaled $52 billion, all of which was spent by the federal treasury in return for 3% bonds. The excess for fiscal 2004 is $151 billion. Meanwhile, as I have already noted, the percentage of federal taxes represented by Social Security receipts has continued to rise until it has nearly equaled personal income tax receipts. Adding the new $100 billion by eliminating the cap would increase Social Security receipts over personal income tax receipts. More importantly, it would allow the Administration to claim a $100 billion cut (about 20-25%) in the ballooning federal deficit. It would also increase the growth of the trust fund by $100 billion a year, increasing the claim on the federal treasury that future generations will have to pay off. While the Trust Fund is, as I pointed out before, a real asset protected by the US Constitution, it is not self-financing, and the Federal Government will have to raise taxes or increase borrowing when it comes due sometime in 2018 or later.
In a sense, the Administration, by lifting the cap, would be introducing a flat tax through the back door. Taxes wouldn’t be completely flat, since personal income taxes remain progressive (although less than half as progressive as they used to be), but as personal income tax rates continue to shrink, the flat 12% payroll tax (counting the employer contribution) would represent more and more of total receipts. Meanwhile, the wealthiest Americans would be working on more and more ways not to count their income as taxable wages and salaries.
All this does suggest, to me, a more sensible means of doing something about Social Security and its impact. We should now do away with the $90,000 cap, but we should also cut back payroll taxes to the level actually required to pay current benefits. This cut would be substantial. Fiscal 2004 receipts from contributions were $472 million, and ending the cap would raise that, reportedly, to $572 million. Fiscal 2004 benefits totaled $415 million. Without the cap, the payroll tax could be reduced by 27% and still pay current benefits—in other words, from 12% to about 9%. That is the figure that everyone, regardless of income, should start paying now. And every year, as needed, that figure should be raised by the small amount necessary to continue paying full benefits—until we find it expedient to begin drawing on the Trust Fund instead. This would have the additional benefit of providing a real tax cut for low-income workers, who are much more likely to spend it and give the economy a boost—the situation that prevailed during the growth years of the 1950s and 1960s, which were actually much more impressive than what has happened in the era in which we have been abandoning progressive taxation.
As Pat Moynihan pointed out in 1984 or so, as soon as he realized what had happened to the reform he had promoted, Social Security should be separated from the rest of the Federal government. The reform I suggested above would, of course, add $166 billion more to the federal deficit. That should be financed with higher progressive income and corporate taxes—simply returning to the level of the Clinton years would probably do the trick. But that would be a more economically just America, and that is not what the Administration wants.