The doomsayers have managed to persuade the majority of people that they will not receive anything from social security, though that is completely false. The idea that the only way to solve the overblown social security ‘crisis’ is to raise the age of full benefits eligibility from 65 to 70 is wrong. There are other ways to fix social security other than raising the retirement age. The most obvious is to remove the cap that limits the social security payroll tax to only those incomes below $106,800 (the ceiling for 2009). Currently all incomes above that limit do not contribute to the social security trust fund. But there should be no upper limit. As Kevin Drum points out in a handy chart, that one move alone would solve the Social Security problem but there are other ways.
Of course, lifting the cap on earnings that are subject to the social security tax is one of those solutions that will adversely affect only rich people who will hardly notice it but since it is this same group that forms the oligarchy that runs the government and the media and sets policies, such policies are not even considered because this greedy group cares only about increasing its wealth even more, aided in their attempts by the media ignoring this systemic feature. The New York Times recently ran a disapproving article about how the elites in Pakistan avoid paying taxes: “That is mostly because the politicians who make the rules are also the country’s richest citizens, and are skilled at finding ways to exempt themselves.” I wonder when the NYT will realize that the US is not much better?
How much one cares about the issue of raising the social security retirement age depends on what kind of job one does. It matters greatly if one has an easy job or a hard one. The attitude to work of elites in well-paying and interesting jobs done in comfortable conditions is a far cry from the experience of people who work because they must and are forced to do hard physical labor every day or work in conditions where they do mindless routine work under the constant supervision of bosses and at jobs that provide no intrinsic satisfaction. The former group enjoys working and tries to continue doing so as long as they can while for the latter group, retirement is a welcome relief, something they look forward to, a brief period of time when they can relax and enjoy life while still (hopefully) having fairly good health, before they become decrepit and die. Such people view raising the retirement age with horror and who can blame them?
Take my job. I spend my days almost entirely in climate-controlled buildings sitting at a desk. I have a lot of control over what I do and when I do it. The work is not repetitive and is intellectually stimulating. I enjoy my work so much that I take it home and do it on weekends and holidays too. So while I may put in a lot of hours at my job, it is not really work in the sense that most people conceive of work, and it would be absurd for me to claim that I am overworked. A raise in the retirement age would not be a blow to me.
And yet, all the media bloviators seem to not recognize this obvious fact about the importance of the quality of work that one does. They act as if it is only the number of hours that one puts in that matters, and not the nature or conditions of work. I am sick of hearing business and financial types justifying their high incomes by bragging about how hard they work. The media seem to venerate these people as highly industrious, as if an hour put in as an investment banker is the same as an hour working in an assembly line or on a construction site or as a waitress or picking fruit and vegetables on a farm.
The arrogance and sense of entitlement of Wall Street types is amazing. They seem to think that they are doing us all a favor and that if we make reforms that cut into their astronomical earnings, that they will teach us all a lesson by ‘going Galt’ on us, quitting what they do, taking over our jobs, and throwing us out of work, as seen in this email from one such person that has been widely circulating:
What’s going to happen when we can’t find jobs on the Street anymore? Guess what: We’re going to take yours. We get up at 5am & work till 10pm or later. We’re used to not getting up to pee when we have a position. We don’t take an hour or more for a lunch break. We don’t demand a union. We don’t retire at 50 with a pension. We eat what we kill, and when the only thing left to eat is on your dinner plates, we’ll eat that.
For years teachers and other unionized labor have had us fooled. We were too busy working to notice. Do you really think that we are incapable of teaching 3rd graders and doing landscaping? We’re going to take your cushy jobs with tenure and 4 months off a year and whine just like you that we are so-o-o-o underpaid for building the youth of America. Say goodbye to your overtime and double time and a half. I’ll be hitting grounders to the high school baseball team for $5k extra a summer, thank you very much.
So now that we’re going to be making $85k a year without upside, Joe Mainstreet is going to have his revenge, right? Wrong! Guess what: we’re going to stop buying the new 80k car, we aren’t going to leave the 35 percent tip at our business dinners anymore. No more free rides on our backs. We’re going to landscape our own back yards, wash our cars with a garden hose in our driveways. Our money was your money. You spent it. When our money dries up, so does yours.
Yes, all you lazy landscapers and chicken pluckers and farm workers and teachers out there whining about low pay and lousy working conditions. You better not blame the investment bankers and put restrictions on what they do and can earn because they will quit and come and take your jobs in revenge! Do you realize how impossible it is to live on just $85,000 a year ‘without upside’ (whatever the hell that is)? Because you know something? The reason they have been successful so far is because they are not only much smarter than you but they are also genetically programmed to work hard irrespective of what the job is or how much it pays, and they can do your job, whatever it is, much better than you can. So you better not mess with them.
The reality is that the despised landscaping or farm worker jobs are not only much harder than white-collar jobs but also actually produce things that people need and use. The Wall Street types represented by the author of the above email are actually parasites, making a living off other people’s money. They have no idea what real work is and yet think they do.
Unbelievable.
POST SCRIPT: The Wall Street business model
Cartoonist Tom Tomorrow gives the perfect summary of the thinking and morals of the Wall Street investment bankers who caused the financial crisis with their speculative practices.
Mano, great work on this. I am still amazed the social security ‘problem’ isn’t fixed. As you pointed out, removing the cap on paying into social security is the easiest solution, and given the push back on the wealthy, could be politically viable. Dr. Robert Binstock at Case has some interesting viewpoints on this topic and has co-authored a book called Aging Nation, well worth the read.
Mano --
Every time I hear a threat that someone is “going Galt,” it seems to come from somebody without whom, society can get along just fine. The greatest irony example is the owner of the “Going Galt” blog: http://www.goingjohngalt.org/blog/ , who has a notice on his site that he is currently looking for a job.
The entire premise of “Atlas Shrugged” is patently ridiculous. There are these super-geniuses who can do no wrong, all of whom are wealthy & successful (because in Rand-world, money is a direct function of merit -- nobody ever inherited or stole their money). These supermen are so petty that, despite their wealth and success, they’re willing to let the world collapse because they’re not getting quite as much money and recognition as they otherwise might. And we’re supposed to view them as role models.
I view the Wall Street collapse as symptomatic of a larger problem. In the 30s & 40s, we had World War II, and pushed our best mathematical minds into physics, chemistry, cryptography, engineering… as a result, we got the A-bomb & the first computers. In the 50s & 60s, we did the same thing because of the Cold War, and we got space travel out of it. In the 70s & 80s, the best jobs for the mathematically inclined were in computers. But somewhere around the mid or late 90s, without anybody noticing, the math job of choice became banking. So, some of the best mathematical minds in the country go into a field wherein the most ruthless & deceptive practices get rewarded (as opposed to science or engineering, wherein that won’t fly), and nobody else understands what they’re doing well enough to be able to regulate them, until it’s too late.
I remember reading this message from Wall Street to the proles. My response today is the same as it was then: “Bring it!” Thanks for your valuable, scathing, and reasoned insight, as usual.
I’m not a violent person, but that letter made me want to punch the author. Personally, I’m not afraid that Wall Street types will take the jobs of “lesser” people. They might be able to landscape for a weekend, but to do it every day, regardless of weather, is a different story entirely. And I think the author lacks the compassion and humanity to teach 3rd graders.
But I have hope. I think consciousness is raising, and people will begin to demand that what they put into the system is given back to them, rather than given to the rich.
Thank you for this great article, Mano.
Why waste time raising the retirement age on folks who can’t get work anyway? I know so many people over 55 who have lost their jobs and can’t find employment to pay into SS! There are only so many Walmart greeter positions to go around.
It’s just another of the government’s stupid little band aide solutions to a huge gaping wound.
Great article, Mano! I had no idea about the cap.
To underscore your words, here’s a quote from the a Mr. Rizzo, a Chief Administrator of one of the poorest towns in California. From the article:
“Rizzo was the highest paid at $787,637 a year — nearly twice the pay of President Barack Obama — for overseeing one of the poorest towns in Los Angeles County.”
So here’s what the guy says to justify his enormous salary:
“We work a lot. I work with my community every day,” the mayor said, as he shook hands with and embraced people leaving the food bank Thursday. ”
Article: http://news.yahoo.com/s/ap/20100723/ap_on_re_us/us_bell_salaries
the people that talk of going ” galt,” are victims of white privalage ( as was Rand) they have never had to consider the feelings of the few. the reality is that long before finance and MBAs people were engaging in commerce ( as far back as 3000 BCE ) there were power brokers in those days too, but they had to be tough and acually work with the commoners. That all changed in the wake of WWII, suddenly you had a class of people exempted from sacrifice. Todays blue collar man would easily survive being sent back in time at any point, the typical MBAer would collapse with fatigue starting aroung 1900. ( btw i mean not to disparage all MBAs sorry)
The effects by which privilege becomes ‘hereditary’ can be subtle. Take for example the unpaid internships that many college students take during their summers or soon after graduation that enable them to get valuable work experience and their start in good jobs. Only well-to-do students whose parents can support them can take these internships. Thus students who need to earn money are disadvantaged even before they start work.
Hey Mano,
While I may and do agree with many of your points about the SS system you really don’t have to paint with a big broad brush, LOL
I am a landscaper in Birmingham, Alabama the unlazy type.
Please continue sharing your unique ideas, as I find them inspiring that not all educated people are stuck on theory only.
Wonderful post, Mano! When I worked in the corporate world, I was aware that that was the cushy job, and I have always been impressed by the people who worked in the factory that I was responsible for, and in the recesses of my mind I’d sometimes permit myself to wonder why it was that I was permitted to earn so much more than they.
I’m not saying I didn’t earn my pay, I’m saying they were generally underpaid if all we’re going to consider is “hard work.”
I especially loved the “going Galt” email you posted -- thanks for the comic relief! When the crunch comes, I’ll be looking for the ex-Wall Street types to be cruising the neighborhoods with lawnmowers and weed-whackers!
Take good care and may God bless us all!
Mano, thanks again for an excellent post.
I wanted to point out that all the Wall Street types, who seem universally to subscribe to the elitist fantasies represented by Atlass Shrugged, really don’t add anything to the economy? Other people create the wealth by dint of their hard work and enterprise, their inventiveness, risk-taking and sweat.
Wall Street simply moves the wealth around, sometimes into save investments, other times into not-so-safe places, with the only common element being that they take their cut from each and every transaction.
I honestly believe that Wall Street serves a need in our society, but as I said, in serving that need they add absolutely no value. They should keep that in mind as they collect their oversized salaries and strut about bragging about how hard they work.
Great post. I especially like the line, “The arrogance and sense of entitlement of Wall Street types is amazing.”
It is also heartwarming to read how much you like your job. I, for one, had a high stress job that I was glad to exit this last May. I am loving the challenges of redefining myself and launching a new season of my life.
Like above, I’m bookmarking your site.
-Rich
Great article! You are quite accurate with your description of “parasites”.
I am a carpenter, although attempting to change professions, if some white collar, “girly handed” (no sexism intended) individual came on my job I would “chew him up and spit him out”. The truth is these soft individuals that are born of privilege, to a large majority, have no idea what work is. I spent years working like a dog at all hours, when the sun was up I worked. Few of that class could do this, however, the truth is, I could do their job.
I like your common sense solution to social security. Sounds feasible and all government is guilty of failing to care for the system properly. All parties of all persuasions fail. Why don’t we have more good common sense politicians?
Why don’t you run for office?
I enjoyed your article and will be checking back in.
OK, maybe there is a good solution to fixing the social security problem. But the real problem is, will the powers that be want to do this? I for one am of the conspiracy theory mindset that there is more than meets the eye. Something is not quite right with the state of Denmark, or the United States for that matter.
Thanks for clearing this up, Mano. I agree with you -- there is an enormous sense of entitlement on Wall Street. Any time people get that comfortable, there should be alarms raised all around.
Another interesting article Mano. Perspective is an interesting thing. When you lump together ‘Rich’ people one might be forgiven for thinking that you also mean those business owners that employ all those carpenters and landscapers -- who without them would have no job to go to.
Whilst I agree that there are those who are very overpaid for what they do and probably know no better, I still say it is a matter of perspective. If a chicken plucker loves their job, they too will not look forward to retirement and be happy to continue working.
The social security question is one thing, but Mano, really, this class warfare thing is a little over the top. Whoever wrote that letter is a moron to be sure, but he is an exception. “The rich” (don’t spit in scorn at those words) are sometimes arrogant, but they are also the ones who put in the time, took the risks, and started businesses that hire the rest of us. And most of them didn’t start in air conditioned offices.
Jay,
Actually most of the rich people probably did start out in air-conditioned offices or homes. The Horatio Alger story that people make it on their own applies to an increasingly small number of people. It is a myth perpetuated by the wealthy to imply that they got where they are because of superior effort and ability. Social mobility has steadily decreased over time. The best predictor of how well off you’ll be is how well-off your parents are.
As for class warfare, the rich have always been waging it on the poor but it is never called that when they do it. But when others point it out, people cry out “Class warfare!” as a means of silencing them.
Thanks for your valuable, scathing, and reasoned insight, as usual.
This is really sad for many people, for most people are struggling to get by and they are just praying for their retirement. But one thing that is crazy is how this government has our people thinking, for we do not necessarily need a job to retire…
Reggie Barnett
Excellent article with some very important points. We definitely need some serious regulation of Wall St. if things are going to improve for the real hard working man/woman.
It’s been a long time since I read someone’s views that resonated so soundly! The attitude of Wall Street and the banking system in general infuriate the majority of people…
The truth is these soft individuals that are born of privilege, to a large majority, have no idea what work is. I spent years working like a dog at all hours, when the sun was up I worked. Few of that class could do this, however, the truth is, I could do their job.
For those unhappy with the restirement system in the US, just look at what is happening north of you, in Canada where I live, and you will feel much better: This may come as shock to you, but in Canada pesently, unlike the US or the UK, there is no federal pension protection fund. Yes we have a great universal health care system, but no retirement protection!!!
So if a company goes bankrupt, its pensioners lose a big chunk of their pension if the pension plan was in deficit at the time of bankruptcy. This is exactly what is happening now with the ex-telecom giant Nortel Networks which went into bankruptcy protection in 2009. So at least in the US company pensions are federally protected which is a blessing.