Thursday, November 25, 2004

NPR's Talk of the Nation on Social Security, equity ownership, and home ownership

NPR's Talk of the Nation had a very interesting segment on "ownership". It was advertised as being focused on President Bush's supposed plan to create 100% home ownership (it won't happen) in ten years. But it really is part of a larger move towards more ownership of equity, real estate and other assets.

Frank Luntz a Republican Pollster, Stephen Moore of the Cato Institute, and James Surowiecki (of the New Yorker and author of The Wisdom of Crowds) are guests.

About a third of the way into the show, the talk turns towards reforming social security.

Given his book on crowds and by extension markets, it is somewhat surprising that Surowiecki is not in favor of the major privatization of social security. Why? On both efficiency reasons (more accounts would lead to more transaction costs). Moreover, he fears that many need the safety net. Both valid points.

The debate on whether the current social security system redistributes wealth from the rich to the poor or from the poor to the rich, is particularly interesting. (FTR: if it is poor to rich, the reason is that poor people tend to have started work earlier and die sooner)

A very interesting and informative discussion! Highly recommended. Even if you do not agree with either side completely, hearing all sides is important.

While I tend to disagree in part with what Surowiecki with his view on this issue (although I must stress not completely since privatization in and by itself is not a cure-all), his book is the Wisdom of Crowds. It is excellent!

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