Blackstone's Peterson Launches Questionable Assault on Social Safety Net Programs
At a time when a citywide coalition under the aegis of Community Labor United is demanding an $11 million Community Fund from the giant private equity firm and commercial landlord The Blackstone Group, we find it passing strange that Blackstone co-founder and senior chairman Pete Peterson is using his non-profit foundation to flog the release of a new documentary called I.O.U.S.A. this week.
The documentary focuses on the huge debt that the U.S. has run up in recent years. However, like most ventures into politics by the fiscally conservative Peterson (a McCain supporter, not coincidentally), all talk of the whys and wherefores of the U.S. debt puts the lion's share of the blame on successful New Deal programs like the Social Security system. As opposed to, say, the huge debt run up by the Bush Administration through illegal and immoral military adventures in Iraq and Afghanistan.
However, what's always been most concerning about Peterson's decades-long crusade against the Social Security system is the fact that he is, first and foremost, an investment banker. And investment bankers are particularly keen to get rid of Social Security - because it represents a huge pool of public capital that they can't play with through private investments. That is to say, rich bankers like Peterson would get even more rich if they could force Americans to pay into privately managed retirement funds (that in turn get invested in stocks and bonds), instead of paying into a public social insurance system like Social Security. And we're all supposed to just forget that the only way to extract big profits out of a privatized social security system is to throw half the potential recipients off the rolls like they did in Chile - eliminating payments to those who most need it and defeating the purpose of the system in one fell swoop.
Now in the 80s and 90s, Peterson and his pals in groups like the Concord Coalition kept screaming that the sky was falling with the Social Security system and that it needed to be immediately privatized because in a few decades from that time it was likely that payouts would exceed income. What they never said, but what any casual observer of Social Security learns early on, is that Social Security payouts are indexed to its income from taxation; so that the system could never go flat broke - even if Americans didn't simply demand that the government fund the system in a time of crisis.
Fast forward to the present day, and we see Peterson claiming that Social Security is a key factor in the rising national debt, and needs to be privatized for that reason. Which is an unfortunate (and convenient) way of looking at government debt.
From a left perspective, it is the job of government to spend public money to serve the public interest. That's why we have a government to begin with. So government debt is not at all the same as debt run up by an individual or a business. Ideally government debt should equate to public investment. Such debt is generally floated in the form of public bond issues, which are bought up by rich investors looking to shelter money during fluctuations in the securities and commodities markets and generally considered the safest form of investment possible. The only way a government would fail to pay off such debt would be if the government collapsed.
Examples of what we might consider to be positive public investments would be building subways or hospitals or schools. But over the course of this decade, we've instead seen huge negative public investments into the fiscal sinkholes of unjust wars and huge giveaways in the form of tax breaks and various direct aid to corporations like The Blackstone Group. Some rightfully call that "socialism for the rich."
It's worth it for Open Media Boston viewers to keep all this in mind as the drama of community organizations demanding $11 million from Blackstone unfolds. Blackstone's Peterson makes bucket loads of cash at the public expense, then fights to make even more money by destroying social safety net programs - also at the public expense.
Given that, it seems perfectly fair for neighborhood activists to demand far larger reparations from Blackstone and many other corporations that have made a bundle off the backs of working families in Boston and beyond. Perhaps $11 million - barely the PR budget that Blackstone might spend to fend off a concerted public campaign against it - is shooting too low.
Therefore, while we support CLU's basic strategy with Blackstone, we think it's worth it for local activists to demand much more money from them - maybe a nice round figure like $100 million for Boston and $1 billion nationally - and think seriously about how to expand similar campaigns to other giant Boston-based companies. If successful, perhaps Peterson and his ilk will think twice about setting their sights on destroying vital and wildly popular programs like Social Security. And perhaps we'll begin building social movements that can challenge the primacy of corporate interests in government at all levels.
Of course, $11 million is no chump change, and if CLU can get it they will have certainly won an important victory for a number of poor Boston neighborhoods. So activists should consider this editorial food for thought. But corporations should consider it a warning. If people get angry enough, a great deal can change for the better very quickly in our society - and the big bads can expect to see all the taxes they ducked over the years forcibly and retroactively extracted from their coffers. We look forward to such change in the near future, and will always do our level best to make it a reality.
