PRESIDENT George Bush announced after his re-election in November 2004 that he had “earned political capital” and was determined to spend it. With a new mandate and majorities in both houses of Congress, he soon proposed several domestic reforms, in particular to social security, the public pensions programme of the United States. He proclaimed his desire to use these reforms to consolidate what he called the ownership society.

In the world’s anti-Bush zones it is fashionable to regard him as an imperialist redneck of limited intellectual capacities. But beyond that view (1), the idea of an ownership society is the core of a sophisticated neoconservative vision for radically reconfiguring US domestic politics that is markedly different from ordinary neoliberalism. It has important international ramifications.

The US built a three-tier pension system around the Social Security Act of 1935, the triumph of the welfare system established by President Franklin D Roosevelt after the great depression of the 1930s. It was a public pension programme, inspired by Bismarck’s 19th-century reforms in Germany, providing retirement income to those employed long enough to qualify. Social security (which represents more than a quarter of federal taxation) is a mutual system: what comes in annually from payroll tax contributions (currently 6.2% of wages each from employee and employer, with a cap on taxable income at $90,000) goes out immediately to pensioners. Over the years reforms have reduced the mutual element in the system as a whole, to the advantage of pension funds.

The replacement rate is low - 25%-30% of pre-retirement wages - with extra provision for widows and the disabled (2). But since the 1930s social security has significantly reduced poverty among the elderly, once a desperate problem: between 1959 and 1979 it halved. For two-thirds of the retired population, it now represents more than half their income.

Founded on principles of general solidarity and publicly shared risk, social security is the most important part of what remains of the US social protection system (3). As in Europe, it now faces problems of finance. With people living longer, the ratio of working contributors to retired beneficiaries is rapidly worsening. The postwar baby-boomer generations, born between 1945 and 1967, are beginning to retire while the working age population shrinks steadily. Some forecasts indicate that payouts will exceed contributions in 2018 and that bankruptcy could threaten by 2042.

Bush has manufactured a crisis around these projections (4) to promote changes in social security inspired by neoconservative ideas. Bush’s plan proposes that younger workers invest 4% of their payroll taxes, with an initial maximum of $1,000 annually, in private personal retirement accounts (5). There is no compulsion, but the fear that the current system will collapse and benefits are certain to be cut is a strong incentive.

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New government data indicate that the concentration of corporate wealth among the highest-income Americans grew significantly in 2003, as a trend that began in 1991 accelerated in the first year that President Bush and Congress cut taxes on capital.

In 2003 the top 1 percent of households owned 57.5 percent of corporate wealth, up from 53.4 percent the year before, according to a Congressional Budget Office analysis of the latest income tax data. The top group’s share of corporate wealth has grown by half since 1991, when it was 38.7 percent.

In 2003, incomes in the top 1 percent of households ranged from $237,000 to several billion dollars.

For every group below the top 1 percent, shares of corporate wealth have declined since 1991. These declines ranged from 12.7 percent for those on the 96th to 99th rungs on the income ladder to 57 percent for the poorest fifth of Americans, who made less than $16,300 and together owned 0.6 percent of corporate wealth in 2003, down from 1.4 percent in 1991.

The analysis did not measure wealth directly. It looked at taxes on capital gains, dividends, interest and rents. Income from securities owned by retirement plans and endowments was excluded, as were gains from noncorporate assets such as personal residences.

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The following is said to have been an actual question given on a University of Washington chemistry mid-term exam. The answer by one student was so “profound” that the professor shared it with colleagues, via the Internet, which is, of course, why we now have the pleasure of enjoying it as well. 

  Here is the “Bonus Question” on the exam:

  Is Hell exothermic (gives off heat) or endothermic (absorbs heat)?

  Most  of the students wrote proofs of their beliefs using Boyle’s Law (gas cools when it expands and heats when it is compressed) or some variant.

  One student, however, wrote the following:

    First, we need to know how the mass of Hell is changing in time.   So we need to know the rate at which souls are moving into Hell and the rate at which they are leaving. I think that we can safely assume that once a soul gets to Hell, it will not leave. Therefore, no souls are leaving. As for how many souls are entering Hell, let’s look at the different Religions that exist in the world today. Most of these religions state that if you are not a member of their religion, you will go to Hell. Since there are more than one of these religions and since people do not belong to more than one religion, we can project that all souls go to Hell. With birth and death rates as they are, we can expect the number of souls in Hell to increase exponentially.

   Now, we look at the rate of change of the volume in Hell because Boyle’s Law states that in order for the temperature and pressure in Hell to stay the same, the volume of Hell has to expand proportionately as souls are added.

This gives two possibilities:

  If Hell is expanding at a slower rate than the rate at which souls enter Hell, then the temperature and pressure in Hell will increase until all Hell breaks loose.

  If Hell is expanding at a rate faster than the increase of souls in Hell, then the temperature and pressure will drop until Hell freezes over.

So which is it?

  If we accept the postulate given to me by Teresa (a girlfriend of mine during my Freshman year) that, “it will be a cold day in Hell before I sleep with you”, and take into account the fact that I slept with her last night, then number 2 must be true, and thus I am sure that Hell is Exothermic and has already frozen over.

  The corollary of this theory is that since Hell has frozen over, it follows that it is not accepting any more souls and is therefore, extinct…leaving only Heaven thereby proving the existence of a divine being which explains why, last night, Teresa kept shouting “Oh my God.”

THIS STUDENT RECEIVED THE ONLY “A.”

 

 

The selfishness of each assures the prosperity of all.