By PAUL CRAIG ROBERTS

A country cannot be a superpower without a high tech economy, and America's high tech economy is eroding as I write.

The erosion began when US corporations outsourced manufacturing. Today many US companies are little more than a brand name selling goods made in Asia.
Corporate outsourcers and their apologists presented the loss of manufacturing capability as a positive development. Manufacturing, they said, was the "old economy," whose loss to Asia ensured Americans lower consumer prices and greater shareholder returns. The American future was in the "new economy" of high tech knowledge jobs.

This assertion became an article of faith. Few considered how a country could maintain a technological lead when it did not manufacture.

So far in the 21st century there is scant sign of the American "new economy." The promised knowledge-based jobs have not appeared. To the contrary, the Bureau of Labor Statistics reports a net loss of 221,000 jobs in six major engineering job classifications.

Today many computer, electrical and electronics engineers, who were well paid at the end of the 20th century, are unemployed and cannot find work. A country that doesn't manufacture doesn't need as many engineers, and much of the work that remains is being outsourced or filled with cheaper foreigners brought into the country on H-lb and L-1 work visas.

Confronted with inconvenient facts, outsourcing's apologists moved to the next level of fantasy. Many technical and engineering jobs, they said, have become "commodity jobs," routine work that can be performed cheaper offshore. America will stay in the lead, they promised, because it will keep the research and development work and be responsible for design and innovation.
Alas, now it is design and innovation that are being outsourced. Business Week reports ("Outsourcing Innovation," March 21) that the pledge of First World corporations to keep research and development in-house "is now passé."

Corporations such as Dell, Motorola, and Philips, which are regarded as manufacturers based in proprietary design and core intellectual property originating in R&D departments, now put their brand names on complete products that are designed, engineered, and manufactured in Asia by "original-design manufacturers" (ODM).

Business Week reports that practically overnight large percentages of cell phones, notebook PCs, digital cameras, MP3 players, and personal digital assistants are produced by original-design manufacturers. Business Week quotes an executive of a Taiwanese ODM: "Customers used to participate in design two or three years back. But starting last year, many just take our product."

Another offshore ODM executive says: "What has changed is that more customers need us to design the whole product. It's now difficult to get good ideas from our customers. We have to innovate ourselves." Another says: "We know this kind of product category a lot better than our customers do. We have the capability to integrate all the latest technologies." The customers are America's premier high tech names.

The design and engineering teams of Asian ODMs are expanding rapidly, while those of major US corporations are shrinking. Business Week reports that R&D budgets at such technology companies as Hewlett Packard, Cisco, Motorola, Lucent Technologies, Ericsson, and Nokia are being scaled back.

Outsourcing is rapidly converting US corporations into a brand name with a sales force selling foreign designed, engineered, and manufactured goods. Whether or not they realize it, US corporations have written off the US consumer market. People who do not participate in the innovation, design, engineering and manufacture of the products that they consume lack the incomes to support the sales infrastructure of the job diverse "old economy."

"Free market" economists and US politicians are blind to the rapid transformation of America into a third world economy, but college bound American students and heads of engineering schools are acutely aware of declining career opportunities and enrollments. While "free trade" economists and corporate publicists prattle on about America's glorious future, heads of prestigious engineering schools ponder the future of engineering education in America.

Once US firms complete their loss of proprietary architecture, how much intrinsic value resides in a brand name? What is to keep the all-powerful ODMs from undercutting the American brand names?

The outsourcing of manufacturing, design and innovation has dire consequences for US higher education. The advantages of a college degree are erased when the only source of employment is domestic nontradable services.

According to the Los Angeles Times (March 11), the percentage of college graduates among the long-term chronically unemployed has risen sharply in the 21st century. The US Department of Labor reported in March that 373,000 discouraged college graduates dropped out of the labor force in February--a far higher number than the number of new jobs created.

The disappearing US economy can also be seen in the exploding trade deficit. As more employment is shifted offshore, goods and services formerly produced domestically become imports. Nothink economists and Bush administration officials claim that America's increasing dependence on imported goods and services is evidence of the strength of the US economy and its role as engine of global growth.
This claim ignores that the US is paying for its outsourced goods and services by transferring its wealth and future income streams to foreigners. Foreigners have acquired $3.6 trillion of US assets since 1990 as a result of US trade deficits.

Foreigners have a surfeit of dollar assets. For the past three years their increasing unwillingness to acquire more dollars has resulted in a marked decline in the dollar's value in relation to gold and tradable currencies.

Recently the Japanese, Chinese, and Koreans have expressed their concerns. According to Bloomberg (March 10), Japan's unrealized losses on its dollar reserve holdings have reached $109.6 billion.

The Asia Times reported (March 12) that Asian central banks have been reducing their dollar holdings in favor of regional currencies for the past three years. A study by the Bank of International Settlements concluded that the ratio of dollar reserves held in Asia declined from 81% in the third quarter of 2001 to 67% in September 2004. India reduced its dollar holdings from 68% of total reserves to 43%. China reduced its dollar holdings from 83% to 68%.

The US dollar will not be able to maintain its role as world reserve currency when it is being abandoned by that area of the world that is rapidly becoming the manufacturing, engineering and innovation powerhouse.

Misled by propagandistic "free trade" claims, Americans will be at a loss to understand the increasing career frustrations of the college educated. Falling pay and rising prices of foreign made goods will squeeze US living standards as the declining dollar heralds America's descent into a has-been economy.

Meanwhile the Grand Old Party has passed a bankruptcy "reform" that is certain to turn unemployed Americans living on debt and beset with unpayable medical bills into the indentured servants of credit card companies. The steely-faced Bush administration is making certain that Americans will experience to the full their country's fall.
What better sign of how far the United States has fallen economically than the near-bankruptcy of one of its flagship corporations, General Motors. And what is Wall Street’s advice to General Motors to turn things around? Innovate? Invest? No. General Motors is told to cut pensions and health benefits for retirees and employees. I don’t know what’s worse, the blatant class warfare from above or the total lack of imagination. Most of whatever profits General Motors had during the last decade came from its credit division, GMAC, see this from Joseph Kay:

GM announces sharply lower profit figures

Decline of auto giant highlights crisis of US manufacturing

By Joseph Kay
18 March 2005

General Motors announced Wednesday that it faces a huge loss for the first quarter of the year and much lower profits than previously projected for all of 2005. The news from GM, the world’s largest auto manufacturer by sales, provoked a sell-off of the company’s shares on Wall Street.

Chief Executive Officer Rick Wagoner and Chief Financial Officer John Devine announced that the company expects to post a loss of about $846 million ($1.50 per share) for the first three months of 2005. This would be GM’s largest quarterly loss since 1992, when it was on the verge of bankruptcy. The company had previously announced that it would break even for the quarter. GM also revised downward its expected profits for 2005, from $4-$5 per share to $1-$2 per share, excluding one-time expenses.

Following the announcement, the price of GM stock plummeted, ending the trading day down by 14 percent. The sell-off eliminated some $12.7 billion in shareholder equity. It was the steepest decline of the company’s stock since the stock market crash of 1987. During trading on Thursday, share prices fell below $28, down from over $80 five years ago.

Indicating the lack of confidence of investors in the future of the company, GM’s bond rating was downgraded by all major ratings firms. Its bonds are now hovering just above junk bond status. A junk bond rating means investors are skeptical that the company will pay off its debts. If the rating is downgraded any further, GM will face sharply higher interest rates on the bond market, further eroding its bottom line.

A downgrading to junk status could trigger a sell-off with serious consequences for the broader bond market. One Wall Street Journal article on Thursday began by noting that the announcement by GM has prompted “investors [to reassess] the risk of lending money to US companies.”

…At the same time it announced its new profit figures, GM made it clear that it plans to place the burden of the company’s problems on the backs of its workers. All 38,000 North American salaried employees will be denied merit pay raises this year, and the company plans to reduce its contribution to retirement accounts for all workers by 60 percent.

To cut production, GM has scheduled for this summer the permanent closure of three assembly plants. They are located in Baltimore, Maryland; Lansing, Michigan; and Linden, New Jersey. The closing of the Lansing plant alone will result in 3,000 layoffs. Other plants are scheduled for temporary shutdowns, including the truck assembly plant in Janesville, Wisconsin.

These, however, are merely preliminary measures. Wagoner said that while the company “made a lot of progress on reducing structural costs, what we have saved on the operating side has been filled in by higher legacy costs...We need to be more creative and more effective in addressing legacy costs. They are kind of swamping a competitive operational performance.”

Put more simply, pension and health benefits that GM workers were able to win over previous decades are to be sacrificed to improve the company’s bottom line. GM’s health care spending alone is expected to rise to $5.6 billion in 2005, up from $5.2 billion last year. Over 1.1 million Americans—including current workers, retirees and their families—are presently covered by GM health care obligations, making the company the largest private health care provider in the country.

In addition to benefits such as health care and pensions, GM workers have won the right to continue to receive compensation—at least 75 percent of their pay—after being laid off. From the perspective of management and Wall Street, all of these “legacy costs” are intolerable constraints on the company’s ability to radically restructure itself so as to once again become profitable.

Wall Street analysts are placing pressure on the company to take ruthless measures. Stephen Girsky, chief auto analyst at Morgan Stanley, argued, “The company’s market share doesn’t support its size. They have too many plants, too many workers, too many models, too many dealers and their employee benefits are too high.”

…A crisis of American manufacturing

The deep problems that have again come to the surface at General Motors are an expression of a protracted decline of profitability in American manufacturing. Once the paragon of the US economy, the auto industry has undergone a profound decay over the past several decades.

GM once claimed, “What’s good for GM is good for America.” It can be said today that what ails General Motors is what ails American industry. GM is now a symbol of the decline of American economic dominance.

The problem of profitability at GM is not new. Over the past two decades, the company has seen its US market share steadily erode, from a high of over 50 percent during the post-war period. As its manufacturing has declined, GM has increasingly relied on its financing arm, General Motors Acceptance Corp (GMAC), to remain profitable. In addition to auto financing, GMAC finances home mortgages and engages in other activities unrelated to the auto industry. In recent years, GM would have been consistently in the red if it were not for GMAC.

GM’s reliance on its financial subsidiary is indicative of the increasingly subordinate role played by manufacturing in the American economy. As profits from production have declined, the American ruling elite has turned to various forms of financial speculation that do not actually produce anything of value. At the same time, it has sought ever more systematically to shift production from the US to impoverished regions of the world where labor costs are far lower. This process is a concentrated expression of the increasing parasitism of American capitalism.

The crisis of General Motors reveals the underlying weakness of the American economy, which, in turn, provides an insight into the driving forces behind the explosive growth of American militarism. Internally corroded, American capitalism turns more and more to military violence to maintain its position of dominance and impose American-style “free market” relations in every part of the world.
I was amazed to see that more than a million people in the U.S. are covered by General Motors’ employee and retiree health insurance. Now they will be asked to pay more. Later, perhaps, it will be taken away. This shows the absurdity of having corporations provide safety nets and social spending. A corporation is designed by law and charter to be a psychopath, even to its own employees. Why would we want our health care and retirement income to be in the hands of psychopaths? A legitimate government is actually designed by law to have a conscience with regard to its own people (it is still, in a nation-state system, designed to be psychopathic to the rest of the world). If the government spent money on social insurance instead of invading other countries, than corporations could compete on efficiency without destroying the social fabric. We don’t, in the United States, have a legitimate government, though. Our government is completely beholden to psychopathic corporations, to the military death machine, and to a destructive system of exploitation of humanity and of the earth.

One thing you notice perusing writings on the economy is that the idea of “economic growth” is rarely questioned. Stan Cox pointed that out in a Counterpunch article last week:

While there are not enough members of Congress willing to oppose the building of roads in wilderness areas or the gutting of the Clean Air Act, many do take those positions. Such issues are OK to discuss in polite society. On the other hand, when did you last hear a national politician say, "This economy's growing too fast, and if elected, I'll work to cut growth!"?

They never say that, because they would be admitting that capitalism is unsustainable. There is no such thing as capitalism without growth. Capitalists -- a class of folks whose income is "unearned" (a term devised and used, with uncharacteristic clarity, by the IRS) -- have a well-understood role in society: to take a pile of money and turn it into a bigger pile of money.

But a bigger pile of money, once achieved, is not an end but another beginning. To the capitalist, that pile is useless unless it can be turned into an even bigger pile. As a result, more resources are used and wastes expelled this year than last, and even more next year.

Now, if you're a politician or, say, a liberal pundit, you can't very well tell working people, "I'm afraid that our capitalist class is going to be needing an increasingly bigger share of our national income for a while -- well, um, actually forever -- and it's all going to have to come out of your paychecks."

Instead, you talk about economic growth and its seemingly miraculous ability to keep boosting the capitalist's return on investment while not completely wiping out the workers who generated it. No problem: Money's imaginary, so bigger piles of it are always possible, and there is no biggest pile.

But, of course, we do have a problem. We have no infinite piles of the stuff (even the renewable stuff) that's needed to turn money into more money. There's a rule that no species can increase its resource exploitation infinitely, and Homo sapiens has not been granted a waiver. Fossil fuels, soil, salmon, and healthy ecosystems are real, and the rules that apply to money -- which is no more real than 'Monopoly' money -- don't apply on planet Earth.

… Those who want to square the circle, to have infinite economic growth on a finite planet, generally invoke greater efficiency. Technology is supposed to let businesses generate more monetary wealth while using and abusing less of the material world.

Now, nobody -- no CEO, no environmentalist, not even the Antichrist -- is going to argue against efficiency. But capitalism has a way of turning good things inside out.

If you're a business owner, and you find you can produce the same number of lawn chairs or helicopters while spending less on energy, materials, labor, or waste disposal, that's efficiency, and that means money in the bank for you. But it's your job as a good capitalist to get that money out of the bank, ASAP, and invest it in the real world, where you can turn more stuff into more money. (No matter if demand is down -- buy advertising!)

In a growth-dependent economic order, efficiency simply provides more opportunities for production and consumption. Relying on efficiency to make growth less destructive is like trying to run up a "Down" escalator that never stops accelerating.

Ecological economics, a heretical branch of the discipline, has demonstrated conclusively that if we're to live within our material means, planet-wide, we must (1) limit our species' rate of reproduction, (2) hold our "throughput" of resources and wastes down to a sustainable level, and (3) set upper and lower limits on monetary wealth and income. These policies make up a package; following only one or two of them won't do the job.

While most ecological economists are not explicitly anti-capitalist -- that is, they do not advocate taking society's most important investment decisions out of the hands of an unelected capitalist class and putting them into democratic institutions -- it is difficult to see how capitalists or capitalism could flourish in the kind of world they envision.

And there are ways of making investment decisions democratic. For example, in his book After Capitalism, David Schweikart outlines a vision of the future that we all would find familiar, with private property, buying, selling, profits, and entrepreneurs - but without capitalists! Letting all of society, not just a tiny sliver, decide how to invest would not by itself stop the cancerous growth that's killing the ecosphere. But it's the necessary step.
The problem with Utopian economic and political schemes in the fallen world we live in is that they can easily be subverted if people do not wake up to some basic realities. If it is true that four percent of the population are psychopaths completely lacking a conscience, and if a full half of the people are irredeemably self-serving and mechanical, then no political or economic reform can truly take place without clear, objective awareness on the part of those who do have a conscience and a potential soul of the reality of a world where those who can lie without shame rise to the top of power hierarchies.

A couple of predictions:

As time passes and even the president's supporters are starting to see through this Social Security "crisis," I see a compromise scenerio emerging.

Rather than taking the 4% from Social Security, I predict the compromise will be to allow individuals to add a percentage to their SS deductions and have that money set aside in private accounts. Joe: it's the "tax-free savings accounts" that this smelled like to you all along.

But, don't take your eye off the ball fans. I also predict that the $4 billion-plus startup cost would still be borne by the Social Security system.

I hate to see this topic go for long periods with no comment. That's how this administration gets things done. From judicial appointments to personal (but not business) bankruptcy to the war in Iraq - it starts out with a premise that's obviously bogus to most thinking Americans, backs off for a while and then reintroduces it with minor distortions while most people have moved on and are looking the other way.

Today's news has President Bush touting his personal Social Security accounts, saying, "Offering young workers a 1930's-era retirement system is like trying to persuade them that vinyl LPs are better than iPods."

Bad analogy! Aside from the IPod actually being comparable to the Victrola not the record, IPod sound is obviously far superior to vinyl. Today's retirement system doesn't compare with the pre-1980s era. When Social Security started, you got all you'd paid in back in some incredibly short period after you retired. And while not in the depression era 1930s - for some five decades after, most businesses offered fully funded pensions - far better than today's 401K plans where they usually match a small portion of what you put in.

Instead of clever phrases, Bush should be held to the task of explaining how putting less money into the fund paying out benefits can be considered even part of a solution to any problems facing the program.

You are so right, Steve... so many issues are being brought to the forefront every day, that we (the American public) tend to forget about issues that have not been fully addressed.

There's an op-ed piece in today's NYTimes, that looks at the idea of "Personal Accounts" in a way that many of us never considered:
<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>April 22, 2005
OP-ED CONTRIBUTOR
Private Accounts, Public Accountability
By MARTIN MAYER

So few specifics of President Bush's Social Security proposal have been made public that it is difficult to say which will make trouble. But one person who should be seriously concerned about the details is Alan Greenspan, chairman of the Federal Reserve.

According to many reports, the Bush plan would require retirees who have chosen "personal accounts" to use most or all of the money in those accounts to purchase annuities to supplement the payments that will remain after the government recalculates their Social Security benefits. How large an annuity that retirees can buy - and thus what standard of living they may expect - will be determined largely by interest rates set by the Federal Reserve. That's a lot of power to concentrate in one conference room on Constitution Avenue.

A simple annuity provides its purchaser with a certain amount of money every month for the rest of his or her life. The Bush annuities would have to be more complicated and expensive, because their payouts would have to rise with both the cost of living and the poverty threshold.

Apart from the inflation question, however, there is an even more complex issue: the percentage of a retiree's personal account that would go toward buying the annuity. That percentage could fluctuate substantially over the year, so someone who retires in April could wind up with significantly higher or lower income from someone with the same portfolio who did not retire until October.

This difference would, in part, be a matter of routine fluctuations in the value of the stocks and bonds in the personal account - it is not unusual for the market to rise or fall 10 percent over six months. The value of any personal account will depend on the prices in the market on the day the annuity is purchased. If someone retires when the market is up, the personal account will be larger and the cost of the annuity will take a lesser share of it; if he retires when the market is down, the annuity will absorb a larger part of his account.

Even more significant, because each annuity locks in today's interest rate for what would be an average of 15 or more years, any differences in interest rates between April and October would considerably influence the price of the annuity that must be purchased. The higher the interest rate, the cheaper the price of an annuity that yields a certain income; the lower the interest rate, the more expensive the same annuity will have to be.

The Federal Open Market Committee meets eight times a year to set short-term interest rates. As the baby boomers age, several hundred thousand more Americans will retire between these meetings, just about all of them required under the president's plan to purchase annuities to supplement their reduced Social Security payments. (If there were no legal requirement to purchase annuities, many economists, analysts and just plain wastrels would maximize their return by spending their personal accounts as soon as they have access to the money - knowing that when it ran out, they would receive money from a government embarrassed by the sight of so many old folks shuffling into soup kitchens. The minimum annuity contemplated in the Bush program is one that pays enough to bring the retiree's reduced Social Security income to the poverty line.)

Voting on interest rates in a world of private accounts, then, the Federal Reserve governors and bank presidents will know - and if they forget, the AARP will remind them - that they are voting to alter the future income of many Americans close to retirement. As Mr. Greenspan must recognize, this is a burden the Fed does not need.

Most people concerned about the security of their pensions in a world of personal accounts worry that the money would be invested in an Enron. As advertised, diversification would take care of most of that problem. But you can't diversify time. If President Bush's proposal had been in effect for the last 30 years, an American retiring in the spring of 2000 - having earned an average income and built an average personal account in index funds - would retain a personal account at least a third larger than the personal account of his younger brother, who had the same income and the same investments but retired in the spring of 2003.

And this difference would have resulted not from anybody's working harder or investing more intelligently or more fortunately. It would stem simply from the accident of having been born a couple of years later.

Over the years, central banks have learned to cope with irrational and arbitrary government policies. This one may be a step too far. Alan Greenspan should weigh in on the debate.


Martin Mayer, the author of "The Fed," is a guest scholar at the Brookings Institution.
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"This difference would, in part, be a matter of routine fluctuations in the value of the stocks and bonds in the personal account - it is not unusual for the market to rise or fall 10 percent over six months."

If anyone has noticed, the market lately has not been healthy for those with weak stomachs. It dropped 5% or so in just a few days of trading recently, only to rebound 2% yesterday, and fall moderately again today. I can just see a bunch of novices trying not to puke their guts up when they watch their "personal" accounts ebbing and flowing at the whim of the capitalist elite, not to mention trying to "time" the market to purchase their annuities. BUSH IS SITTING ON A BAD SET OF IDEAS: HOPEFULLY, NONE OF THEM WILL HATCH.

Good point, Mikey, which brings up another flaw with this plan: By the time most of us retire, returns on the stock market aren't likely to be as good as they've been historically coz of the changing global economy-----at least not unless we're all ready to invest in Chinese companies.

Not to worry, however. I sense that this movement toward private accounts is losing what little momentum it had & is going nowhere. Bush's promise that the numbers will eventually add up are falling on the deaf ears of a populace that knows all too well how fuzzy his math was on matters of the ecomony & the cost of the war in Iraq, & in the words of the Who, they "won't get fooled again." Bush making speeches in front of prescreened audiences won't change their minds.

From today's NYTimes
<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>May 9, 2005
The Final Insult
By PAUL KRUGMAN
Hell hath no fury like a scammer foiled. The card shark caught marking the deck, the auto dealer caught resetting a used car's odometer, is rarely contrite. On the contrary, they're usually angry, and they lash out at their intended marks, crying hypocrisy.

And so it is with those who would privatize Social Security. They didn't get away with scare tactics, or claims to offer something for nothing. Now they're accusing their opponents of coddling the rich and not caring about the poor.

Well, why not? It's no more outrageous than other arguments they've tried. Remember the claim that Social Security is bad for black people?

Before I take on this final insult to our intelligence, let me deal with a fundamental misconception: the idea that President Bush's plan would somehow protect future Social Security benefits.

If the plan really would do that, it would be worth discussing. It's possible - not certain, but possible - that 40 or 50 years from now Social Security won't have enough money coming in to pay full benefits. (If the economy grows as fast over the next 50 years as it did over the past half-century, Social Security will do just fine.) So there's a case for making small sacrifices now to avoid bigger sacrifices later.

But Mr. Bush isn't calling for small sacrifices now. Instead, he's calling for zero sacrifice now, but big benefit cuts decades from now - which is exactly what he says will happen if we do nothing. Let me repeat that: to avert the danger of future cuts in benefits, Mr. Bush wants us to commit now to, um, future cuts in benefits.

This accomplishes nothing, except, possibly, to ensure that benefit cuts take place even if they aren't necessary.

Now, about the image of Mr. Bush as friend to the poor: keep your eye on the changing definitions of "middle income" and "wealthy."

In last fall's debates, Mr. Bush asserted that "most of the tax cuts went to low- and middle-income Americans." Since most of the cuts went to the top 10 percent of the population and more than a third went to people making more than $200,000 a year, Mr. Bush's definition of middle income apparently reaches pretty high.

But defenders of Mr. Bush's Social Security plan now portray benefit cuts for anyone making more than $20,000 a year, cuts that will have their biggest percentage impact on the retirement income of people making about $60,000 a year, as cuts for the wealthy.

These are people who denounced you as a class warrior if you wanted to tax Paris Hilton's inheritance. Now they say that they're brave populists, because they want to cut the income of retired office managers.

Let's consider the Bush tax cuts and the Bush benefit cuts as a package. Who gains? Who loses?

Suppose you're a full-time Wal-Mart employee, earning $17,000 a year. You probably didn't get any tax cut. But Mr. Bush says, generously, that he won't cut your Social Security benefits.

Suppose you're earning $60,000 a year. On average, Mr. Bush cut taxes for workers like you by about $1,000 per year. But by 2045 the Bush Social Security plan would cut benefits for workers like you by about $6,500 per year. Not a very good deal.

Suppose, finally, that you're making $1 million a year. You received a tax cut worth about $50,000 per year. By 2045 the Bush plan would reduce benefits for people like you by about $9,400 per year. We have a winner!

I'm not being unfair. In fact, I've weighted the scales heavily in Mr. Bush's favor, because the tax cuts will cost much more than the benefit cuts would save. Repealing Mr. Bush's tax cuts would yield enough revenue to call off his proposed benefit cuts, and still leave $8 trillion in change.

The point is that the privatizers consider four years of policies that relentlessly favored the wealthy a fait accompli, not subject to reconsideration. Now that tax cuts have busted the budget, they want us to accept large cuts in Social Security benefits as inevitable. But they demand that we praise Mr. Bush's sense of social justice, because he proposes bigger benefit cuts for the middle class than for the poor.

Sorry, but no. Mr. Bush likes to play dress-up, but his Robin Hood costume just doesn't fit.

E-mail: krugman@nytimes.com
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