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2003-12-22 -- The Ownership Society

In the Ownership Society, all pretense of the market economy being a
win-win situation, where high profits bring more jobs, are thrown to
the winds.

Bush's proposed reforms normalize the new economy where workers are
shifted from job to job with much less opportunity to organize for
pay, benefits, or safety. The are described as " ... a bundle of
proposals that treat workers as self-reliant pioneers who rise through
several employers and careers. To thrive, these pioneers need survival
tools. They need to own their own capital reserves, their own
retraining programs, their own pensions and their own health
insurance. ... Administration officials are talking about giving
unemployed workers personal re-employment accounts, which they could
spend on training, child care, a car, a move to a place with more
jobs, or whatever else they think would benefit them."



New York Times, December 20, 2003

The Ownership Society
By DAVID BROOKS

Not long ago, a man who runs a construction company came to the White
House to meet with a senior Bush administration official. He talked
economic policy, then was asked how his business was going.

He said things were going well. Orders were up. He'd revamped his I.T.
system, and he'd re-engineered his production process so he'd been
able to reduce his work force to 7,200 from 9,800.

You can imagine the reaction as he dribbled out this final bit of good
news. For here in a nutshell is the administration's problem. The
economy is doing well, but because of enormous productivity gains, it
is not yet producing enough jobs to sharply reduce unemployment and
ensure President Bush's re-election.

This situation means that the name Arthur Okun is once again
reverberating off White House walls. Okun, an economist, is the author
of Okun's Law, which predicts how fast the economy has to grow to
reduce unemployment. Back in the early 1990's, economists expected
that the economy had to grow faster than 2.6 percent to create jobs.
Today, because of productivity gains, growth rates have to be much
higher.

"This is going to change the entire economy," one senior Bush official
observed. "How do we deal with it?"

There are essentially three answers to that question. The first is the
pure free-market answer, which says the market will take care of
itself. Productivity gains will eventually lead to job creation, and
workers will learn to adapt. The second is the unions' answer, which
is that the job picture is stagnant because of unfair global
competition. Rewrite the trade rules, and jobs will be more secure.

The third response has been championed most ardently by centrist
organizations like the Democratic Leadership Council: embrace the more
productive and fluid economy, but make sure government aggressively
moves to give workers the tools they need to cope.

Over the past three years, the Democratic Party has shifted behind the
unions' approach. When Dick Gephardt and Howard Dean are asked about
manufacturing job losses, they talk first about unfair trade. The Bush
administration, meanwhile, is embracing its own version of the
centrist Democratic approach, occupying the ground abandoned by the
leftward-veering Democrats.

In his State of the Union address, the president will announce
measures to foster job creation. In the meantime, he is talking about
what he calls the Ownership Society.

This is a bundle of proposals that treat workers as self-reliant
pioneers who rise through several employers and careers. To thrive,
these pioneers need survival tools. They need to own their own capital
reserves, their own retraining programs, their own pensions and their
own health insurance.

Administration officials are talking about giving unemployed workers
personal re-employment accounts, which they could spend on training,
child care, a car, a move to a place with more jobs, or whatever else
they think would benefit them.

President Bush has a proposal to combine and simplify the confusing
morass of government savings programs and give individuals greater
control over how they want to spend their tax-sheltered savings.
Administration officials hope, in a second term, to let individuals
control part of their Social Security pensions and perhaps even their
medical savings accounts.

The Ownership Society idea allows Bush to be centrist and conservative
at the same time. It is centrist because it means actively using
government to solve problems. In 2000, Bush declared: "I do not
believe government is the enemy. But I do not believe government is
always the answer. At its best, it can help people find the tools they
need to build for themselves. At its best, it gives options, not
orders." The Ownership Society platform is designed to update that
message for 2004.

But the platform is culturally conservative. Talking with staff, Bush
emphasizes that he wants to use these policies to move from an
"anything-goes culture" to a "responsibility culture." By giving
individuals control of their own retraining, their own savings and
their own homes, he hopes to inculcate self-reliance, industriousness
and responsibility.

With events like the State of the Union address, an incumbent
president has the power to change the subject and reshape the domestic
debate. The Bushies haven't done it yet, but they are about to.