posted August 06, 2006 01:16 AM              

Central to the campaign is an effort to persuade US voters that the existing Social Security system is 'in crisis' [1] (http://seattletimes.nwsource.com/html/nationworld/2002146127_socsec09.html). Meanwhile, Bush's allies at Fox News and USANext have been attacking AARP, which opposes privatization of the system [2] (http://www.SourceWatch.org/wiki.phtml?title=U.S._Social_Security_privatization#newsHounds6Jan05). AARP has been in the administration's sights since at least early 2004, when an organization with a misleadingly similar acronym, the Alliance for Retirement Prosperity or ARP, was launched by Republican stalwarts such as Jack Kemp and Dick Armey [3] (http://www.latimes.com/news/nationworld/nation/la-na-briefs13.1mar13,1,7042582,print.story?coll=la-headlines-nation).

During his January 16, 2005, interview with the Washington Post, President George W. Bush corrected the reporter's use of the term "privatization plan", insisting on the phrase "personal savings accounts." Privatization is no longer the term used by Republicans to describe the plan, due to its poor performance in polls and focus groups. [4] (http://www.washingtonpost.com/ac2/wp-dyn/A12570-2005Jan15?language=printer) Another euphemism was deployed by Karl Rove during a February 9, 2005, interview with Hannity & Colmes on Fox News. According to the News Hounds blog, Mr. Rove spoke of modernizing Social Security. [5] (http://www.newshounds.us/2005/02/10/propaganda_in_search_of_a_word.php)

Rove's favorite euphemism was also used in a memo sent to the Social Security Administration's regional and public relations directors in February 2004. It stated that "Modernization must include individually controlled, voluntary personal retirement accounts." Also in the memo were talking points on the "long-term challenges facing Social Security." Critics said the memo was evidence of the Bush administration instructing a government agency to promote a certain political agenda. [6] (http://prweek.com/news/news_story.cfm?ID=233243&site=3)

http://www.sourcewatch.org/index.php?title=U.S._Social_Security_privatization

posted August 06, 2006 01:44 AM              

Claim: President Eisenhower once noted that "a few Texas oil millionaires" wanted to "abolish social security."

Status: True.

quote:

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Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.--President Dwight Eisenhower

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Politically, Ike was a classic small-government Republican. He was of the opinion that the federal government had grown too large at the expense of local and state authority since the advent of FDR's New Deal in the 1930's, a situation which had been exacerbated by the national emergency that was World War II. Since the Depression and the war were over by the time he took office in 1953, President Eisenhower felt it was time to return to the "middle way" — pruning federal subsidies of industries such as agriculture and power companies, which he believed no longer needed government assistance. At the same time, he wanted to sustain and even increase funding for programs he thought had good track records, and Social Security was paramount among these.

posted August 06, 2006 01:00 PM              

President George Bush has repeatedly cited Chile as his model for Social Security privatization. While in Chile last November, he called it a "great example." And in an April 2001 visit to the country, Bush said: "I think some members of Congress could take some lessons from Chile, particularly when it comes to how to run our pension plans."

The architect of Chile's 1981 privatization was Harvard-trained Jose Pinera, who was Chile's Labor and Social Security Minister from 1978-1980, under the Pinochet military dictatorship (1973-1990). Pinera today is Co-chairman of the Cato Institute's Project on Social Security Choice, one of the ideological centers of the Bush assault.

George Shultz, the eminence grise of the Bush-Cheney Administration, visited Pinera back in 1981. In his capacity as advisor to the incoming Reagan Administration. Shultz asked Pinera to provide him with a one-page memo on Chile's pension privatization, which had barely been implemented, for Shultz to try to sell the idea to Reagan. Reagan didn't buy it, but George W. Bush has.

What Is the Chile model?

Up until 1981, Chile had a U.S.-style pay-as-you-go system. In 1981, workers already in the system were given a hard-sell "choice" of switching to a new, privatized system. All new entrants to the labor force after 1981 were required to enter the private system—with the exception of the military, who protected themselves by staying in the public system. Under the private system, workers pay 10% of their salaries into private investment accounts, run by financial institutions called Pension Fund Administrators (AFPs).

The Chilean privatization and related economic measures were implemented by a fascist police state. From 1973 to 1979, many unions were dissolved and collective bargaining was sharply reduced. Then in 1979, Labor Minister Pinera's "Plan Laboral" abolished the minimum wage, wiped out all collective bargaining, de facto eliminated the right to strike, prohibited trade union federations, reduced unionized workers to less than 10% of the work force, and allowed workers to be fired without cause. Dissidents were rounded up, jailed, tortured, or disappeared.

The driving force behind Chile's privatization of social security was the impending meltdown of its entire financial system, under the weight of a giant speculative bubble—a national bankruptcy which in fact occurred a year later, in late 1982. Chile's international creditors were able to refloat the country's banking system, based largely on the multi-billion dollar income stream appropriated through pension privatization, in order to keep looting it. Shultz and related financial hit-men are driving the Bush privatization frenzy today for the similar reasons, only on a much larger scale of impending bankruptcy.

After 24 years in operation, the Chilean system today is such a fiasco that almost all political forces in the country now agree that it has to be jettisoned, and some sort of an alternative devised. A few facts summarize the crisis:

Half of Chile's 6.1 million labor force is not even captured by the pension system: they are unemployed, in the underground economy, or are seasonal workers. Of the remaining half, only 1.2 million workers—a mere 20% of the labor force—are covered with a pension greater than the government minimum standard of about $110 per month.

The government subsidizes those who receive less than this minimum, paying out more than a quarter of its total budget in social security payments—nearly as much as it does on education and health combined. And government social security payments are rising, with no end in sight.

Anywhere from 25% to 33% of worker payments are skimmed off as "administrative fees" by the AFPs.

From 1997-2004, the AFP annual profit rate was a cool 50%. Even in 2002, a year of economic recession in Chile, the average AFP profit rate was 50.1%—with one of the largest AFPs achieving a 210% return!

There were 18 AFP's when the system began in 1981; now there are only 6, of which 5 are foreign-controlled. Out of $36 billion in Assets Under Management in the system, 95% are controlled by these foreign banking interests. These are: BBVA (Spain) with 32% of the total; Citibank (U.S.) 23%; Sun Life (Canada) 16%; Aetna (U.S.) 13%; and Banco Santander (Spain) 11%).

From 1982-2004, the annual return on individual accounts with the AFPs has averaged only 5.1%. If two co-workers retire in Chile today, both having the same salary and the same number of years paying into social security—one into the old pay-as-you-go system, and the other into the privatized AFP system—the co-worker in the privatized system today would receive less than half of the pension of the one who remained in the old public system.

The Chilean model is a failure. It means fascist economics, and fascist politics. It should not be repeated in the United States.

http://www.larouchepac.com/pages/otherartic_files/2005/050207_ss_chile.htm

posted August 06, 2006 02:34 PM              

The Bush and Pinochet regimes have more in common than the looting of Social Security. Just as Pinochet required eight years of brutal repression at home, and assassinations of political opponents, before he could steal the workers' pension funds, the Bush Administration could not have dared launch their current drive to implement the "Pinochet Model" without similar draconian efforts in advance. In the case of the Bush-Cheney Administration, the equivalent of the Pinochet coup was the 9/11 attack, which provided them with the "Reichstag fire" precedent to go for brutal repression at home, under the so-called Patriot Act, and an aggressive campaign of global assassinations, directed against "terrorists." In the case of Pinochet's Chile, the global assassination program went under the code name Operation Condor. Today, the Bush Administration is launching a similar program, under Defense Secretary Donald Rumsfeld's much-heralded "military reform" schema.

The resemblance is hardly coincidental. One of the Pinochet junta's first actions upon taking power after the September 1973 coup, was to impose extraordinary police-state powers, which it continued to renew every six months for several years afterwards. It claimed this was made necessary by the internal security situation in the country. As late as July 1977, according to a memo written by the CIA's deputy director of operations, Pinochet and Gen. Manuel Contreras, the chief of the Directorate of National Security (DINA), "have believed... that a serious internal threat has existed in Chile and that the methods used by DINA to eliminate that threat have been entirely justified." Those methods included torture, forced disappearances, illegal detentions, and murder, and were often targetted against leftist political opposition.

Similarly, after 9/11, the U.S. Department of Justice rounded up thousands of men, of Arab and South Asian origin, on the pretext of suspicions of terrorist activities, and held them in secret, sometimes for weeks or months, without pressing charges or even announcing their names or whereabouts. Attorney General John Ashcroft issued new guidelines allowing surveillance of political and religious organizations and individuals without evidence of wrongdoing. Then he turned around and demanded from Congress, codification of these and other police-state measures, which were passed in the form of the misnamed USA Patriot Act. Among other things, the Patriot Act expands the ability of law enforcement to conduct secret searches, gives wide authority for phone and Internet surveillance, and gives access to normally private records with minimal judicial oversight.

The passage of the intelligence reform bill in December 2004 furthered this process with the inclusion of a number of so-called "Patriot II" provisions. It further breaks down the wall that has historically separated domestic and foreign intelligence operations by combining them under one roof, and it adds a provision to the Foreign Intelligence Surveillance Act of 1978, the so-called "lone wolf" provision, which makes any non-American person suspected of engaging in terrorist activity, regardless of whether any connection exists to a foreign government or terrorist organization, subject to a FISA surveillance warrant. While the law specifies that "non-American persons" only can be targetted, the 1980s frameup, prosecution, and imprisonment of Lyndon LaRouche proves that FISA can be abused to target Americans, as well.

Likewise, Pinochet's DINA combined police and military intelligence functions under one head, Contreras, who reported directly to Pinochet. Contreras was one of the founders of Operation Condor, a cooperative arrangement also involving Argentina, Bolivia, Uruguay, Brazil, and Paraguay. An Aug. 11, 1976 CIA staff memo noted that security officials of Chile, Argentina, and Uruguay were "reportedly expanding their cooperative anti-subversive activities to include assassination of top-level terrorists in exile in Europe." It further noted that Operation Condor had already included the development of a centralized data collection capability and the direction of joint operations in the southern part of South America. At least as far as Chile was concerned, "terrorists" were, by definition, opponents of the Pinochet regime, such as Orlando Letelier, who had served as Chilean Ambassador to Washington and then as Foreign Minister in the government of Salvador Allende, overthrown by Pinochet in the September 1973 coup.

Eventually, Contreras, along with others, was implicated and convicted in the 1976 murder of Letelier. Pinochet was never charged, even though it is extremely unlikely that the Letelier assassination could have been carried out without his knowledge, if not his authorization.

For the Bush Administration, 9/11 was its equivalent of a coup. It could not have imposed the police-state measures embodied in the USA Patriot Act, nor launched the war in Iraq, without it. Its version of Operation Condor is being assembled, in the Pentagon, by Undersecretary of Defense Stephen Cambone, and his military deputy, Lt. Gen. William G. "Gerry" Boykin. As reported by the New York Times on Dec. 19, Cambone and Boykin are assembling a proposal by which the Defense Department would take over covert operations and human intelligence, areas traditionally the domain of the civilian CIA. "Right now, we're looking at providing Special Operations forces some of the flexibility the CIA has had for years," one Defense official told the Times.

Although not mentioned in the Times account, it is likely that one of the models for this new capability is the hunter-killer teams that Secretary of Defense Donald Rumsfeld has deployed into Iraq and Afghanistan, variously known as Grey Fox, Task Force 121, and other names. These teams, made up of CIA and Army personnel, have had the job of hunting down and assassinating alleged terrorists.

Only after eight years of police-state repression, after all potential political opposition was crushed, including the labor movement, did the Pinochet regime move forward with its theft of the public pension system. The Bush Administration, after having imposed nearly identical police-state measures, is now also moving forward to implement its theft of Social Security on behalf of the synarchist bankers. Unlike Chile, however, the political opposition to Bush's scheme is very much alive and well, and led by Lyndon LaRouche.

http://www.larouchepac.com/pages/writings_files/2004/041228_ss_08.htm