They're Just Too Dumb to Save

Saturday, April 30, 2005

They're Just Too Dumb to Save

Friday, on the CNBC television program hosted by Dennis Miller, uber-conservative author Dinesh D'Souza was asked about the president's "private accounts" plan for reforming Social Security. During his reply, D'Souza stated, "If people were smart enough to save, we wouldn't need a (Social Security) program."

D'Souza's statement reflects the view among many conservatives that people who don't have a hefty nest-egg tucked aside for retirement must be dummies. Somehow, it never occurs to free-marketeers that a lot of Americans -- some of whom are smart, some are not so smart -- don't earn the high salaries that allow for someone to accumulate mutual funds, I-bonds and other investments over the course of many years.

Putting it more simply, small paychecks = small savings. As this Democratic staff report from the U.S. Senate notes:
Yet, one-quarter of America's families with young children earn less than $25,000 a year.

A family with both parents working full-time at the minimum wage earns only $21,400 a year, so child care can total almost half of their annual income.
And if your employer doesn't pay the cost of health care coverage (which is almost always the case for minimum-wage or low-wage workers), this cuts deeper into one's paycheck.

But this isn't a world to which D'Souza can relate. In one of his books published several years ago ("The Virtue of Prosperity"), D'Souza begins a sentence thusly: "Many of us have more money than we ever thought we would ..." How nice for you.

For D'Souza, "smart" people, by definition, save enough money so that Social Security doesn't matter and isn't necessary.

Reviewing D'Souza's book, Kim Phillips-Fein summarizes the author's warped thinking:
D'Souza argues that (economic) inequality, far from being the scourge many say it is, is exactly what we want in a market economy. The people making hundreds of millions of dollars are doing it by inventing things we all want and need. In other words, forget about union-busting, the slow growth of the minimum wage, the proliferation of jobs in the low-wage service sector ... inequality exists because rewards are doled out strictly according to merit, and some people, presumably those in the "Overclass," are simply better, smarter ...

D'Souza's attitude toward the element of pure luck is uncharacteristically ambivalent. It's tough to argue that (high-tech) companies that have yet to earn a dime are nonetheless producing things of such value that their founders "deserve" their loot.

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